Politicians Join Cotton Growers in Urging Trump to Renew Cost Share Program

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The historic volatility of the U.S. cotton market, impacted by factors ranging from weather conditions and price fluctuations to fashion trends and global economics, calls for continued government support, according to industry organizations and politicians from both parties.

A bipartisan block of 135 Senators and Representatives have sent letters to President Trump urging the administration’s support, through the Department of Agriculture, to continue to operate the Cotton Ginning Cost Share Program for the current crop year and on an ongoing basis.

The letter from the Senators said, “In the past decade, the U.S. cotton industry has endured a World Trade Organization challenge, increasing foreign subsidies, tariff and non-tariff barriers to trade, and a weakened U.S. safety net.”

The letter from House members noted that in recent years, these factors have resulted in the U.S. experiencing a 30-year low in cotton planted area, global cotton prices approaching $2 per pound before plummeting to as low as 57 cents per pound, and record production costs far outpacing market returns for the last three years.

“As a consequence, America’s cotton farming families are struggling to compete on a lopsided global playing field heavily weighted to our competitors,” the House letter said.

The National Cotton Council and 82 other cotton-interest organizations sent a similar letter to Trump that requests his administration to provide economic relief to U.S. cotton farming families.

The letter stated that to help bridge the gap until a new farm bill is adopted by Congress, “The cost share program will provide policy stability in the absence of a comprehensive policy for cotton in the existing farm bill. A cost share program was operated by the previous administration for the 2015 crop and proved to be an effective and efficient means of providing economic relief to America’s cotton farming families.”

The letter also noted that in the absence of the safety net offered to other crops, cotton producers are much more exposed to the volatile nature of commodity markets and global policy manipulations.

Without some action by the federal government, the letter stated, “nearly 18,000 cotton families will continue to see their equity erode or take on a greater debt load as they hope to keep their family farms in operation.”

[READ MORE ABOUT THE COTTON SECTOR: US COTTON EXPORTS SURGE, FED BY VIETNAM AND CHINA]

Another letter sent to the president from 1,605 agricultural lenders, agribusinesses and rural enterprise businesses, strongly recommended the administration use its discretionary authority to assist in this situation and specifically authorize assistance similar to the recent Cotton Ginning Cost Share program. It stated that this assistance would help bring much needed stability and support to producers, and in these times of low prices, allow them to have the balance sheets necessary to procure production financing.

That letter cited USDA data showing cotton market returns fell short of the total costs of production. Losses in the past three years, it noted, are unlike any in recent history for U.S. cotton.

“Unfortunately, the recent economic pressures will intensify as projections by the Food and Agricultural Policy Research Institute for 2017 and 2018 are for lower cotton market revenue relative to the 2016 crop,” the groups stated. “Prolonged production declines of this scale will result in severe strain on the entire cotton infrastructure, which continues to be the backbone of many small, rural communities.”


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