LUBBOCK, TX – Given the deadline to revise a bill in 12 to18 months, cotton farmers and legislators are switching gears from lint to oil, seeking alternatives to aid the American cotton farmer to offset the impact of three years of low commodity prices.
Lint cotton prices started to decline in direct correlation with the World Trade Organization ruling against U.S. cotton in the case Brazil vs. United States in 2002.
“When Congress did the last farm bill one of the things they did was remove cotton out of the Title 1 because that was one of the sticking points,” said Darrin Hudson, Ph. D, Texas Tech University Department of Agricultural and Applied Economics professor, was a result of that ruling.
In doing so, lint cotton was removed from Title 1 and moved into the insurance title of the farm bill.
Title 1 programs are traditional farm income and price support mechanisms. Other commodities in Title 1 receive payments equal to the difference between the legislated price and what the market price is. Essentially, if the market price is above the legislated price, the farmer/producer receives no payment.
Executive Vice President of Plains Cotton Growers Inc., Steve Verett said, “the [insurance program] was not going to provide the kind of risk management cotton farmers needed for the long-term price decline.”
“We’ve been looking at any other option or other ways that we can try to provide that Title 1 support,” Verett said.
Aside from assessing risk, cotton is a unique crop from the standpoint that it produces two co-products, lint and cottonseed oil, which Verett said is just as valuable as vegetable oil.
With oil seeds comprising a significant amount of products in the U.S. there happens to be a minor oilseed title in the farm bill.
“A thing about the minor oilseeds is, individually, there are very small acres but in aggregate they are an important component. And so they deserve that protection,” said Shawn Wade, director of policy analysis and research for Plains Cotton Growers Inc.
Cottonseed oil recognition is at the forefront of Plains Cotton Growers Inc.’s agenda for this upcoming Farm Bill revision. Verett and Wade advocated for cottonseed oil to be recognized by the U.S. Secretary of Agriculture. Though cottonseed oil was not accepted in the minor oilseed title, the Secretary did hear the public and issued a one-time payment for the sharing of ginning cost.
Want to voice an opinion or keep up with the latest and upcoming hearings? Visit http://www.agriculture.senate.gov/hearings?mode=list to learn more.
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