By Don Shurley, Extension Economist, University of Georgia

The new Farm Bill has been signed into law. Here are some of the provisions that are directly related to cotton or will impact cotton:

The DCP are ACRE programs are eliminated.

Cotton will have a new “safety net” program called STAX (Stacked Income Protection Plan) beginning with the 2015 crop year.

All other covered commodities (corn, peanuts, soybeans, wheat, etc.) will have Price Loss Protection (PLC) or Agricultural Risk Coverage (ARC) beginning with the 2014 crop year.

Producers will have a 1-time opportunity to elect PLC or ARC on a farm by farm, crop by crop basis. If choosing ARC, producers must then also choose between County Coverage or Individual Coverage.

Because STAX will not be available until 2015, cotton will receive a “transition assistance” payment for 2014. The Act does not specify the amount of the payment but does define how the payment is to be calculated. That definition and the resulting calculation is 9 cents per lb. The payment will be received on 60% of Base Acres.

The Marketing Loan program including LDPΆs and MLGΆs continues to operate as it has under the 2008 farm bill. The Loan Rate on cotton is changed, however. The Loan Rate will be the average Adjusted World Price (AWP) for the previous 2 crop years but not more than 52 cents/lb and not less than 45 cents/lb.

Producers will have opportunity/may elect to update or “reallocate” crop bases on a farm. Cotton base is retained–but all other crop bases may be updated based on the 4-year (2009-2012) average of acres planted.

Landowners will have opportunity to update payment yields. This yield will be used for PLC if the PLC option is elected. The yield update may be on a crop by crop basis. The updated yield would be 90% of the average yield per planted acre for the 5-years 2008-2012.