U.S. cotton growers are in trouble.

Denim is losing ground to stretchy yoga pants and fast-wicking fly fishing shirts made out of synthetic fibers like nylon and Lycra. China is paying its cotton farmers way more than global market value, which has lowered the price. U.S. growers used to rely on Farm Bill payments to make up for such fluctuations, but as a result of a World Trade Organization dispute with Brazil, those payments are gone.

So why has 39-year-old Sinton farmer Jon Gwynn just traded in for a new $700,000 John Deere cotton picker and risked diminishing equity on more seed, fertilizer, and pesticide than ever?

The soils are that good. Rich and black, a gift from El Niño after years of drought.

He’s gambling on quantity, a two-bale-per-acre crop to be exact, something heΆs never achieved. An average crop, he loses money. A bumper crop, he comes out just enough ahead to make it another year.

There is also a loophole in the 2002 Farm Bill that may just be big enough to drive his new green and yellow tractor through. Cotton as a fiber may have lost its federal subsidies, but the cotton as a seed should still qualify— depending on who you ask in Washington, D.C.

At the gin, cotton is separated from the seed and the lint is spun into fabric — none of which is eligible for subsidies from the U.S. Department of Agriculture under the 2014 Farm Bill program. The seed is then crushed for cooking oil and cosmetics and is used as a supplement for cattle feed.

Hence a proposal thatΆs now pitting U.S. Department of Agriculture Secretary Tom Vilsack against House Agriculture Committee Chairman Michael Conaway, a Republican from Texas, which is the nationΆs leader in cotton production:Classify cotton as an “other oilseed,” and it becomes a Farm Bill program crop that like commodities such as corn, soybeans, wheat and dairy is eligible for safety net programs

According to the cotton industry, a precedent for reclassifying a crop was set for that with soybeans under the 2002 Farm Bill, a voluminous five-year spending package that sets policy for agriculture and food stamps. Based on that precedent, cotton industry folks and members of Congress from cotton states like Texas, Georgia, and North Carolina say, Vilsack can fix things for the cotton growers without opening up the 2014 Farm Bill.

Vilsack said he canΆt, because he lacks the legal authority. Conaway and other representatives from cotton growing states, such as Mississippi Republican Trent Kelly says Vilsack can, because he has the legal authority.

“I feel like the whole farm industry of my state depends on your decision,” Kelly told Vilsack during a Feb. 24 hearing of the House Agriculture Committee. “The industry may have intended for cottonseed oil or not intended, but I donΆt care what the industry thinks. What the statutory construction goes to is what Congress thought. ... Mr. Secretary, theyΆve given you the power to do this in the statute as it is written when it says ‘other oilseeds.Ά

“You and I as lawyers understand that you can get to the right decision if you choose to,” Kelly said.

In 2013, the USDA paid out about $8.3 billion to U.S. farmers, $562 million of which went to cotton growers. But that was when cotton prices were high and less was paid out. In 2010, a drought year, cotton growers got about $1.7 billion. Safety net programs outside of crop insurance subsidies are expected to pay out $8.7 billion in 2016 due to super low commodity prices. CottonΆs portion is estimated at about $407 million, mostly in marketing loans.

Gwynn and other growers, such as Matt Huie of Beeville, say that without some solution they could be forced to liquidate in a market where there wonΆt be many buyers. Auctioneers for farmland and equipment are already booked out months ahead in the Texas High Plains, which with more than 3.5 million acres is the largest contiguous cotton patch in the nation.

Cotton has been selling in the 50 to 60 cents-a-pound range. In the old days, payments would have kicked in under a base price of 72 cents. For Huie to make his break-even at 50 cents a pound, he needs to produce 30 to 40 percent more per acre, or about 880 pounds.

“Right now, weΆre looking at like 2,200 acres of cotton,” said Huie, whose operation is headed by a four-way partnership that includes his wife and in-laws. “If I make an average crop IΆm going to lose $225,000 on that cotton. It doesnΆt take long to say ΅Oh crap! This wonΆt work.Ά”

Except the proposed solution is far from a simple fix, said David Orden of the International Food Policy Research Institute, which follows government interventions on a global level.

