Agriculture Secretary Tom Vilsack says USDA could make Cotton Transition Assistance Payments similar to those authorized in the first year of the 2014 farm bill to help cotton producers deal with the dire economic conditions they face.
That possibility comes with a big IF: Congress would have to restore Vilsack’s authority to use the Commodity Credit Corp. Act to provide funds to farmers to help them market their crops – authority Congress took away from the secretary under unusual circumstances in 2010.
Vilsack floated that possibility when he testified before a hearing of the House Agriculture Committee two weeks ago, and he repeated his willingness to do it again when he spoke to several thousand corn, soybean, grain sorghum and wheat farmers attending Commodity Classic in New Orleans today (March 4).
“It’s obvious to us we don’t have the statutory authority to designate cottonseed as an other oilseed,” Vilsack said, responding to a question raised about the issue during a press briefing that followed his speech in New Orleans.
“Having said that, we want to help,” he added. “There are two ways we could help, one of which has been shut off by Congress. We could use the Commodity Credit Corp.’s resources to provide some kind of payment program similar to the transition program that was in place for 2014 and 2015 for cotton growers.”
Congress specifically prohibited the Agriculture Department from using those funds, reportedly, because of charges USDA used such a program to try to help Arkansas Sen. Blanche Lincoln’s failed re-election claim in 2010. Lincoln lost to current Sen. John Bozeman because of Arkansas voters’ unhappiness with the Affordable Care Act.
Putting the clamps down
“Even though previous administrations had used that tool, and we had used that tool, they (Congress) put the clamps down and said ‘you can’t do that,’” the secretary said. “That prohibition should be released so that we have flexibility because cotton’s not the only commodity that’s going to be stressed from time to time, and we need flexibility.”
The other action USDA could take would be to develop a program in which USDA could cost-share on the ginning of cotton. Vilsack said USDA officials are working with the cotton industry to work out the details of such assistance.
Reports have said the cost-share could be as much as 50-50 with USDA allocating funds it can use to help producers overcome obstacles to marketing their crops. In this case, the obstacle would be the extremely low prices that have pushed cotton farmers out of cotton and into corn, soybeans and grain sorghum.
Under the 2014 farm bill, cotton producers received payments of about 5 cents per pound for their production average to help them move from the direct payments of the previous farm bills into the more insurance-oriented Agricultural Act of 2014. (The payment rate was 9 cents per pound, but it was paid on 60 percent of a grower’s cotton base. It was also reduced by sequestration.)
The secretary, who was making what will be his last appearance at Commodity Classic since a new administration will take office before the next one rolls around, said Congress needs to readdress the removal of cotton as a program crop when it writes another farm bill.
Addressing cotton in next farm bill
“Some of the commodities obviously need help,” he said. “It’s obvious that in future farm bills, there’s going to have to be a conversation about how cotton is treated. It’s tough because the rest of the world is watching what we do in cotton. So we want to do it right and do it in a way that doesn’t create problems for cotton and other commodities.”
Vilsack was also asked what farmers could do about the ongoing situation in which Iraq has continued to choose other sources than the U.S. for its imports of rice.
“I think it’s going to take persistence,” he said. “That and going to other markets. You want to make it so they don’t have any choice but to buy our rice.”
Read more on the Cotton Transition Assistance payment.