Plains Cotton
Growers, Inc.
Making A Difference
Since 1956 PCG has been advocate for the cotton growers of the Texas High
Plains. PCG's officers, Board and staff take this responsibility seriously and
strive to continue to fulfill the role of advocate. Even though today's
legislative and regulatory climate is increasingly hostile towards agriculture,
PCG continues to maintain good working relationships within the legislative and
regulatory arenas. Working on these relationships allows PCG staff members to
bring producer concerns directly to the individuals that make key decisions.
Working on its own, as well as in concert with organizations such as the
National Cotton Council, the Texas Agricultural Council, the Texas Ag Forum,
the Texas Farm Bureau and many others, PCG has the ability to bring the facts
about a situation directly to those who need to hear it most.
Farmers are perhaps the most vulnerable of agriculture's segments since they
are the least likely to find time to contact those deciding their fate in
Washington or Austin. That is where PCG makes the biggest impact for its
members. PCG builds and maintains the relationships that most producers have
little time to develop on their own.
Agriculture's support in Congress has been on a steady decline for many years
as more of the US Population shifts to urban areas. Likewise, the days when
agriculture could easily guarantee passage of important initiatives has passed.
Winning small victories as issues arise has been the key to getting legislation
and regulation to work for agriculture over the past few years. PCG has the connections
to help win these battles and to lay the groundwork for future efforts.
We look forward to being the advocate for High Plains cotton for years to come.
Disaster Assistance
2003/2004 Crop
Disaster Program
Devastating weather impacted a significant portion of the Texas High Plains
during the 2003 and 2004 growing seasons. In 2003 almost 1 million acres of
high yielding irrigated cotton acreage was lost to a string of hailstorms that
crisscrossed the area throughout the growing season. As a result of the
disastrous economic impact of these losses on cotton producers and allied
businesses in PCG's service area, the Plains Cotton Growers Board of Directors
gathered information about the scope of the losses and began communicating the
need for a broad emergency assistance effort. Initially this effort focused on
obtaining county level disaster declarations and developing Congressional
support for a 2003 Crop Disaster Program. As with many recent political and
legislative initiatives, the drive for a 2003 Crop Disaster Program stretched
through the 2004 growing season and finally reached a critical mass during the
2004 hurricane season when Florida was hit by multiple storms. Building on the
new outcry for federal assistance to offset Florida's losses, PCG's ongoing
efforts to keep the needs of High Plains producers on the Congressional radar
screen began to pay off. As a result of its long-term effort, PCG played a
pivotal role in securing the 2003/2004 Crop Disaster Assistance program.
In the end PCG worked closely with former Congressman Charlie Stenholm and
Congressman Randy Neugebauer to secure the 2003/2004 agriculture disaster
package. As the process unfolded Rep. Neugebauer ultimately found himself in a
position to develop and include an Ag disaster package in the broader
assistance package Congress developed to deal with Florida hurricane situation.
Staying in touch and maintaining a strong working relationship with key
Congressional leaders allowed PCG to play a significant role in the development
and passage of the 2003/2004 Crop Disaster Program (CDP), but PCG's involvement
did not stop there. Following passage PCG shifted its focus to making sure that
beneficial Crop Disaster Program rules the organization had helped secure
during development of the 2001/2002 Disaster Program were carried forward into
the 2003/2004 CDP. The following beneficial regulations will be part of the
2003/2004 CDP:
Use of a
Single Non-harvest Factor - Prior to the 2001/2002 CDP a multi-level Non-harvest factor imposed
greater benefit reductions on producers who lost crops early in the season
Price
Selection Ð
Producers allowed to choose higher of the Federal Crop Insurance Price or the
National Average Price Received to determine CDP benefit cap level.
Yield
Selection Ð
Producers allowed to use higher of the County Average Yield or the applicable
Crop Insurance APH Yield to determine eligibility and CDP benefit level by
unit.
Quality
Adjustment Ð
Development and implementation of a Bale-by-Bale Quality Loss Program (QLP) to
provide assistance to growers whose yields did not fall below the CDP
qualification threshold, but who suffered significant economic injury due to
excessive quality losses that adversely affected value and marketability of
their crops.
