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.

It will be a circus without the safety net: Crop Insurance under attack

Family Farmer: The Next Generation

The Farmer I Kissed is one of my clients.  You see, I am not only a farmer kisser, I am a crop insurance agent.  I have been in this business for 20 years.  In all those years, 2011 was the most hectic time I have ever experienced.  100% of my clients had losses, and most of those were total losses.  The majority of my clients are dryland cotton farmers, just like Daniel and I.  The seed that they planted in June finally sprouted in September. Until then, they were lying in dry, dry dirt, in the same condition as when they came out of the bag.  With that said, let's visit the Fortune Teller at the circus and imagine yourself in this situation:  Through no fault of your own, you will receive no income for 12 months.  None. 

That's what it was like to be a farmer in Texas last year.  The tight rope broke, and there was no cotton to harvest, no cotton to take to the gin, no cotton to sell to the merchant.  Enter, the safety net:  Crop Insurance.  Crop insurance is not like you homeowners insurance, where you have a small deductible, say $2500, and if your house burns down, insurance pays for the rest to build you a new house.  The deductibles on a crop insurance policy can be up to 50% of your crop.  That means, in 2011, you would collect 50% of an average crop through an insurance indemnity.  So the tight rope broke, you landed in the safety net, instead of zero you have 50% of your income and at least you are not selling the farm. But you have half your income to meet 100% of your obligations AND somewhere in there you have to prepare for next year's crop.  Land leases don't stop just because there was no crop produced.  Equipment payments don't stop.  The land still has to be cared for, to keep it from eroding, blowing or growing up in weeds.  Thank goodness for that safety net!  It's the only reason the majority of Texas farmers are getting to plant cotton this year!

Family Farmer: The Next Generation

What would happen, if that safety net were taken away?  The land will still be there, food and fiber must still be produced (or we will be hungry and naked pretty fast!) Who could start producing our food and fiber on that land without a safety net?  It wouldn't other family farmers, like the one I kiss.  They would be out of business too.  It would be huge management firms, overseas investors, financial institutions.  We don't want to be in the stands watching that three ring circus.  We MUST keep our family farmers on the land.  Everyone needs to understand, there are many different kinds and sizes of family farmers.  But the key is that they ARE "family farmers" and care deeply about the land and about what they produce for the kitchen tables across this country.

Family Farmer: The Next Generation

Crop insurance is a public-private cooperation.  Private companies deliver a product overseen and regulated by the USDA's Risk Management Agency.  It is a highly successful program that has been duplicated in other countries around the world.  Keeping our food and fiber supply stable and affordable is a matter of national security, so the government aspect is essential.  But right now, an assault is being carried out against the safety net by some of those in Congress that don't realize what would happen if family farmers gave way to the circus.  An assault on the farm safety net is a direct assault on the family farmer.  If amendments being presented are passed, the cuts and limits to crop insurance would cut the wires, leaving the family farmer walking the tight rope without a safety net.  When that happens and we see another 2011 disaster, send in the clowns folks, the circus just hit town.