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Jun 8, 2016
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USDA to give targeted assistance to cotton producers

By
Fibre2Fashion
Published
Jun 8, 2016

America’s Agriculture Secretary Tom Vilsack has announced that the US Department of Agriculture (USDA) Farm Service Agency (FSA) will provide an estimated $300 million in cost-share assistance payments to cotton producers through the new Cotton Ginning Cost-Share programme, in order to expand and maintain the domestic marketing of cotton.


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"Today's announcement shows USDA continues to stand with America's cotton producers and our rural communities," said Vilsack. "The Cotton Ginning Cost Share programme will offer meaningful, timely and targeted assistance to cotton growers to help with their anticipated ginning costs and to facilitate marketing. The programme will provide, on average, approximately 60 per cent more assistance per farm and per producer than the 2014 programme that provided cotton transition assistance."

Through the Cotton Ginning Cost-Share programme, 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 per cent 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 programme 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 programme will begin June 20 and run through August 5, 2016 at the producer's local FSA office. Payments will be processed as applications are received, and are expected to begin in July, USDA said in a press release.

The USDA said that 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 repay loans. The ginning of cotton is necessary prior to marketing the lint for fibre, or the seed for oil or feed. While the Cotton Ginning Cost-Share programme makes payments to cotton producers for cotton ginning costs, the benefits of the programme 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.

The programme has the same eligibility requirements as were used for the 2014 Cotton Transition Assistance Programme, 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, the USDA said.

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