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Cotton Research, Promotion Program benefits everyone

Cotton check-off program explained following amendment offered in Senate. Benefit break-down provided.

In response to a proposed amendment to legislation under Senate consideration to terminate all commodity check-off programs, the National Cotton Council said the highly successful Cotton Research & Promotion Program (CR&P) should be continued.

For more, see here and here.

"Self-help programs such as the CR&P are more important than ever given the global market environment for U.S. cotton and the budget pressures on production and processing government research," NCC Chairman Charles Parker said. "Fortunately, the CR&P is a highly effective government/private sector partnership, one that generates returns for U.S. cotton producers and importers of cotton products through coordinated, effective research and promotion of U.S. cotton producers' end products."

The CR&P is charged with improving the demand for and profitability of cotton through research and promotion. Administered by the Cotton Board, the CR&P is conducted by Cotton Incorporated and governed by the USDA. It is funded entirely by assessments levied on U.S. cotton producers and importers of cotton and cotton products. USDA requires that all check-off programs conduct an independent review of their program every five years to evaluate the program's effectiveness. The study is peer-reviewed.

Parker pointed to a recent in-depth, independent economic effectiveness study contracted by the Cotton Board and conducted by Forecasting and Business Analytics, LLC. That firm reported that, "Unequivocally, cotton producers, importers and the government benefit from the check-off program."

The study concluded that for the life of the CR&P, it had generated an $8.80 return (for producers and the U.S. government) for each dollar invested by producers and a $14.80 return for each dollar invested by U.S. importers of cotton products. The program also generated the following positive economic returns:

  • U.S. cotton farm prices averaged 5.4 cents per pound higher;
  • U.S. cotton production averaged 500,000 bales higher;
  • Annual world consumer demand for cotton was higher by 2 million bales per year;
  • U.S. mill cotton consumption was 1.2 million bales more than it would have been without the program;
  • U.S. importers of cotton products increased profits by an average of $900 million per year. 
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