PCG Highlights:

Past Success Still Paying Big Dividends

 

 

Communication Was Key To Getting 1999 & 2000 AgAssistance

         PCG has once again used its leverage in Washington to help gain an importantAgricultural Assistance Package to offset the effects of low commodity prices.PCG was instrumental in putting out the message for High Plains cottonproducers and the current assistance package tells the story of how effectivePCG and the rest of the regional and national cotton organizations were intheir efforts. Cotton producers across the nation have already received thebulk of the payments they will receive under the assistance plan. Fortunatelythe beneficial effects do not stop there. Producers will continue to benefitfrom improved export markets as a result of the reinstatement of the Step 2program, will in many cases not have to worry about exceeding their paymentlimits on marketing loan gains and Loan deficiency payments for the 1999 cropand will enjoy another year of reduced crop insurance cost as a result of thecontinuation of the premium subsidy instigated in the 1998 Disaster AssistanceBill.

 

Emergency Aid Package A Boon toHigh Plains Producers

         Here are a few of the key cotton provisions of the Agricultural AssistancePackage:

•        Issuance of a supplemental Ag Market Transition Act payment equal to 7.33cents, 100% of the 1999 AMTA payment rate. [$5.54 Billion]

•        Reinstatement of the Step 2 Marketing Assistance Program for life of currentFarm Program, retroactive to October 1, 1999.

•        LDP/marketing loan gain payment limitation DOUBLED to $150,000 per entity forthe 1999 marketing year.

•        Authority of the Secretary of Agriculture to issue generic certificates forStep 2 payments, marketing loan proceeds and other uses.

•        Continuation of the additional estimated 30% subsidy on Federal Crop Insurancepremiums for the 2000 crop year. [$400 million]

•        Initiation of a Crop Loss Assistance Program for 1999 crop losses. [$1.2Billion]

 

Cottonseed Assistance :

Approvedin 2000 Omnibus Budget Bill for 1999 and as part of the 2000 DisasterAssistance Package

         Failure to inject a cottonseed assistance component into the initial 1999Agricultural Assistance Package approved as part of the USDA Budget Bill didnot keep PCG and other industry groups from continuing to support the concept.The sustained effort paid off and producers reeled in the benefits ofapproximately $100 million devoted to provide supplemental payments oncottonseed in an effort to make up for lost revenue resulting from 20-year lowcottonseed prices first experienced in 1999. The effort was supported by PCGthrough continued calls to House Ag Committee staff members who eventually wereable to identify funds to pay for the program. PCG hard to communicate itsthoughts on how the program should be administered to provide the maximumbenefits to both producers and cotton gins that rely on revenues fromcottonseed.

         Subsequently Cottonseed Assistance, also totaling $100 million, was included aspart of the 2000-crop Disaster Assistance Package.

 

Quality Loss Program

         The second phase of the2000 Crop Disaster Program brought a significant amount of assistance togrowers who did not qualify for the initial, yield-based, part of the CDP.Growers who may have already received some assistance under the CDP for yieldlosses could also be eligible for additional assistance under the QLP.

         The Quality Loss Program provided assistance to growers of eligible crops thatcan demonstrate a minimum 20 percent decline in the quality/price of their 2000crop commodity compared to a long-term average quality/price produced in thecounty. Growers were able to apply for the program based on the smallest unitof the commodity for which they can produce records.

         Cotton growers were able to apply for assistance on a bale-by-bale basis byproviding production evidence showing the average loan value for each bale.Each bale’s loan value would then be compared to the county average loan valueused to compute quality adjustments for the CDP program.

         This comparison was then determine whether or not a qualifying 20 percentquality reduction has occurred. If the 20 percent threshold is met, then thebale would be assigned to one of five Quality Loss Levels based on the actualloss in value relative to the county average.

         Payment rates for each level of loss were then be calculated as the differencebetween 100 percent of the Crop Disaster Program payment rate (59 cents perpound for cotton) and a percent of the affected CDP payment rate based on theassigned quality loss level for each level.

         The final 2000 QLP payment rate equals 65 percent of the difference between thefull CDP price and the applicable percentage of the CDP payment rate.

