The Cotton Ginning Cost-Share (CGCS) program, announced June 6 by USDA, is a one-time $300 million program to offset a portion of a cotton producer’s 2015 crop season ginning costs. It resulted from the agency utilizing its administrative authority under the Commodity Credit Corporation Charter Act to help facilitate the marketing of commodities.

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Cotton Ginning Cost-Share program will provide $300 million to offset portion of cotton producer's 2015 crop season ginning costs. (Photo: vsanderson/Thinkstock)

"Today's announcement shows USDA continues to stand with America's cotton producers and our rural communities," said Agriculture Secretary Tom Vilsack. "The Cotton Ginning Cost Share program will offer meaningful, timely and targeted assistance to cotton growers to help with their anticipated ginning costs and to facilitate marketing. The program will provide, on average, approximately 60% more assistance per farm and per producer than the 2014 program that provided cotton transition assistance."

Program specifics

Payments will be calculated as following:
-Certified acres times regional payment rate times a producer’s share of the crop.
-Regional payment rates (to reflect regional costs of ginning) are as follows:
-Southeast (AL, FL, GA, NC, SC, VA) - $47.44/acre;
-Mid-South (AR, LA, MO, MS, TN) - $56.26/acre;
-Southwest (KS, OK, TX) - $36.97/acre; and
-West (AZ, CA, NM) - $97.41/acre.

Cost share payments are capped at $40,000 per individual or entity. Cost share program payments do not count against the 2014 Farm Bill payment limitations.

To be eligible for a cost share program payment, each applicant is required to be a person or legal entity who was actively engaged in farming in 2015 and who complies with requirements including, but not limited to, those pertaining to highly erodible land conservation and wetland conservation provisions. A producer’s three-year average adjusted gross income may not exceed $900,000 in order to be eligible for the cost share payments.

Program sign-up begins June 20, 2016 and runs to August 5, 2016. Payments should be available shortly following an individual completing the sign-up process.

“The U.S. cotton industry commends Secretary Vilsack for his efforts on making possible a program that will provide much-needed marketing assistance for our nation’s cotton producers,” National Cotton Council Chairman Shane Stephens said.

The Mississippi cotton warehouseman said although this program will provide direct marketing assistance to producers, it also will help stabilize a seven sector industry that provides employment for some 125,000 Americans and generates more than $75 billion in annual economic activity.

American Farm Bureau Federation President Zippy Duvall thanked the secretary in a media statement, saying the program gives cotton farmers hope in a time of difficult market conditions.

“We are especially appreciative that Secretary Vilsack took the time to work with us, the National Cotton Council and others to arrive at this special, one-time arrangement without requiring legislative action,” Duvall said. “This is a clear example of what we can accomplish when we work together. Our cotton farmers and the rural businesses they partner with will be better off because USDA took action to address a serious market downturn in their industry.”

American Cotton Producers Chairman Mike Tate of Alabama said, “Our producers appreciate Secretary’s Vilsack’s efforts in providing marketing assistance to a commodity that is suffering a serious decline in market revenue partly due to heavily-subsidized foreign competition, with no signs of the commodity prices reaching the level needed to offset their production costs. The industry will continue to work with Congress and USDA to seek long-term policy solutions that will provide stability for the cotton industry.”

More information about the CGCS program is at www.fsa.usda.gov/cgcs or by contacting the local FSA office. To find a local FSA office, visit http://offices.usda.gov.

Additional CGCS program information is available from USDA’s news release on the program announcement at http://1.usa.gov/1UCV0wX.

Sources: National Cotton Council, USDA, American Farm Bureau Federation