USDA ‘ginning’ up to help cotton farmers with $300 million marketing program

The U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) will provide an estimated $300 million in cost-share assistance payments to cotton farmers in order to expand and maintain the domestic marketing of cotton.

“Today’s announcement shows USDA continues to stand with America’s cotton producers and our rural communities,” USDA chief Tom Vilsack said of the agency’s new “Cotton Ginning Cost Share” program. “(This program) will offer meaningful, timely and targeted assistance to cotton growers to help with their anticipated ginning costs and to facilitate marketing. (It) will provide, on average, approximately 60% more assistance per farm and per producer than the 2014 program that provided cotton transition assistance.”

Through the Cotton Ginning Cost-Share program, eligible producers can receive a one-time cost share payment, which is based on a producer’s 2015 cotton acres reported to FSA, multiplied by 40% of the average ginning cost for each production region. With the pressing need to provide assistance ahead of the 2016 ginning season this fall, USDA will ensure the application process is straight-forward and efficient.

The program estimates the costs based on planting of cotton in 2015, and therefore the local FSA offices already have this information for the vast majority of eligible producers and the applications will be pre-populated with existing data. Sign-up for the program will begin June 20 and run through Aug. 5, 2016 at the producer’s local FSA office. Payments will be processed as applications are received, and are expected to begin in July.

Since 2011, cotton fiber markets have experienced dramatic changes. As a result of low cotton prices and global oversupply, cotton producers are facing economic uncertainty that has led to many producers having lost equity and having been forced to liquidate equipment and land to satisfy loans. The ginning of cotton is necessary prior to marketing the lint for fiber, or the seed for oil or feed.

While the Cotton Ginning Cost-Share program makes payments to cotton producers for cotton ginning costs, the benefits of the program will be felt by the broader marketing chain associated with cotton and cottonseed, including cotton gins, cooperatives, marketers and cottonseed crushers and the rural communities that depend on them, officials said.

The program has the same eligibility requirements as were used for the 2014 Cotton Transition Assistance Program, including a $40,000 per producer payment limit, requirement to be actively engaged in farming, meet conservation compliance and a $900,000 adjusted gross income limit.

To learn more about the Cotton Ginning Cost-Share program, visit here or contact a local FSA county office.