         The Quality Loss levels and the payment rates applicable to them are asfollows:

Quality Loss Levels and Payment Rates for Cotton

 

 

 

QLP Payment Rate

Level

For quality losses between…

Assigned quality

Loss Percentage

based on difference between 100% of CDP price and…

Upland Cotton

Pay. Rate

I

20.0%

and

29.9%

25.0%

75% of CDP price

$0.0959

II

30.0%

and

49.9%

40.0%

60% of CDP price

$0.1534

III

50.0%

and

69.9%

60.0%

40% of CDP price

$0.2301

IV

70.0%

and

89.9%

80.0%

20% of CDP price

$0.3068

V

90.0%

and

100%

95.0%

5% of CDP price

$0.3643

 

         A combined $80,000 “per person” payment limitation is applicable for allbenefits provided through the Crop Disaster Program and the Quality LossProgram.

 

Boll Weevil Eradication Beginsin Three High Plains Zones

         PCG helped the grower steering committees in four proposed eradication zoneswith matching funds for communication efforts and provided unlimited staff timeto help prepare advertising, direct mail and other literature used in educationefforts prior to grower referendums in 1998 and 1999. Three of these zonesapproved referendums and began Fall boll weevil treatments in 1999. The fourthzone narrowly missed the 2/3rds super majority necessary to begin activeeradication and will likely revote sometime during the 2000 crop year.

 

TexasLegislature Provides Boll Weevil Eradication Funds

         PCG worked hard during the Texas legislative session to help win approval of atotal of $75 million boll weevil eradication cost-share funding from the State.These funds will be used to provide up to a 20% cost-share in activeeradication zones. Future efforts will focus on getting additional cost-sharefunds for new zones activated after 1999.

 

Partners With Producers

         PCG officials have been actively involved with the development of a producer/agricultureawareness campaign across the South Plains. The goal of the Partners withProducers campaign is to increase awareness of the important role ag plays inthe South Plains economy and how it affects individuals in Lubbock not directlytied to the farming industry. The goal of the program is to increase publicsupport for agriculture and the need for agricultural support programs.

 

Monsanto Responds To PCG OffersReplant/Crop Destruct Programs

         Monsanto Corporation and Paymaster Cottonseed have announced that they willrenew the popular Replant and Crop Destruct Program started in 1999 ontransgenic striper varieties of their popular seed offerings. The program hasbeen modified several times since 1999, although it still offers producers anopportunity to receive either one free round of replant seed or a partialrefund of their seed cost should the crop be lost early in the season. Theprogram is a direct result of PCG’s ongoing communication with Monsanto andPaymaster to encourage marketing programs that provide real benefits to cottongrowers. The program, available only to growers who plant eligible Paymasterstripper varieties, open the door to transgenic cotton for thousands of drylandand irrigated cotton growers on the High Plains.

 

PCG Board Restructuring Approved

ParticipatingGins Earn Board Representative In 1999

         All PCG member gins will now be represented on the PCG Board of Directors. PCGProducer Board members will no longer be selected at county-wide electionmeetings. Instead they will be appointed, selected or elected by the producersat each 100 percent dues-paying gin in the 25-county region.

         Business Board of Director members can be selected from each PCG county by acaucus of all PCG Producer Board members in the county.

 

1998 Disaster Assistance

         Final approval of 1998 Disaster Aid Package brings MILLIONS of dollars in muchneeded financial aid to cotton growers on the Texas High Plains. The disasterrelief package contained two separate components. The first was the release ofMarket Loss Assistance Payments (MLA) by USDA FSA totaling some $3 billion.Also referred to as supplemental AMTA payments, the MLA payment rate for cottonwas about 4 cents per pound. The second part of the relief package brought $2billion to producers who experienced either single or multiple year losses as aresult of drought, flood or insects that met the 35percent loss threshold forprogram participation.

 

FCIC Handbook Changes for 1999

         Starting in 1999 the Federal Crop Insurance Corporation is currently decidingwhether or not to approve a change in the number of green bolls it necessary toequal one pound of cotton lint. A new standard of 350 green and unopened bolls(up from 250) is being proposed and reflects a change advocated by PCG in aneffort to update FCIC crop adjustment procedures.

         PCG Continues to work with researchers from the Texas Agricultural ExtensionService to further document the need for this change as well as future changesthat will provide producers a more accurate appraisal system. PCG alsocontinues to keep its eye on developing issues surrounding the crop insuranceprogram in order to encourage beneficial changes to the program that provideadequate coverage for and reasonable price.

 

Boll Weevil Eradication

         Plains Cotton Growers Inc has long supported boll weevil control in West Texas,beginning with the 1964 diapause program and continuing through the enhanceddiapause program in 1995. In 1998, PCG rededicated its efforts to achieve bollweevil eradication through continued support of West Texas cotton growers.

         PCG's role in boll weevil eradication includes assisting area growers and otherinterested parties to evaluate the technical aspects of future programs, makeavailable all data concerning the boll weevil on the Texas High Plains andfacilitate communication between producers, High Plains eradication zones andthe Texas Boll Weevil Eradication Foundation.

