USDA sent proposal to OMB several weeks ago
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USDA Sec. Tom Vilsack’s staff has been looking at what authorities exist under the Commodity Credit Corporation (CCC) Act and other authorities to see if there are tools there that could help the cotton industry. One of the options would provide support to help facilitate the marketing of commodities. Since cotton has to be ginned to be able to market it, USDA could provide a cost-share option to producers to help pay for part of their ginning costs. Vilsack recently noted the details of such a program need to be worked out, including having the cotton industry provide the numbers on ginning costs and the amount of cotton being ginned annually – that has apparently been provided USDA. The secretary mentioned a figure of $300 million with $150 million being made available to cotton producers to help offset ginning costs. USDA and cotton industry action on the possible if not likely program has accelerated in recent weeks. USDA sent a proposal to the Office of Management & Budget (OMB) several weeks ago. OMB has asked questions about the proposal, which reportedly would involve just the 2015 cotton season, and could cost an estimated $500 million, a figure OMB apparently wants lowered. That will likely be part of today’s discussions. Subject to change, any program would be based on 2015 crop acreage, and not on bales produced. However, some differentials to the payment formula would be based on yields.
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