The US has renewed the Cotton Ginning Cost Share (CGCS) program. The program will allow cotton growers to receive a cost share payment based on their 2016 cotton acres reported to the Farm Service Agency (FSA), multiplied by 20 per cent of the average ginning cost for each production region.
Payments will be calculated based on a producer’s 2016 cotton acres reported to the FSA, with per-acre payment rates set at 20 per cent of the regional costs of ginning. America’s cotton producers have now faced four years of financial stress. In particular, cotton producers confront high input and infrastructure costs. That economic burden has been felt by the entire cotton market, including gins, cooperatives, marketers, cotton seed crushers and the rural communities that depend upon their success.
CGCS is aimed at providing direct marketing assistance to producers, alleviating a portion of the economic conditions producers are struggling with. US cotton is struggling due to heavily-subsidized foreign fiber competition and the immediate lack of a safety net policy on par with other crops. Reauthorizing this program for the 2016 crop will help cotton growers offset their ginning costs, which in turn will improve many growers’ financial situation and help keep them in business.