         PCG’s work is an important part of current effort to secure additional Stateand Federal funding for boll weevil eradication. PCG will continue to push forthe maximum possible levels of State/Federal cost-sharing in order to helpcotton producers successfully achieve the goal of eradicating the boll weevilfrom the Texas High Plains.

 

Diesel Tax Repeal

         In 1988 a proposal was put forth changing the collection point for the off-roadexcise tax for diesel fuel.

PCGfelt this proposal would prove costly to producers who would have been made topay the tax and then apply for a refund based on their exempt status.

         PCG officials worked with area Congressmen and Senators to fashion legislationrepealing the diesel tax which passed in 1988, saving producers both time andmoney.

 

Cotton Classification & HVI

LightSpots Added to Classing System -

         One of PCG’s earliest accomplishments was the successful effort to create theLight Spot grades within the cotton classing system. This goal was accomplishedin the late 1950’s and has been benefiting producers ever since that time.

 

LoanEligibility for Grades 62 &63 -

         In the early 1970's PCG officials began working to gain loan eligibility forcotton classified as color grades 62 and 63. PCG officials, working with USDAand industry organizations, achieved this goal in 1984.

 

Adoptionof High Volume Instrument (HVI) Testing -

         Since the 1960’s the development of instrument testing equipment was monitoredas a possible source of truly objective measures of cotton fibercharacteristics. By the early 1980’s technology has progressed to the pointthat many High Plains producers felt HVI testing would dispel price inequitiesbetween High Plains cotton and other growths.

         PCG worked with growers to secure installation of HVI equipment in the USDAClassing office in Lamesa in 1984 to start the process that led to the adoptionof HVI testing on 100 percent of the cotton grown in the US,

         This success has put millions of dollars into the pockets of High Plainsproducers every year through the sale of crops based on a fairer measure of itstrue value.

 

BarkDiscounts Lowered -

         A nagging problem for producers who stripper harvest their cotton has been thecontamination of lint with bark from the plant. Through the years producershave lost millions of dollars because of high discounts for bark.

         PCG officials and others believe that the arbitrary discounts imposed for barkwere out of line with the true nature of the problem as encountered by thetextile mill.

         Through research sponsored by PCG and conducted at Texas Tech University it wasdetermined that loan discounts for bark were in many cases twice as high as theactual discounts imposed in the spot market.

         As a result of this research bark levels included in the CCC Loan Schedule overthe past several years have reflected a fairer representation of barky cottontrue market value. PCG research has also helped in the development of newharvesting techniques that should continue to reduce the amount of bark incotton for years to come.

 

Conservation Compliance

         Debate of the 1985 Farm Bill brought with it many new programs and regulations.One of the most unpopular was a proposal to establish T-values for determiningproducer requirements under conservation compliance plans.

         PCG foresaw the potentially fatal consequences for producers unable to spendthe amount of money that could be required under these circumstances.

         Working with Congressmen and other industry officials, PCG was able tosuccessfully eliminate many of the more onerous requirements put forthinitially. Conservation continues to be a major topic and PCG is working onthese issues to the benefit of producers.

 

Disaster Programs

         The unpredictable nature of weather has a tremendous impact on the Texas HighPlains. When disaster strikes PCG has fulfilled a vital function by gathering supportand assistance for affected producers.

         An example is the 1986 Disaster Program, which was funded well short of theamount necessary, even though PCG had successfully achieved the inclusion ofthe High Plains in the legislation. PCG quickly re-established contact withCongressional leaders to obtain support for full funding.

         PCG spearheaded the effort, legislation passed in 1987 provided full fundingfor the Disaster Program and put millions of dollars into the pockets of cottonproducers.

 

Boll Weevil Control Program

         The boll weevil is known across the Cotton Belt of the United States ascotton's most economically damaging pest.

         For 30 years, from 1964, PCG operated a diapause control program that preventedthe establishment of this insect above the Caprock and allowed cotton producersto grow cotton without yield loss or season-long treatment expense. For a costthat never exceeded 50Ę per bale, millions of dollars remained in cottonfarmers’ hands and flowed into the West Texas economy.

In theearly 1990's a series of mild winters coupled with widespread expansion ofsuitable overwintering habitat (CRP) tipped the balance in the boll weevil’sfavor. PCG saw the threat to High Plains cotton production.

         The plan to combat this threat was to first, stop the further spread of thepest; second, to reduce the size of the infested area; third, to further reducethe infested acreage to a minimum so that an eradication program could wipe outremaining populations.