Federal Crop Insurance
Federal Crop Insurance is an important part of the risk management solutions
available to producers. As such changes to the program are continually
monitored by PCG to determine whether they will provide positive or negative
impacts to producers. PCG continues to fight for effective reforms so that the
Crop Insurance program provides cost-effective alternatives for risk
protection.
Background
IN June of 2002 Plains Cotton Growers, Inc. learned that USDA's Risk Management
Agency had announced changes to new rules deferring appraisals at least 15 days
beyond the applicable late planting period in cases where spring-seed crops
fail to emerge due to drought conditions.
PCG immediately took up the issue and worked closely with officials at RMA, the
House Agriculture Committee and Texas Cooperative Extension and the Texas
Agricultural Experiment Station to provide RMA decision-makers with the data
illustrating the need to revise the rules for non-emerged crops in 2002. Thanks
to the help of Texas Cooperative Extension's Dr. Randy Boman and the Texas
Agricultural Experiment Station's Dr. John Gannaway, who helped find and
evaluate data requested by RMA during this process, a change was announced
later that month.
The announcement changed the current rule that required appraisals on
spring-seeded crops which fail to emerge due to insufficient soil moisture to
be deferred for at least 15-days after the end of the applicable late planting
period. The revised rule reduced the deferral time to at least 5 days after the
end of the applicable late planting period. Additional time may be added to the
5-day deferral period if the insurance provider believes a situation exists
that necessitates a longer deferral period. The announcement, published in FCIC
Bulletin MGR-02-011, applies only to Texas cotton acreage in counties with June
10 or earlier final planting dates.
Unfortunately, the change included in MGR-02-011 only applied to the 2002 crop
in a specific set of Texas counties. PCG continues to discuss the issue with
RMA in an effort to secure a more permanent solution.
Compromise Developed
Agreeing
the best way to find solutions was to sit across the table from one another,
exchange information and fully discuss viable alternatives may prove to be the
turning point in the long-running dialogue between Plains Cotton Growers, Inc.
and the USDA Risk Management Agency.
Representatives
from PCG and the Risk Management Agency met in Kansas City February 16 and made
significant progress toward a compromise solution on the issue that protects
the interests of both High Plains cotton producers and RMA.
The
meeting's positive result should also allow the process to shift from seeking
solutions to finalizing an agreement. TO date a final decision has not been
issued by RMA on this issue although a decision memorandum has been developed
and forwarded to RMA Administrator Ross Davidson in Washington, DC.
PCG
has continued to communicate with RMA personnel and reiterate the importance of
finalizing the agreement and finding a way to temporarily implement the rule in
2005.
"The
membership of Plains Cotton Growers is extremely appreciative of the Agency's
willingness to work toward an equitable solution on the deferred appraisal
issue," says PCG Executive Vice President Steve Verett. "Working together we
have crafted what we believe will be a solution that allows producers to make
timely farm management decisions and maintains actuarially sound risk
management products for the U.S. cotton producer."
PCG
offers its sincere thanks to Dr. Randy Boman, Extension Cotton Specialist, Dr.
John Gannaway, Texas Agricultural Experiment Station Cotton Breeder, and
National Cotton Council Vice President - Producer Affairs Craig Brown, of
Memphis, TN, who participated in the meeting with PCG Staff members Steve
Verett and Shawn Wade, and to the USDA-RMA personnel who were involved in the
meeting.
Risk
Management Agency personnel that participated in the meeting were: David Hatch,
Associate Administrator, RMA; Tim Hoffmann, Director, Product Development
Division; Heyward Baker, Director, Risk Management Services; Ann Jenkins,
Insurance Management Specialist; Kent Lanclos, Senior Economist; Dave Bell,
Chief, Product Development-Loss Adjustment Standards; Sam Cameron, Senior Risk
Management Specialist; Shirley Harris, Risk Management Specialist; and Tara
Ponds, Risk Management Specialist.
Based on PCG's understanding of current provisions the T-yield change initially
proposed by RMA would have impacted growers in two significant areas.
