AgWatch


Farm Organizations Look For One More Farm Bill Change

SARA WYANT

WASHINGTON, D.C.
   Farm organizations worked like crazy this fall to avoid making any legislative changes or funding cuts in the 2014 farm bill – including a proposed $3 billion cut in crop insurance. 
   At the same time, there has been support building for at least one additional change – albeit one that can supposedly be made by the Secretary of Agriculture – to give cotton growers more farm bill support. 
   Cotton growers say they’re getting hammered for reasons beyond their control – primarily China’s manipulation of the global cotton market. China first drove up global prices to nearly double the average level by stockpiling cotton, and then abruptly switched its strategy in 2014 and is now dumping some of that fiber on the market. China is the world’s largest consumer, importer and stockholder of cotton and the second largest producer, after India. For U.S. farmers, the average net return on cotton has plunged from $254 per acre in 2013 to $74 per acre, according to the University of Missouri’s Food and Agriculture Policy Research Institute.
   House Agriculture Chairman Mike Conaway, who comes from Texas, the biggest cotton-growing state, has asked Agriculture Secretary Tom Vilsack directly to consider the proposal. “Cotton prices are in the tank, and the STAX (Stacked Income Protection Plan) program is not working as well as we thought it might, and so the cotton guys need some help,” Conaway says, referring to the revenue insurance plan that was created for cotton in lieu of making the fiber eligible for Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC).
   The National Cotton Council (NCC) gained a lot of momentum on Capitol Hill last week for its ongoing effort to persuade USDA to include cottonseed as an oilseed for farm program payments, with 100 lawmakers signing a bipartisan letter of support, including Rep. Rick Crawford, R- Ark., who chairs the Subcommittee on General Farm Commodities and Risk Management, and the Subcommittee’s ranking minority member, Rep. Tim Walz, D- Minn.
   Even Rep. Collin Peterson, the House Committee on Agriculture’s ranking member, who represents a Minnesota district, acknowledged that his southern brethren made a good point in their request to Agriculture Secretary Tom Vilsack to make cottonseed eligible for payments.
   After the letter was released, the American Soybean Association (ASA) also weighed in with a show of southerly love, saying that they supported the National Cotton Council’s effort to encourage the department to use its discretionary authority to establish a cottonseed program under Title I of the Agricultural Act of 2014. 
   But here’s the caveat: “ASA’s support is conditional on the determination that the estimated cost of the program can be offset, if necessary, without negatively impacting funding for other farm bill programs or reducing funding for crop insurance, and that it will not violate U.S. commitments under the WTO.” 
   As Agri-Pulse reported on Dec. 9, the change could cost as much as $1 billion annually, according to the Agriculture Department’s internal estimates.
   During a board meeting last week, a majority of the American Farm Bureau Federation’s board of directors also signaled their support for this change in USDA policy.
   But whether or not these efforts provide enough political firepower for USDA officials to change their mind is still a bit uncertain. 
   Sources familiar with USDA’s review say it has raised a series of concerns, including the potential cost, which might have to be offset by cuts in other spending. Under the 2014 farm bill, USDA supposedly has the discretion to cover additional oilseeds under a program called Profit Loss Coverage (PLC) at a price trigger, or “reference price,” of $20.15 per hundredweight. Cottonseed has been recently selling for well under $15. Another big concern is whether the agency truly has the legal authority to make the change in designation.
   Thus far, USDA officials have mostly been mum on the matter. Responding to a request for comment from Agri-Pulse, USDA staff sent the following statement:
   “We recognize that these are tough times for cotton producers, and are thankful that there is a safety net in place that provides the Stacked Income Protection Program and Supplemental Coverage Option, which Congress created in the 2014 farm bill. USDA is currently analyzing the complex legal, programmatic and policy issues associated with declaring cotton an oilseed, which would make the crop eligible for additional safety net programs like ARC (Agriculture Risk Coverage) or PLC.” ∆
   SARA WYANT: Editor of Agri-Pulse, a weekly e-newsletter covering farm and rural policy. To contact her, go to: http://www.agri-pulse.com /
   Note: Agri-Pulse Senior Editor Philip Brasher contributed to this column. 

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