| 摘要 | Key Points
As Congress begins debate on the 2018 Farm Bill, the cotton program reforms included in the 2014 Farm Bill are in danger of being reversed.
After successfully convincing Congress to adopt changes in the 2014 Farm Bill to implement the heavily subsidized Stacked Income Protection Plan (STAX) program, the cotton industry has decided that the STAX program must go.
Other reforms should be extended to include elimination of generic base acres either through gradual phaseout or perhaps a one-time buyout based on expected outlays.
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Executive Summary
Among the reforms enacted in the 2014 Farm Bill, few were more significant than the changes made to the suite of federal subsidy programs for cotton. Direct and countercyclical payments were eliminated and replaced by a heavily subsidized supplemental insurance program, the Stacked Income Protection Plan (STAX), a program designed and promoted by the US cotton industry.
Those changes were put in place to resolve a long-standing trade dispute brought by Brazil to the World Trade Organization (WTO) against US cotton price and income support programs. The settlement successfully concluded the dispute and forestalled imposition of substantial damages against US goods and intellectual property that had been awarded to Brazil through WTO arbitration.
Today, the US cotton industry is no longer enamored with the program they once championed. Participation in STAX by US cotton producers has been far lower than anticipated, and the US cotton industry has put forward proposals to make cotton producers again eligible for countercyclical price protection. The proposals have been touted as budget neutral, but given the volatility of cotton prices, budget exposure to large outlays is likely. Moreover, providing support to maintain high production levels in the face of lower market prices leads to market distortions, which only prolong market downturns. Those policies can have detrimental effects on world prices, which penalizes foreign producers, many of those in poor developing regions such as Sub-Saharan Africa. New price-based programs for cotton will also likely reignite trade tensions with Brazil, which could result in another trade dispute with potentially large consequences for US agriculture.
Introduction
The 2014 Farm Bill introduced many significant changes to US farm programs. Direct payments, in place since the 1996 Farm Bill, were eliminated. Countercyclical payments were replaced, and in 2014, for the duration of a new farm bill, producers had to choose between Price Loss Coverage (PLC), a price-based countercyclical program, and Agricultural Risk Coverage (ARC), a revenue-based countercyclical program. Dairy price supports, a primary fixture of dairy policy dating to the 1930s, were eliminated and replaced with an insurance-like program that guaranteed producers a minimum net margin between the price of raw milk and feed costs. In addition, new area-based crop insurance programs were introduced for many crops that provided supplemental coverage to enable farm businesses to recover a portion of the deductible on their underlying insurance coverage for crop losses on their own farms.
Among the reforms enacted in the 2014 Farm Bill, however, few were more significant than the changes made to the suite of federal subsidy programs for cotton. Direct and countercyclical payments for cotton were eliminated, but, in contrast to programs for other crops such as wheat, feed grains, and rice, cotton producers were not eligible for coverage under the new PLC and ARC programs. Instead, cotton producers were given access to a new cotton-specific supplemental crop insurance program, the Stacked Income Protection Plan (STAX). The STAX program, the blueprint for which originated from the cotton industry itself, is generously subsidized by the federal government. The government pays 80 percent of a farm business’ STAX premium costs, which are intended to cover only expected indemnities, and all the administration and other costs associated with the program. Further changes were also introduced to the long-standing cotton marketing assistance loans that tied support prices more closely to world prices.
The changes to the cotton program were due, in part, to the settlement of a long-standing trade dispute brought by Brazil to the World Trade Organization (WTO), in which Brazil had successfully brought charges against the US cotton program arguing that those programs had distorted US production and exports and had depressed world cotton prices. As part of that settlement, Brazil agreed not to challenge US cotton support programs while the 2014 Farm Bill remains in force (that is, until September 30, 2018).1 As a result, total federal levels of support for cotton have fallen to their lowest levels since the United States began reporting domestic levels of support for agricultural commodities to the WTO in 1995.
Yet, as Congress begins debate on the 2018 Farm Bill, the cotton program reforms included in the 2014 Farm Bill are in danger of being reversed. After successfully convincing Congress to adopt changes in the 2014 Farm Bill to implement the heavily subsidized STAX program, the cotton industry has decided that the STAX program must go. Participation in STAX has been low since the program was first offered in 2015. Less than 25 percent of eligible area was enrolled in STAX in 2017 (despite generous payouts to enrollees in 2016), and producers have lobbied for a new Countercyclical Payment Program, which would potentially boost cotton support levels substantially and thus risk igniting another trade dispute at the WTO.
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