Administration Budget Proposal Sparks Unified Industry Reaction

Friday, February 11, 2005                          By Shawn Wade

      As should be expected, therewas a strong reaction by farmers to the Bush Administration’s FY06 Budgetproposal that included some very specific and, some might contend,unprecedented legislative changes to the current Farm Bill in order to achievea targeted savings of $587 million per year and $5.7 Billion over the next tenyears.

      Fortunately the BushAdministration’s Ag spending proposal is just that – a proposal. Congress willultimately decide when, why and how deep to cut FY06 spending to deal with theclimbing budget deficit.

      Plains Cotton Growers and theNational Cotton Council are prepared for the task at hand and are alreadyworking at the Congressional level to tell cotton and agriculture’s story andto prevent alteration of the current farm program in mid-stream and outside ofa formal Farm Bill debate process.

      Where the Administrationproposal goes from here will be up to Congress to decide. Budget Committeesfrom the House and Senate have until April 15 to develop the FY06 BudgetResolution that will provide the structure for development of future FY06spending measures.

      If the House and Senate donot agree on a joint budget resolution by April 15 the responsibility forfinding and implementing cuts shifts to the specific authorizing committees whowill have the ability to seek the necessary spending reductions withoutspecific instructions detailing how the savings will be achieved.

      Short-term goals for theindustry during this process will be to ensure that agriculture is asked to donothing more than its fair share in the budget reconciliation process.

      The industry will also, tothe maximum extent possible, work to ensure the House and Senate AgricultureCommittees, who are in the best position to develop fair and reasonablespending recommendations, are not shackled by an overly restrictive set ofbudget instructions.

      “The 2002 Farm Bill hasperformed exceptionally well and has actually spent $17 Billion less in thefirst three years than original projections indicated,” says PCG Executive VicePresident Steve Verett. “We believe the significant budget savings realizedduring its’ first three years of operation are a result of the fiscallyresponsible structure it uses to provide a safety net for U.S. agriculture whenconditions warrant.”

      After completion of theinitial phases of the budget reconciliation process, the industry will continueto work to prevent any changes that unfairly impact individual cotton producersfrom unwise and unnecessary changes to the current Farm Program.

      Growers who wish tofamiliarize themselves with the information being used by the industry toeducate Congress on the adverse impact of the Bush proposals and provideindividual input to their Congressman and Senators about this issue areencouraged to do so.

      The National Cotton Councilhas developed an excellent set of informational pieces that can be found ontheir web site ( The information will also be made available on the PlainsCotton Growers website at:


Second 2004 Partial CC Payment Announced

Friday, February 11, 2005                          By Shawn Wade

      Questions about the timing ofthe next 2004 Advance Counter-cyclical (CC) payment were answered today withthe announcement of payment rates for the second partial 2004 CC payment by theUSDA Farm Service Agency.

      For cotton the announcementconfirmed speculation that the 2004 Counter-cyclical payment rate estimatewould remain at the maximum 13.73-cent rate allowed by the 2002 Farm Bill.

      Based on that determinationcotton producers requesting the second partial payment will be eligible toreceive 70 percent of the estimated 2004 payment rate, or 9.61 cents per pound,if they did not request the first partial CC payment in October 2004.

      Producers who received thefirst partial CC payment of 4.81 cents will be eligible for an additional 4.8cents through the second partial payment.

      The following table providesthe second partial Counter-cyclical payment rates for eligible program crops asannounced by the Farm Service Agency.





2nd Advance Payment Rate

Payment Rate Less 1st Advance

Upland Cotton (lb)




Corn (bu)




Grain Sorghum (bu)




Peanuts (lb)




Wheat (bu)




Soybeans (bu)




Rice (lb)




Barley (bu)




Oats (bu)




Source: USDA Farm Service Agency


Neugebauer Making Second Run At
Crop Insurance Reform Measure

Friday, February 11, 2005                          By Shawn Wade

      After running out of timeduring the last session of Congress, Lubbock Congressman Randy Neugebauerpromised that his first attempt to increase the scope, availability andeffectiveness of the risk management products available to growers through theFederal Crop Insurance Program would not be his last.

Continued on Page 2

      Making good on that promisethis week, Neugebauer reintroduced the legislation, entitled the RiskManagement Enhancement Act, and says he has been encouraged by the positiveresponse the bill has received among growers in his district and among fellowmembers of Congress.

      Neugebauer’s bill wouldexpand the ability of the Federal Crop Insurance Program to offer additionalrisk protection to growers by allowing them to stack a Group Risk Protectionpolicy on top of an Actual Production History (APH)-based insurance product.

      The stacked GRP coveragewould function the same as a stand-alone GRP insurance policy, but only providecoverage equal to the percentage of the producers APH yield that was notcovered by the underlying APH policy.

      Premiums for the supplementalGRP policy would be calculated using the same percentage used to determine thecoverage.

      For example, underNeugebauer’s proposal a producer who buys a 65 percent coverage levelMulti-Peril Crop Insurance (MPCI) policy could select to buy an additional GRPpolicy that would provide coverage equal to 35 percent (the difference between100 percent of the producer APH yield and the 65 percent coverage level theypurchased) of the total coverage provided through a stand-alone GRP policy. Theproducer would then pay an additional premium for the GRP coverage equal to 35percent of the premium cost of a stand-alone GRP policy.

      Plains Cotton Growersofficials note that cotton producers are supportive of Congressman Neugebauer’sefforts to develop new and innovative crop insurance alternatives.

      “We supported Mr.Neugebauer’s first attempt to get this idea passed during the last Congress,”said PCG Executive Vice President Steve Verett. “We will continue to supportthis legislation and look forward to it being the first step toward expandingthe range of risk management options available to the cotton producers on theTexas High Plains.”


2005 EQIP Sign-up Period Ends March 18

Friday, February 11, 2005                          By Shawn Wade

      Texas USDA Natural ResourceConservation Service official are reminding farmers and ranchers that the 2005Environmental Quality Incentives Program sign-up period will end March 18,2005.

      Anyone interested insubmitting an application for EQIP cost-share benefits on eligible agriculturalland are encouraged to make sure their request in submitted by the close ofbusiness March 18.

      The EQIP program providestechnical and financial assistance to farmers and ranchers who wish to installor implement structural or management practices that solve local and/or statewideconcerns in the areas of water and air quality, wildlife habitat, and treatmentof invasive species.



Last ChancePesticide License CEU Meeting

Feb. 19 -      HockleyCounty CEU Meeting, CEU’s – 5.75,

            8:00a.m., Whiteface Community Building,

            (intersectionof FM 1780 and FM 125 in Hockley County),

            RegistrationCost $20 (includes lunch), Call 894-2406