Friday, April 26, 2013

How does it stack up: STAX, WTO and Cotton

Although the Farmer I Kiss raises some wheat and milo in order to rotate the land from cotton every two to four years, these crops are planted mainly for their foliage that can be incorporated into the topsoil.  They are not his primary focus, because at the end of the day, no matter which crop is in the field, he is a cotton farmer. 
A Cotton Rose by any other name would still smell as sweet.

Cotton Organizations

One of the things that comes with being a cotton farmer are the great cotton organizations that exist across the southern states.  One of the best is the National Cotton Council, (NCC) who "serves as the central forum for consensus-building among producers, ginners, warehousers, merchants, cottonseed processors/dealers, cooperatives and textile manufacturers. The organization is the unifying force in working with the government to ensure that cotton's interests are considered."   The regional organization here is the Southern Rolling Plains Cotton Growers, (SRPCG) who are members along with other regional groups of the Texas Cotton Producers, Inc. (TCP)  Our very good friend and fellow Concho Valley cotton farmer is currently the president of  TCP.   These organizations have spent the past couple of years developing a program for cotton producers called STAX, Stacked Income Protection Plan for Upland Cotton.

STAX and the WTO

STAX is an additional crop insurance product that can be purchased in addition to the regular crop insurance policy.  It helps to cover the large deductibles that the regular crop insurance policy has and works as an area-wide type of a product instead of basing coverage on a farmers individual operation and yields.  Many of the aspects of the STAX program were developed to answer the issues that are unique to cotton due to a World Trade Organization dispute that Brazil raised against features of the U. S. cotton program.  In March, the Delta Farm Press stated, "Besides providing a much-needed safety net for an industry that is reeling from a greater-than-50-percent reduction in cotton prices over the last two years, policymakers also face the challenge of ultimately settling the WTO case filed by the government of Brazil nearly a decade ago."

Direct Payments Eliminated

The STAX program has been embraced by most policymakers who are involved in creating the new Farm Bill currently being put together in Washington, D. C. As it was originally designed, STAX in combination with the elimination of direct payments, SURE disaster program and counter-cyclical payments would reduce spending in the cotton program by an estimated 46%, a number that is much greater than many other commodities are proposing for their spending reductions.

Strong Safety Net

The supply of food and fiber are a vital part of our national security.  The natural disasters of the past two years have brought our food and fiber supply under attack, reenforcing the need for a strong, stable and affordable safety net with crop insurance serving as it's backbone.  As the new Farm Bill looks to eliminate most of cotton's program funds, support for the STAX program as an affordable option for the portion of their risks that currently have no coverage is basically unanimous among cotton producers across the cotton belt.   Organizations like the NCC, SRPCG and TCP are working hard to represent the cotton farmers, like the one I Kiss, from all across the cotton belt as our policymakers develop a Farm Bill that will have sweeping changes and much needed spending reductions.