First, it would have impacted the grower's APH calculation when 60 percent of the
T-Yield is substituted for low yields or zero production incurred in disaster
years. Second, it will reduce the Yield floor (80 percent of T-yield) that
establishes minimum coverage levels for all producers.
PCG efforts to modify the calculation to relate to yield per harvested acre
were unsuccessful. As it stands now T-yields in effect for the 2002 crop year
will be based on the average yield per planted acre for the 1991-2000 crop
years.
PCG and other cotton groups concerned about the update and its effects were
able to persuade RMA to modify the final ruling and allow growers to retain
previous T-yield substitutions at the 2001 level.
Growers were concerned about RMA's decision to update cotton T-yields due to
the fact that these yields are used to calculate substitute yields plugged into
a producers Actual Production History (APH) yield calculation for years in
which no crop was harvested and a zero yield exists. Growers are allowed to
substitute 60 percent of the County T-yield following changes made a couple of
years ago.
The concern of growers was that in many areas that have experienced significant
crop losses for several years the new calculation would significantly lower the
County average yield and subsequently lower the substituted yields in their APH
calculations, especially since early indications were that the substitutions
were to be done dynamically each year based on the current T-yield value.
The potential impact of the situation would have been a significant reduction
in coverage levels for many growers.
Farm Security and Rural Investment
Act of 2002
Development
PCG Submitted Recommendations For Farm Bill in June 2001
PCG's positions have reflected the needs and interests of cotton growers on the
Texas High Plains and what they feel is necessary for survival in the
short-term as well as what they feel would best provide the strengthened safety
net that they need for the future.
PCG worked closely with its producer Board members and had many conversations
with growers and industry leaders to derive a comprehensive proposal for
consideration as part of the broader effort to craft improved farm policy.
In this regard PCG has advocated several program alternatives as well as the
strongly held belief that the marketing loan program should be retained with
two important modifications. The first is the return to a formula derived loan
rate and the second is the need to increase the minimum cotton loan rate to not
less than 60 cents per pound in recognition of the increased cost associated
with producing a crop. Also high on PCG's list was the importance of continued
funding for Step 2 and availability of generic certificates to help keep U.S.
cotton competitive and moving to market.
PCG's stance on the loan makes up the first of a three-part program to achieve
an overall level of support for cotton of not less than 80 cents per pound. The
other key parts of the plan include development of a counter-cyclical support
mechanism similar to the Target Price system used in the 1990 Farm Bill.
Payments under the PCG version of the Target Price mechanism would be coupled
to planting and paid based on modified payment yields reflecting the higher of
a grower's current APH or the frozen 1985 payment yield used today. The third
and last part of the safety net structure would be comprised of a fixed
AMTA-style de-coupled payment in the 7-9 cent per pound range.
PCG also discussed the idea of developing a short-term, Resource Conservation
Program that would allow producers to voluntarily set-aside less productive or
higher-cost acreage in exchange for a payment based on a 1-3 year contract.
Getting into the halls of Government is usually not much of a problem; actually
talking to the key Senate, House and Administration officials that sway the
development of key legislation is typically a little bit harder.
For Plains Cotton Growers the ability to talk to key decision-makers played a
pivotal role in making sure the situation of cotton producers on the High
Plains, and production agriculture in general, was communicated clearly. The
ability to open a two-way dialogue also provided PCG the opportunity to put
forth a number of potential solutions and see many of them carried forward.
PCG officers, Ronnie Hopper of Petersburg, Rickey Bearden of Plains and Mark
Williams of Farwell, along with PCG Executive Vice President Steve Verett,
talked about the needs of High Plains cotton producers to the people that
ultimately decided if the Farm Bill process would completed in time to help
producers in 2002.
Key points of the message delivered included reemphasizing the critical nature
of the situation and the potential effects it will have on grower financing in
2002; encouraging the quick completion of a Senate Farm Bill package; and the
need to construct a bi-partisan Bill that could go to Conference with the House
passed Farm Security Act of 2001.
