Cotton, dairy fix included in budget deal

By Jessica Domel

Just before 5 a.m. Friday, the U.S. House of Representatives approved a landmark multi-billion dollar budget deal that includes much-needed assistance for American cotton growers and dairy farmers.

“The Bipartisan Budget Act not only helps our government move forward, but ensures defense funding, which is essential, and incorporates long overdue disaster relief in hurricane-affected areas, among other necessary provisions,” Johnie Reed, president of Plains Cotton Growers, said.

The deal, which is expected to be signed by the president Friday, allows cotton growers to use the Price Loss Coverage Program (PLC) or Agriculture Risk Coverage (ARC) in the farm bill for both cotton seed and lint.

“We have worked toward a long-term solution for growers for many years now, and we appreciate our friends in Congress who have been steadfast in their support and understanding of our needs,” Reed said. “This is significant for cotton growers who for years have operated without a viable safety net, and this will allow many growers to stay in business.”

Cotton was largely left out of farm bill safety net programs following a World Trade Organization dispute with Brazil over cotton supports.

“This gives certainty to our cotton farmers,” Steve Verett, executive director of Plains Cotton Growers, said in an interview with the Texas Farm Bureau Radio Network. “They know now they will be like the other covered commodities. If we have extended periods of low prices, they’ll have a safety net to help fill in the gaps. That’s what’s been missing for cotton over the past four years.”

As far as covered acres, Verett said the same procedure that was done in 2014 for all the other commodities will be used.

If a cotton farmer has generic acres today, he/she will be able to go back and take 9-12 planting, and it will be average of that or 80 percent of current generic base. That will become seed cotton base for ARC or PLC, Verett said.

“I’m aware of questions that have been raised by some of the critics, especially about why we are dealing with a farm bill issue in this disaster package. It was the best vehicle to attach it to,” Verett said. “For the cotton fix, it was a budget neutral proposal when it came out of the House. It may have ended up being a little score it, but very little. It’s not like we were latching on to a bunch of disaster money to fix it. This was fix within the provision of the cotton title in the 2014 farm bill.”

According to POLITICO, allowing cotton in Title I safety net programs in the farm bill is estimated to cost $3 billion over a decade. The cost would be largely offset by eliminating cotton’s STAX program.

Assistance to American dairy farmers would increase through the budget by reducing premiums for small and mid-size producers and allowing monthly payments instead of bi-monthly, POLITICO reports.

“The program itself is basically a disaster-type insurance program that producers can buy into if they choose to. The ability to raise the amount of milk covered, at the basic level, helps producers on different sides of the economics, but also then your coverage amount is cheaper for that amount of milk produced. It makes it better for anyone who chooses to be involved, ” Darren Turley, executive director of the Texas Association of Dairymen, said. “Going to monthly calculations we feel like will help with fast moving changes in feed or conditions that most producers see regularly in Texas.”

It would also increase tier I coverage to five million pounds of production history.

“We are very happy with the ability to have this done now and not have to rely solely on the farm bill to have this go forward for us,” Turley said. “I think it will be the fix we need as we get into that discussion as well. It’s a great first step for us and really sets us up for a successful farm bill as well.”

Sign up for the Margin Protection Program-Dairy, which was not very successful before this dairy fix, according to Turley, would then be reopened for 90 days following the signing of the bill.

“This farm bill that we’re still in is the first time that we’ve had this program. Some of the numbers that were in just don’t work out. The bimonthly calculations seem to hurt as at times,” Turley said. “I think these are steps in the right direction. It’s not a subsidy program. It’s not the same as a true crop insurance. It’s also voluntary by producers. One of the things we’ve seen is when the calculations weren’t really working and the program wasn’t really having an impact, we were seeing producers pulling away from the program. I think this helps us try to encourage producers to stay involved and to keep working to try to make this program functional and to try to fine tune it to where it will really be a good program in the future.”

Economists estimate the provision would cost $1.1 billion.

The budget also includes $90 billion in disaster relief, including funding for Hurricane Harvey relief efforts.

“While Texans have begun the rebuilding process in the wake of Hurricane Harvey, our state is still in need of resources as we recover from the most extreme rain event in our nation’s history,” U.S. Senator John Cornyn said. “I applaud the Texas congressional delegation for taking the first step, and I appreciate Governor Abbott and the Senate Appropriations Committee for working with us to strengthen this bill. Helping Texans recover and rebuild has been my top priority.”

U.S. House Agriculture Committee Chairman Mike Conaway of Texas said the relief includes vital improvements to standing disaster programs and addresses significant gaps in the safety net for cotton and dairy farmers.

“From natural disasters to predatory trade practices, America’s farm and ranch families face unique and daunting challenges every day. We have more work to do on their behalf in the farm bill, but today was an important step forward,” Conaway said.

The budget also removes the $20 million cap on livestock-related expenditures under the Federal Crop Insurance program to provide more risk management options for cattle, swine, lamb and dairy farmers.

Six million dollars is included to fight the opioid addiction crisis. The budget also extends importance energy tax provisions, which were not included in the tax reform bill.

Texas Farm Bureau worked with the Texas delegation throughout the budget process to ensure the needs of Texas farmers, ranchers and dairymen are met moving forward.

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