WASHINGTON - U.S. Senators John Boozman (R-AR) and Mark Warner (D-VA) were joined by 24 of their colleagues in urging President Donald Trump to stabilize the cotton industry through the United States Department of Agriculture’s (USDA) Cotton Ginning Cost Share Program (CGCS).
“The cost share program is needed to provide policy stability in the absence of a comprehensive policy for cotton in the existing farm bill to respond to deep and sustained price and revenue declines,” the senators wrote.
The overwhelming majority of cotton grown in the United States is exported, making the industry dependent on open trade relationships with key markets. Unfortunately, lately the market has been heavily distorted by foreign competitors’ domestic subsidies, tariffs, and non-tariff barriers to trade, to the detriment of U.S. cotton farming families who are struggling to keep their farms operational.
USDA launched the CGCS program in June 2016 to provide cost share assistance payments to cotton producers for the 2015 crop. In the letter, senators urged the president to operate CGCS on an ongoing basis beginning with the 2016 crop.
In addition to Boozman and Warner, the letter is signed by Senators Lamar Alexander (R-TN), Roy Blunt (R-MO), Richard Burr (R-NC), Bill Cassidy (R-LA), Thad Cochran (R-MS), Bob Corker (R-TN), John Cornyn (R-TX), Tom Cotton (R-AR), Ted Cruz (R-TX), Lindsey Graham (R-SC), Martin Heinrich (D-NM), James Inhofe (R-OK), Johnny Isakson (R-GA), Tim Kaine (D-VA), John Kennedy (R-LA), Claire McCaskill (D-MO), Jerry Moran (R-KS), Bill Nelson (D-FL), David Perdue (R-GA), Pat Roberts (R-KS), Richard Shelby (R-AL), Luther Strange (R-AL), Thom Tillis (R-NC) and Roger Wicker (R-MS).
Full text of the letter is below:
Dear Mr. President:
We are writing to call attention to the ongoing economic struggles of the thousands of cotton farming families across the United States and their need for a stabilizing policy. Without some action by the Federal government, these 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.
In the past decade, the U.S. cotton industry has endured a World Trade Organization (WTO) challenge, increasing foreign subsidies, tariff and non-tariff barriers to trade, and a weakened U.S. safety net. This is all on top of the high risk, uncertain nature of farming. In recent years, these factors have resulted in the U.S. experiencing a 30-year low in cotton planted area; global cotton prices approaching $2.00 per pound before plummeting to as low as 57 cents per pound; and record production costs outpacing market returns for the last three years.
America’s cotton farming families have been forced to compete on a global playing field heavily weighted to the advantage of competitors in countries like China and India who benefit from significant government subsidies and intervention.
In addition, U.S. cotton is not on par with the safety net available for other row crops, meaning cotton producers are much more exposed to the highly cyclical nature of commodity markets and global policy manipulations by foreign governments. This scenario is weakening the U.S. cotton industry’s infrastructure that includes farms, gins, warehouses, marketing cooperatives, merchants, cottonseed processors and merchandisers, and textile manufacturers that sustain economies across the 17-state Cotton Belt from Virginia to California. Over the past decade, the numbers of businesses involved in the ginning and warehousing of cotton have declined by 33 and 21 percent, respectively. It is imperative that we protect the remaining 20,000 businesses in this industry that employ 126,000 people and generate over $21 billion in revenue.
In an effort to help stabilize the industry, we respectfully request that the administration, through the U.S. Department of Agriculture (USDA), operate on an ongoing basis the Cotton Ginning Cost Share Program beginning with the 2016 crop year. The cost share program is needed to provide policy stability in the absence of a comprehensive policy for cotton in the existing farm bill to respond to deep and sustained price and revenue declines. This cost share program was operated by the previous administration for the 2015 crop, and it is an effective and efficient means of providing economic relief to America’s cotton farming families.
We strongly support the administration taking this action and stand ready to work with you, USDA, and the cotton industry to address this important need as quickly as possible. Thank you for your consideration and support.