Lubbock based Plains Cotton Growers, Inc. took a bold step to crank up its
effort to get a farm bill in place in 2002.
PCG's Executive Committee, under the leadership of the organization's president
Ronnie Hopper, voted unanimously to enhance grower representation and presence
in the nation's capitol during the Fall of 2001. The group engaged former Texas
Lt. Governor Ben Barnes, and his firm Entrecorp, to help represent cotton
producers, especially those in West Texas, to members of the U.S. Senate and
its Agriculture Committee.
One of the most underrated elements of the new Farm Bill has been the provision
that allows growers the option to update program payment yields used for making
Counter-cyclical program payments.
For veteran farm program participants the ability to choose the highest yield
is believed to be a first-time occurrence. In past farm bills when program
payments were tinkered with and payment yields updated it was a take it or
leave it proposition. Either the producer took the updated payment yield, for
better or worse, or they decided not to participate in the program at all.
The Farm Security and Rural Investment Act of 2002 provides this unprecedented
option to growers. For the first time producers will either be able to select
the highest possible yield for use in making their counter-cyclical payments.
Any way you cut it this freedom is something producers have never had before
and will have a tremendous positive impact for all producers.
Final Product Very Similar to PCG
Recommendations
One of the greatest testaments to PCG's ability to communicate High Plains
needs is the fact that so many of the ideas advanced by the organization found
their way into the final product.
Key parts of the Farm Security and Rural Investment Act that will strengthen
the safety net for growers include the retention of the marketing loan ( with
generic certificates), inclusion of a fixed decoupled payment and the return of
the Counter-cyclical payment structure.
Altogether this provides a three-tiered safety net that provides a guaranteed
amount of support when prices fall below pre-determined trigger levels.
Implementation
PCG has been continuously monitoring the activity surrounding implementation of
the Farm Security and Rural Investment Act of 2002. PCG activities have included
making recommendations, reviewing and commenting on proposed rules and
attending Farm Service Agency training sessions to better understand the
procedures that will be employed during sign-up and delivery of the new
program.
After several months of discussions and numerous conversations with USDA staff
and the staff of the House Agriculture Committee, PCG is pleased to report that
its efforts, and the efforts of many others, USDA has modified the procedures
for including substitute yield that can be used when actual yields fall below
75% of the 1998-2001 County average yield. The yield plug is used when figuring
updated counter-cyclical payment yields.
PCG's position on the issue was that USDA's original rule did not fully take
into account the differences in production practices that often exist under a
single farm serial number and the fact that farms can often be listed under a
single farm serial number, but not be physically located near one another.
These differences, it was argued, should allow growers who have adequate
production records to differentiate between farms on the basis of production
practice and/or location should be allowed to utilize the yield plug procedure
on a field by field.
Apparently USDA listened to PCG's argument as well and this week sent out
updated instructions allowing producers to include either a dryland or
irrigated yield plug when the actual yield for either production practice falls
below the 75% County average threshold.
The process will require producers to provide adequate records of the
production by each practice on the farm and for the County FSA personnel to
manually replace the actual production under the practice with the appropriate
yield plug. In FSA terminology the yield plug is referred to as either the
dryland or irrigated minimum production figure.
Pesticide Labeling and Regulation
Making the best and safest tools available for producers has always been a goal
of PCG in its dealings with the Environmental Protection Agency and other
regulatory agencies with jurisdiction over pesticides and pesticide issues.
In recent years PCG supported efforts to obtain emergency labeling for a number
of products on behalf of cotton producers. Furadan¨ 4F, for late
season aphid control, and Pirate¨, for beet armyworm control, are two that
readily come to mind.
This was not the first time PCG has stepped up to gain the availability of a
much needed new product. In 1992 PCG played the central role in preparing the
Section 18 request for Baytan¨ 30 Flowable Fungicide, a product now
commonly used to treat planting seed for protection against Thielaviopsis
basicola, (Black Root
Rot).
Eliminating Burdensome
Regulations
PCG played a pivotal role in helping eliminate the requirement that cotton gins
separate gin trash from Furadan¨ treated cotton fields.