         The plan passed in a 1995 referendum and went into action that fall. More thanfive million aggregate acres were treated in the first season of the plannedthree-year enhanced program.

         Misperceptions, by a few, led to erosion of support for the plan in 1996. Somethought the insect could not be a problem in their own operations. Others wereconcerned over what they saw as funding inequities. Many producers lacking experiencewith the boll weevil grossly underestimated its potential impact.

Unpaidassessments and legal wrangling caused more than half the acreage that shouldhave been sprayed in 1996 to be left untreated. Even though treated acreageunder the crippled 1996 program exceeded three million acres the benefits fromits operation were limited.

         In 1997 there was no authority, and no money, for any areawide control of bollweevil in the High Plains even though populations grew to record high levels.Numbers were far in excess of those ever seen before and reached further northand west than many opponents had claimed possible.

         One hundred-six years of history has proven one thing about the boll weevil.Nowhere that it has become established has it voluntarily left or beeneradicated by environmental conditions. It is no different here on the Plains

         Thirty years of work by PGC to keep the boll weevil from becoming establishedas an economic pest, was worth millions of dollars to producers. This wasevident in 1998 by the boll weevil’s infestation of practically all of the HighPlains in the absence of any organized control program.

         PCG will continue to provide the organization and leadership necessary to workwith, and for, area cotton growers in the quest for an economically acceptablesolution to the boll weevil problem.

 

Research

 

         PCG has sponsored research related to insect control, varietal improvement andtechnology improvement throughout its 42 year history. Much of this work hasbeen overseen by PCG’s two main sub-committees - the Boll Weevil SteeringCommittee and the Plains Cotton Improvement Committee.

 

PlainsCotton Improvement Program

         In 1983 High Plains cotton leaders, working through area cotton compresses,began development of a unique program for improving the quality of the cottonproduced in the Texas High Plains.

         After one year of research with Dr. John Gannaway, area compress leadersproposed PCG as the organization best suited to act as coordinator for thecotton breeding research program because of its history of careful, efficientmanagement of producer funds.

         PCG accepted this role and currently oversees collection and distribution ofthe 10 cent per bale check-off that funds the Plains Cotton ImprovementProgram.

         The PCIP is overseen by the producer members of the Plains Cotton ImprovementCommittee. The PCIC is working to achieve the original goal of creating aself-funding endowment for continued research in future years, without the needfor additional grower contributions.

         PCIP research has already resulted in the availability of many new cottonvarieties as well as the development of valuable information about barkcontamination and other issues that threaten to reduce the economic returnsproducers receive for their crops.

 

Expansion of PCIC Adds To PCIPBenefit Package

         Starting with the 2000 crop year members of the Plains Cotton ImprovementCommittee voted to expand the scope fo the PCIP to include large-scale varietySystem’s-based variety trials and a Bacterial Blight screening project. Bothprojects have provided tremendous benefits to growers theorugh improedperformance evaluation so fo new cotton varieties and improved screening

 

Texas State Support Program

         In recent years PCG has also played a key role in coordinating the applicationof High Plains research dollars through the State Support Program of CottonIncorporated.

         CI’s ongoing commitment to research has brought forth a number of innovationsthat have proven highly effective on the far and in the area of new productdevelopment.

         Continued cotton research will be a key factor in the future success of eachand every cotton growing operation.

         By directing research to priority issues, growers are directing the future oftheir own farming operations through the development of new, cost-effectivemanagement tools and strategies.

 

AgriPartners

         PCG was one of the first organizations approached with the concept ofpartnering industry and research in an effort to encourage additional researchcommitments for solving real-world farm problems.

         Through this program PCG has helped bring about the collection of Boll WeevilGrid Trapping data used by producers tracking the development of boll weevilpopulations.

         PCG will continue to be an AgriPartners participant to maintain not onlycurrent data collection and distribution, but also to steer needed researchenergy into solving problems on the farm.

 

Promotion

 

         Ongoing promotional efforts to encourage the use of High Plains cotton continueto be an important aspect of PCG’s day-to-day operations.

Promotionalactivities take many forms including visits with foreign buyers and textilemill representatives traveling through the area, as well as advertising andother activities. PCG works closely with Cotton Incorporated and Cotton CouncilInternational in support of the projects to enhance the demand for cotton andcotton products.

         Changing the attitudes of purchasing habits of textile mills and reinforcingthe fact that high quality High Plains cotton is worth a premium price is theultimate goal of all PCG promotional activities.