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Cotton is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus Gossypium in the mallow family Malvaceae. The fiber is almost pure cellulose, and can contain minor percentages of waxes, fats, pectins, and water. Under natural conditions, the cotton bolls will increase the dispersal of the seeds.
A cotton gin—meaning "cotton engine"—is a machine that quickly and easily separates cotton fibers from their seeds, enabling much greater productivity than manual cotton separation. The fibers are then processed into various cotton goods such as calico, while any undamaged cotton is used largely for textiles like clothing. The separated seeds may be used to grow more cotton or to produce cottonseed oil.
The Agricultural Adjustment Act (AAA) was a United States federal law of the New Deal era designed to boost agricultural prices by reducing surpluses. The government bought livestock for slaughter and paid farmers subsidies not to plant on part of their land. The money for these subsidies was generated through an exclusive tax on companies which processed farm products. The Act created a new agency, the Agricultural Adjustment Administration, also called "AAA" (1933-1942), an agency of the U.S. Department of Agriculture, to oversee the distribution of the subsidies. The Agriculture Marketing Act, which established the Federal Farm Board in 1929, was seen as an important precursor to this act. The AAA, along with other New Deal programs, represented the federal government's first substantial effort to address economic welfare in the United States.
An agricultural subsidy is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.
The money market is a component of the economy that provides short-term funds. The money market deals in short-term loans, generally for a period of a year or less.
The domestic slave trade, also known as the Second Middle Passage and the interregional slave trade, was the term for the domestic trade of enslaved people within the United States that reallocated slaves across states during the Antebellum period. It was most significant after 1808, when the importation of slaves was prohibited. Historians estimate that one million slaves were taken in a forced migration from the Upper South, primarily Maryland and Virginia, to the territories and then new states of the Deep South: Georgia, Alabama, Florida, Louisiana, Mississippi, Arkansas, and Texas.
The Federal Agriculture Improvement and Reform Act of 1996, known informally as the Freedom to Farm Act, the FAIR Act, or the 1996 U.S. Farm Bill, was the omnibus 1996 farm bill that, among other provisions, revises and simplifies direct payment programs for crops and eliminates milk price supports through direct government purchases.
Gossypium barbadense, also known as South American cotton, is one of several species of cotton. It is in the mallow family. It has been cultivated since antiquity, but has been especially prized since a form with particularly long fibers was developed in the 1800s. Other names associated with this species include sea island, Egyptian, Pima, and extra-long staple (ELS) cotton.
A staple fiber is a textile fiber of discrete length. The opposite is a filament fiber, which comes in continuous lengths. Staple length is a characteristic fiber length of a sample of staple fibers. It is an essential criterion in yarn spinning aids in cohesion and twisting. Compared to synthetic fibers, natural fibers tend to have different and shorter lengths. The quality of natural fibers like cotton is categorized on staple length such as short, medium, long-staple and, extra long. Gossypium barbadense, one of several cotton species, produces extra-long staple fibers. The staple fibers may be obtained from natural and synthetic sources. In the case of synthetics and blends, the filament yarns are cut to a predetermined length.
In the United States, the farm bill is the primary agricultural and food policy instrument of the federal government. Every five years, Congress deals with the renewal and revision of the comprehensive omnibus bill.
In the United States, the Acreage Reduction Program (ARP) is a no-longer-authorized annual cropland retirement program for wheat, feed grains, cotton, or rice in which farmers participating in the commodity programs were mandated to idle a crop-specific, nationally set portion of their base acreage during years of surplus. The idled acreage was devoted to a conserving use. The goal was to reduce supplies, thereby raising market prices. Additionally, idled acres did not earn deficiency payments, thus reducing commodity program costs. ARP was criticized for diminishing the U.S. competitive position in export markets. The 1996 farm bill did not reauthorize ARPs. ARP differed from a set-aside program in that under a set-aside program reductions were based upon current year plantings, and did not require farmers to reduce their plantings of a specific crop.
