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Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.
The USDA announced today that the cotton transition assistance program (CTAP) enrollment will begin next week. The 2014 Farm Bill provided cotton growers with a new Stacked Income Protection Plan (STAX) beginning with the 2015 crop year. Since this program is not in place for the 2014 crop year, there will be a cotton transition payment for the 2014 crop year.
This payment amount has been calculated at 9 cents per pound and will be paid on 60% of the cotton base acres. If the STAX program is not in place for any county in 2015, the transition assistance payment will be available on 36.5% of the cotton base acres.
It appears that any applications approved before October 1, 2014 will be reduced by an automatic 7.2% and if approved after that date, the reduction will be 7.3%. These reductions relate to the passage of the Budget Control Act of 2011.
Based on the verbiage contained in the release from USDA, I would assume that USDA will also reduce any ARC/PLC payments by these same percentages. We will keep you posted on that as we get additional confirmation.
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