The Senate proposal to create a subsidy program for cottonseed could carry a pricetag of $420 million or more, according to an analysis by economist Carl Zulauf of Ohio State University. Zulauf did not calculate the figure but estimated 14.08 million acres might be eligible, with payments of $30 an acre, based on USDA payment formulas.
In a novel step, cotton growers would be eligible for two different crop-subsidy programs under a provision in the USDA-FDA funding bill approved by the Senate Appropriations Committee. The provision designates cottonseed, harvested from the boll along with cotton fiber, as one of the "other oilseeds" that can collect Price Loss Coverage subsidies while USDA runs a separate, insurance-like subsidy program for cotton fiber.
The umbrella group National Cotton Council said it will seek short-term aid to cotton growers from the USDA now that an industry request for $1.2 billion in cottonseed subsidies has been rebuffed by Congress. The Cotton Council said Democratic Sens. Pat Leahy of Vermont and Debbie Stabenow of Michigan are to blame for cottonseed assistance being left out of the bill to fund the government for the rest of this fiscal year.
With a worldwide glut pulling down cotton prices to their lowest level in eight years, Agriculture Secretary Tom Vilsack announced $300 million in one-time assistance to growers, based on ginning costs. The cost-share program is far smaller than the $1-billion-a-year cottonseed subsidy that the industry wanted and that Vilsack said was beyond his power to create.
USDA will begin fleshing out a cotton-ginning cost-share program as a response to the third year of low cotton prices and financial stress on growers, said Agriculture Secretary Tom Vilsack.
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.
Cotton growers face the third year of low commodity prices, high production costs and financial hardship, says an economic outlook presented at the industry's annual meeting.
Cost savings under the 2014 farm law will be more than twice as large as originally forecast, around $36 billion over 10 years, thanks to markedly lower projected outlays on food stamps and crop insurance, says the House Agriculture Committee.