“This issue of making cottonseed an oilseed and eligible for payments when it has not been in the past is sort of a back door way of reopening the 2014 Farm Bill, and that was a really extensive debate that took place,” Orden said. “ItΆs not like cotton was ignored.”

Cotton was a major issue in 2014 in part because Brazil successfully argued to the WTO that U.S. subsidies were suppressing world prices to the detriment of Brazilian growers, he said.

Axing cotton from the list of program crops was a way of getting Brazil to drop its case.

“That was actually an important victory for the 2014 Farm Bill,” Orden said. “That was a festering case with the WTO that hung over the United States for a long time.”

Had the U.S. not reached an agreement, Brazil would have been able to impose an estimated $295 million in annual sanctions on a long list of U.S. exports, such as cars, pharmaceuticals, and electronics. Sacrificing the U.S. cotton farmer was easier.

Making the oil of cotton seeds a program crop “would really throw up in the faces of the Brazilians and others who objected to our subsidies,” Orden said. Sanctions could be brought back to the table.

While WTO cases are arduous, Orden said he favored the U.S. using it to take on China and India over tinkering with the Farm Bill.

“It would actually be a more productive policy venue from our perspective moving forward,” he said.

Since cottonseed oil is well below the reference price to generate oilseed payments, The USDA estimates it would result in payouts to the tune of $10 billion over the next decade.

“Such a hefty price tag will likely trigger major cuts to conservation expenditures or other farm programs,” said Colin OΆNeil of the Environmental Working Group, which opposes farm subsidies.

“Vilsack points out that cotton farmers and the cotton industry already benefit enormously from a number of USDA programs,” OΆNeil said. “I believe he cited over $2 billion in farm safety net supports and nearly $3.5 billion in credit since 2014. There are marketing loans. So all of those things are available to cotton growers.”

OΆNeil called the Stacked Income Protection Plan (STAX), a subsidized crop insurance program meant to make up for the lost program crop payments, the “Cadillac of crop insurance programs.”

“I think that maybe the cotton industry rather than looking for a new $10 billion handout should be inquiring why STAX adoption has been so low,” OΆNeil said.

The answer is that crop insurance is based on market prices, so when prices are low thereΆs not much incentive for farmers to take out policies, said Steve Verett, executive vice president of Plains Cotton Growers, Inc.

STAX is county based, Verett added, which means nothing to a grower wiped out by a hail storm in a county thatΆs otherwise awash in healthy white tufts.

What farmers want is the bit of stability they had up until the 2014 Farm Bill, Verett said.

“I would say all of us are basically free market folks,” said Huie, the Beeville grower. “The problem is if youΆre competing against other parts of the world that are not free market then youΆre in a real disadvantage.”

Four years ago, a global cotton shortage due to floods and monsoons abroad along with the domestic drought and switch to ethanol-producing corn sent futures prices above $2. ChinaΆs improving economy sent domestic demand soaring and the country began stockpiling.

ChinaΆs now got plenty of cotton, but is still paying farmers about 94 cents a pound in a global market thatΆs paying about 55 to 60 cents, Hui said.

India also is heavily subsidizing growers, and both countries have been able to say they are developing nations that should be able to play by a different set of rules, said Jeff Nunley, executive director of the South Texas Cotton & Grain Association.

“WeΆre the turkey on the table that everybody wants to slice up,” Nunley said.

Growers in the European Union, which is considered developed, likewise are mad.

“Even in France, farmers are driving their tractors in the streets in protest of low commodity prices,” Nunley said.

The reality for U.S. cotton growers right now is “scale up or get out,” Huie said.

The younger ones who arenΆt ready to give up are renting more acres and borrowing as much money as they can to take advantage of the best growing conditions in years. TheyΆre also sticking to cotton because despite the low price, futures contracts show it to be more stable this year than soybeans or corn.

The latest National Cotton Council survey show U.S. cotton producers planning to plant 9.1 million acres this spring, up 6.2 percent from 2015.

“WeΆve had to grow quickly because of smaller margins, and we borrow more to grow quickly because of the smaller margins,” Huie said.

