A Welcome ‘Shot In The Arm’

The National Cotton Council (NCC) is urging U.S. cotton producers to participate in USDA’s Cotton Ginning Cost-Share program (CGCS), a one-time initiative with a June 20-Aug. 5 sign-up window.

What is the CGCS program’s purpose?

cotton ginning
Producers have until Aug. 5, 2016, to sign up for USDA’s Cotton Ginning Cost-Share program.

Using administrative authority it has under the Commodity Credit Corporation Charter, USDA created the CGCS program to expand and maintain the domestic marketing of cotton. USDA said the $300 million commodity marketing assistance program is aimed at providing “meaningful, timely and targeted assistance” to cotton producers by offsetting a portion of a producer’s 2015 crop season ginning costs.

USDA acknowledged that since 2011, cotton fiber markets have experienced dramatic changes. It said as a result of low cotton prices and global oversupply, cotton producers are facing economic uncertainty that has led to many having lost equity and being forced to liquidate equipment and land to satisfy loans. NCC responded to USDA’s announcement by offering sincere gratitude to Agriculture Secretary Vilsack for his help in making the CGCS program possible. We noted that the serious cotton market revenue decline also is due partly to heavily subsidized foreign competition, with no signs of the commodity’s price reaching the level needed to offset production costs. We stated that work continues with Congress and USDA on seeking long-term policy solutions for stabilizing the U.S. cotton industry.

How does the CGCS program work?
Program payments are based on the 2015 acreage of upland and ELS cotton, both planted and failed, the producer filed at their local Farm Service Agency (FSA) service center. Payments are calculated by multiplying certified acres times the regional payment rate times a producer’s share of the crop. Regional payment rates (to reflect regional costs of ginning) are: Southeast (AL, FL, GA, NC, SC, VA) – $47.44/acre; Mid-South (AR, IL, KY, LA, MO, MS, TN) – $56.26/acre; Southwest (KS, OK, TX) – $36.97/acre; and West (AZ, CA, NM) – $97.41/acre. Cost-share payments are capped at $40,000 per individual or entity and do not count against the 2014 farm law payment limitations. Payments will be processed as sign-ups are received and should begin sometime in July. Eligible producers are urged to sign up before Aug. 5, 2016 – as there will be no deadline extension.

Each applicant is required to be a person or legal entity who was actively engaged in farming in 2015 and who complies with requirements including, but not limited to, the conservation compliance provisions. To be eligible for a cost-share program payment, a producer’s three-year average adjusted gross income may not exceed $900,000.

A CGCS fact sheet the NCC distributed to its members is on our website at www.cotton.org/issues/2016/upload/16cgcsfact.pdf.  FSA’s “Cotton Ginning Cost-Share (CGCS) Program for 2015 Cotton Crop” notice that contains significantly more program sign-up and payment details and that was distributed to all FSA state and county offices in cotton-producing regions is on the NCC’s website at www.cotton.org/issues/2016/upload/ginnote.pdf. Producers also may contact local FSA offices. To find your FSA office, go to http://offices.usda.gov.

Gary Adams
Gary Adams

Gary Adams is president/chief executive officer of the National Cotton Council of America. He and other NCC leaders contribute columns on this Cotton Farming magazine page.

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