Thursday, June 8, 2023

Preserving The Safety Net

A National Cotton Council priority has been and continues to be shoring up cotton producers’ income protection and maintaining viable risk management programs.

gary adams, ncc
Gary Adams
What were major efforts in this arena?

■ During the past four years, the NCC worked diligently with Congress and the Administration to return Upland cotton as a covered commodity in Title I of farm law and to strengthen risk management through crop insurance programs.

Amending the 2014 farm law to add seed cotton for the 2018 crop was a major accomplishment and led to its continuation in the 2018 farm law. Protecting the seed cotton program and cotton crop insurance programs will be paramount in the next farm bill.

Regarding trade, cotton-heavy counties received critically important Market Facilitation Program payment rates due to the damage from China retaliatory tariffs. Working to resolve the damaging tariff issues also is a high NCC priority.

As such, the NCC continues to brief U.S. government officials on the specific changes needed to improve access for U.S. cotton/cotton products in China and the importance of reaching a trade resolution and prioritizing China purchases of U.S. cotton as part of any purchase agreement.

Are these benefits measurable?

■ An NCC analysis showed how producers’ incomes were bolstered from Gin Cost Share, MFP, Price Loss Coverage program payments and crop insurance programs. The analysis reveals that since 2015, these total benefits have been delivered: $541 million in Gin Cost Share payments; $1.7 billion in MFP payments; and an estimated $1.4 billion in PLC payments.

ncc website
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Because county-level enrollment data has not been released, Agricultural Loss Coverage payment estimates were not included in this analysis.

The Stacked Income Protection Plan and multi-peril cotton crop insurance benefits also have delivered monetary benefits. For the 2015-18 period, average STAX per-acre premium subsidies amounted to $99 million or $33 per acre and STAX average net indemnities paid averaged $67 million or $22 per acre for those purchasing the product.

For the 2014-18 period, multi-peril Upland cotton buy-up insurance subsidies averaged $489 million or $46 per acre. Net indemnities averaged $446 million or $42 per acre for those purchasing coverage. For extra-long staple cotton during the same period, premium subsidies averaged $14 million or $53 per acre, and net indemnities averaged $45 million or $175 per acre.

Cotton producers also have benefited indirectly from NCC’s diligence on numerous regulatory matters. That includes monitoring court cases and agency rulemaking on such issues as endangered species, crop protection product registrations, and “Waters of the United States.”

In these challenging economic times and with continuing production uncertainties, the NCC must increase its membership base. I encourage all cotton producers and other industry members to support the NCC so it can continue to vigorously advocate for U.S. cotton.

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

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