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Agricultural News

Plains Cotton Growers Claim Several "Wins" in 2011

Fri, 30 Dec 2011 12:24:29 CST

Plains Cotton Growers Claim Several The following is a review of the year 2011 from the perspective of the Plains Cotton Growers, headquartered in Lubbock, Texas.

Here at Plains Cotton Growers, we are the collective voice of the High Plains cotton producer. For more than 50 years, we've been tackling the tough issues facing cotton growers and bringing needed economic relief through beneficial legislative and regulatory changes. We identify producer leadership for the National Cotton Council, American Cotton Producers, the Cotton Board and Cotton Incorporated so as to ensure our growers' seat at the table. We've built relationships and coalitions, such as the Southwest Council of Agribusiness, that advance our goals and open the door to success.

Below are just a few examples of what your investment has enabled us to accomplish in 2011. We strive every day to make the absolute best use of your dollars to advance our goals for the High Plains cotton industry.

The 2011 growing season brought several changes to the Federal Crop Insurance program as the USDA Risk Management Agency implemented the new Combo Policy for Cotton and several other crops. The purpose of the Combo Policy was to streamline the coverage options for producers and align rating and pricing components for each policy to improve and simplify the insurance process for producers. As a result of these changes, however, several inconsistencies were identified within different parts of the new rules for cotton that threatened to reduce coverage to producers or prevent them from obtaining any coverage at all.

The Issue: Drought conditions in 2011 caused problems for cotton producers who planned to utilize a small grain as a cover crop in their cotton production systems.
The Process: PCG staff worked closely with the USDA RMA Regional Offices in Kansas City and Oklahoma City to ensure that growers, who intended the small grain to be used as a cover crop and attempted termination in timely manner, were determined to have complied with the termination rules and were able to plant and insure dryland cotton in 2011.
The result: USDA RMA rewrote the rules to clearly differentiate a small grain planted as a cover crop, restore the previous standard for termination of small grain cover crops and protect the ability of growers to insure dryland cotton.

The Issue: Early in the 2011 season an issue involving growers who planted cotton in a "30 inch-50 inch" row configuration was identified. In a nutshell, the issue involved USDA Farm Service Agency calculations, which reduced the percentage of acres considered planted to the crop under this configuration by 25 percent.
The Process: PCG worked to explain the adverse impact FSA's calculation had on producers through the reduced number of acres that would be considered insured as well as the adverse impact it would have on the Federal Crop Insurance program.
The Result: USDA FSA issued a specific exemption for Texas that would allow growers planting in a 30 inch-50 inch configuration to be able to certify their acreage as solid planted for irrigated and dryland production practices.

The 2011 crop year was the first that cotton producers could select additional coverage for cottonseed through the Federal Crop Insurance program. The Cottonseed (Pilot) Endorsement was developed by PCG in
2008-2009 as a mechanism to extend risk protection to a producer's cottonseed.
In its first year of availability, the Cottonseed Endorsement was added to more than 30 percent of the Cotton Lint policies that were sold nationally in 2011. In Texas, more than 45 percent of all cotton lint policies sold incorporated the new Cottonseed Endorsement. Texas producers purchased almost 80 percent of all of the Cottonseed Endorsements reported as sold by USDA RMA.
In Texas, the Cottonseed Endorsement provided an estimated $208 million of additional cottonseed coverage and $112 million in additional cottonseed insurance indemnity payments paid to Texas producers who suffered losses in 2011.
On the High Plains, the Cottonseed Endorsement provided an estimated
$125 million of additional cottonseed coverage and $69.2 million in cottonseed related insurance indemnity payments in 2011.

For months, Plains Cotton Growers staff has been communicating with legislators on Capitol Hill regarding the development of the 2012 Farm Bill. Our relationship with the Southwest Council of Agribusiness and Combest, Sell & Associates has enabled us to be on the front lines to help ensure a strong agriculture safety net and effective risk management programs for cotton producers. You can rest assured that we will continue to be diligent in our efforts even as negotiations stretch into 2012.



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