The USDA is prevented by statute from creating a subsidy program, potentially costing $1 billion a year, for cottonseed, Agriculture Secretary Tom Vilsack said in an essay in Farm Journal. Congress, he says, needs to change the law. “Knowing that our tools to provide assistance have been severely limited, I have asked Congress to examine the appropriations language to see if they could grant USDA flexibility through legislative action,” wrote Vilsack.
It was the second time in three weeks that Vilsack has returned the question to Congress. House Agriculture chairman Michael Conaway of Texas, the No. 1 cotton state, insisted earlier this month that the USDA has the discretion to act on its own.
Faced with a global cotton glut and the lowest market price since 2009, the cotton industry made a novel proposal at the end of 2015. Backed by roughly 120 representative and senators, it asked the USDA to designate cottonseed as an “other oilseed” eligible for the same subsidies given to grain and soybean growers. Cotton lint, the longtime member of the farm program, would remain eligible for subsidies. The 2014 farm law remodeled the cotton program so the fiber is covered by a revenue insurance policy and a so-called marketing loan that guarantees a minimum price. Participation in the new program, called STAX, has been paltry — about one-fifth of cotton plantings last year.
In the op-ed, Vilsack said the 2014 farm law “expressly removed eligibility of cotton for such payments” because Congress severed cotton’s ties with the traditional farm program when it created STAX.
Traditionally, cottonseed is a minor source of revenue for growers compared to the more-valuable cotton fiber. Cottoneed is used in livestock rations and in food and industrial products.