In United States federal agricultural policy, the term commodity programs is usually meant to include the commodity price and income support programs administered by the Farm Service Agency and financed by the Commodity Credit Corporation (CCC). The commodities now receiving support are:
- those receiving Direct and Counter-cyclical Program (DCP) payments, specifically wheat, corn, grain sorghum, barley, oats, upland cotton, rice, soybeans and other oilseeds, and peanuts;
- those eligible for nonrecourse marketing assistance loans, which includes the previous mentioned commodities plus wool, mohair, honey, dry peas, lentils, and small chickpeas; and
- those having other unique support, including sugar, and milk.
The Extra-Long Staple Cotton Act of 1983 eliminated marketing quotas and allotments for extra-long staple cotton and tied its support to upland cotton through a formula that set the nonrecourse loan rate at not less than 150% of the upland cotton loan level. The act amended the Agricultural Act of 1949 to set forth new Extra-Long Staple cotton program provisions and Agriculture and Food Act of 1981 to add Extra-Long Staple cotton to the $50,000 payment limitation for the payments which a person received under commodity programs. The act was sponsored by Kika de la Garza.
The Food Security Act of 1985, a 5-year omnibus farm bill, allowed lower commodity price and income supports and established a dairy herd buyout program. This 1985 farm bill made changes in a variety of other USDA programs. Several enduring conservation programs were created, including sodbuster, swampbuster, and the Conservation Reserve Program.
The Direct and Counter-cyclical Payment Program (DCP) of the USDA provides payments to eligible producers on farms enrolled for the 2002 through 2007 crop years. There are two types of DCP payments – direct payments and counter-cyclical payments. Both are computed using the base acres and payment yields established for the farm. DCP was authorized by the 2002 Farm Bill and is administered by the Farm Service Agency (FSA).
A poundage quota, also called a marketing quota, is a quantitative limit on the amount of a commodity that can be marketed under the provisions of a permanent law. Once a common feature of price support programs, this supply control mechanism ended with the quota buyouts for peanuts in 2002 and tobacco in 2004.
The 2002 farm bill replaced the longtime (65-year) support program for peanuts with a framework identical in structure to the program for the so-called covered commodities. The three components of the Peanut Price Support Program are fixed direct payments, counter-cyclical payments, and marketing assistance loans or loan deficiency payments (LDPs). The peanut poundage quota and the two-tiered pricing features of the old program were repealed. Only historic peanut producers are eligible for the Direct and Counter-cyclical Program (DCP). All current production is eligible for marketing assistance loans and LDPs. Previous owners of peanut quota were compensated through a buy-out program at a rate of 55¢/lb. ($1,100/ton) over a 5-year period.
In United States agricultural policy, a marketing loan repayment provision is a loan settlement provision, first authorized by the Food Security Act of 1985, that allowed producers to repay nonrecourse loans at less than the announced loan rates whenever the world price or loan repayment rate for the commodity were less than the loan rate. Marketing loan provisions became mandatory for soybeans and other oilseeds, upland cotton, and rice and were permitted for wheat, corn, grain sorghum, barley, oats, and honey under amendments made by the 1990 farm bill. The 1996 farm bill retained the marketing loan provisions for wheat, feed grains, rice, upland cotton, and oilseeds. The 2002 farm bill continued marketing assistance loans and expanded their application to wool, mohair, dry peas, lentils, and small chickpeas.
Marketing assistance loans are nonrecourse loans made available to producers of loan commodities under the 2002 farm bill. The new law largely continued the commodity loan programs as they were under previous law. Loan rate caps are specified in the law. Marketing loan repayment provisions apply when market prices drop below the loan rates. For farmers who forgo the use of marketing assistance loans, loan deficiency payment (LDP) rules apply.
The incentive payments are direct payments made under the National Wool Act to producers of wool and mohair, which were similar to deficiency payments made to producers of grains and cotton. The incentive payment rate was the percentage needed to bring the national average return to producers up to the annually set national support price. Each producer's direct payment was the payment rate times the market receipts. Producers with higher market receipts got larger support payments. This created an incentive to increase output and to improve quality.
References
- Farm Security And Rural Investment Act 2002
- Loan Commodities, Adam Rosen, 2017
This article incorporates public domain material from Jasper Womach. Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition (PDF). Congressional Research Service.