But he said thatΆs not sustainable in row crop agriculture, which anticipates 10-year cycles of ups and downs.

All of the cotton producers Huie and Gwynn know lost equity going from 2015 to 2016, and the estimate is 10 to 20 percent wonΆt survive 2016 without government intervention.

The Farm Bill originated from the Great Depression, Gwynn said, when people knew what it was like to go hungry. During the recent East Coast blizzard, supermarket shelves were cleaned out in a matter of days because shipments couldnΆt get in. Governments subsidize to provide incentives for growers to keep producing food, and in cottonΆs case, food and fiber, to prevent shortages.

“In the years when food was short all the money would go to pay for food, “ Gwynn said of a U.S. without farm subsidies. “And everything else in the economy, cars and clothes and shoes and everything else, you wouldnΆt spend a nickle on that. And then the next year if food was cheap, you would.

“But you have to ask yourself if youΆre a car dealership do you want to go through those fluctuations? No. If you think about spending taxpayer dollars to stabilize an economy, the cheapest place to do it is to stabilize food.”

Lender Mark Miller, CEO of Texas Farm Credit in Robstown, said cotton is a significant part of his portfolio and is considered a specialty crop because of the harvesting equipment and related processes that canΆt be used for anything else.

“I can tell you that the acres in the United States are down almost half what they were, “ Miller said. “And that is playing havoc with the rural communities, the infrastructure thatΆs been developed around that industry.”

And thereΆs a ripple effect.

“A lot of those landlords who own the land that cottonΆs grown on, a lot of them are in San Antonio,” Miller said. “Women whose husbands may have owned the land and are no longer farming and leased land to somebody else. And now the end of the line is evaporating.”

Lubbock is the heart of Texas cotton country, and the Lubbock Chamber of Commerce is among the many urging support for the oilseed plan.

A lot of the market was lost in the wake of the 2011 price hike, said Norma Ritz Johnson, executive vice president of the Chamber.

“You just had some really tough years that youΆre coming off. And then faced with very little of the safety net left from the 2014 Farm Bill changes, thatΆs what makes it tough,” she said.

“A lot of our members, whether itΆs restaurant owners or retailers, really kind of grasp that cotton is such a cornerstone of our West Texas economy,” she said. “At any given time 30 percent of the daily retail and hospitality traffic that you see in and out of Lubbock is outside of Lubbock city limits. ThatΆs one of the things that makes everybody nervous, the kind of effect it will have on our entire economy.”

Bruce Babcock, an economics professor at Iowa State University, said the worrisome scenarios presented by the cotton industry amounted to “standard lobbying practice 101.”

“The United States has the most productive agricultural sector in the world,” he said. “The idea that we are not going to be an agricultural powerhouse in five years, 10 years, 25 years in ludicrous. Individual farmers may go out of business. The farmland wonΆt. And if it does, itΆs because that farmland shouldnΆt be farmed.”

Arguments that cotton farmers going to another crop would only push down the value of that other crop donΆt faze Babcock either.

“So theyΆre going to rely on the government to figure out what to plant and what not to plant? ThatΆs the height of hypocrisy for farm groups to try to get the taxpayer to determine what they should plant and not plant,” he said.

“Frankly it was a pretty innovative proposal for the cotton growers to say, ΅Oh, we produce two crops: one cotton, one cottonseed,Ά” Babcock said. “Kudos for the cotton people to think of that loophole.”

On the fashion front, athleisure wear is hot and workplaces are dressing down, but trend watcher Marshal Cohen, chief industry analyst for the market research company NPD Group, Inc., said cotton isnΆt going away.

“The beauty of cotton is that there is no substitute for it,” he said. “Even with this upturn in the whole athleisure movement and the activewear side of the equation that doesnΆt mean that cotton falls off the map.”

Rather, he said, manufacturers are figuring ways to infuse cotton with the stretch materials to make fabrics even more important to the overall trend.

“So now imagine being able to take the best of both worlds, put them together, and all of a sudden the demand for cotton is still there,” he said. “ItΆs not that cotton has gone away, itΆs just that itΆs not in its purest state; itΆs not in its old-fashioned state.”