Texas Cotton Farmers Seek Improvements to Crop Insurance

May 25, 2023 by

LUBBOCK — On the eve of another drought-ridden growing season, farmers from the High Plains are asking state and national lawmakers to provide a stronger financial safety net.

In Austin and Washington, D.C., farmers from the 41-county High Plains region, which includes Lubbock, are telling representatives that extreme weather and unpredictable markets are straining their businesses. The producers hope the Texas Legislature will tap into funds from the American Rescue Plan Act for a one-time grant by the time lawmakers end their legislative session later this month and that Congress will improve disaster assistance in must-pass legislation known as the Farm Bill.

Farmers around the country are facing growing challenges to their livelihoods, particularly in the face of climate-related disasters. In the Texas High Plains, last year’s drought cost cotton producers more than $2 billion. As farmers are seeing less money in their wallets, inflation is driving up the costs of supplies such as fertilizer, equipment and seeds.

Cotton is an illustrious giant in the Texas agriculture world — 56% of the country’s cotton acres are planted in the Lone Star State, and the High Plains region alone produces 30% of the nation’s cotton and cottonseed. However, the unending financial challenges are beginning to make producers wonder how they can keep growing it.

Shawn Holladay, a fourth-generation cotton farmer in Lamesa, told Washington’s House Committee on Agriculture that the 2018 Farm Bill served the agricultural industry well but needs updates.

“Additional funding is necessary to address challenges, both on the farm and throughout the supply chain,” said Holladay, who is chair of the National Cotton Council.

The Farm Bill is an enormous legislative package that sets the policies for agricultural and food programs, such as federal crop insurance and the Supplemental Nutrition Assistance Program, commonly known as food stamps or SNAP. The Farm Bill is typically renewed every five years, and the 2018 bill cost $428 billion since then. This year’s bill could be the first trillion-dollar farm bill in history. Total spending is projected at $1.51 trillion, with SNAP getting more than 81%, the biggest piece of the pie.

Agriculture advocates hope to see improvements to ad hoc disaster assistance, a program started as a way to lessen the blow when farms have devastating years. Ad hoc assistance is not a permanent program. Congress has to approve of the use of funds and has approved more than $15 billion since 2018. Farmers have to apply for it every time a disaster occurs and are not guaranteed approval when they need assistance or for the amount they need.

David Gibson, chair of the Texas Agriculture Council, grows corn in Lubbock. The crop was yet another that suffered last year statewide — corn production was at its lowest since 2011.

Gibson said another issue is that the ad hoc assistance is available only after farms have been dealt critical blows. After three years of rising supply costs, unstable markets and weather disasters on the farm, it’s now more realistic to assume the assistance will be needed and make it available on a permanent basis, instead of taking a wait-and-see approach.

“There’s not a real provision in the Farm Bill, as of today, to keep growers in business,” said Gibson, who is also executive director of Texas Corn Producers. “Not make money, but just keep them in business.”

During Holladay’s testimony in Congress, he said his wife and daughter were working on the farms while he was away. Holladay said ad hoc assistance helps but isn’t reliable enough for how crucial it is.

“We needed it and we’re grateful to have it, but it wasn’t a risk-management tool,” Holladay testified. “We need something we can bank on that is predictable and can be leaned on in case problems arise, not after the fact.”

Holladay wasn’t the only farmer who experienced a downfall last year. With dry, cracked land surrounding the High Plains, cotton producers had to abandon more than 72% of their planted acres, according to the nonprofit organization Plains Cotton Growers.

Kody Bessent, the group’s CEO, said last year was one of the harshest growing seasons in recent times for the cotton industry. He would like to see improvements to crop insurance — a cornerstone of the Farm Bill that has helped many farmers stay in business.

“That way, we don’t have to continuously rely upon the amount of ad hoc assistance like we’ve seen in the last three years,” Bessent said.

The nonprofit organization, which represents cotton producers in the region, has also brought these concerns to state lawmakers. Bessent and other agricultural leaders are advocating for a one-time disaster relief grant from the Texas Legislature, proposed by state Sen. Charles Perry, a Lubbock Republican.

The grant would use money from the COVID-19 pandemic funds and has the support of agriculture organizations from 56 counties in Texas. House and Senate negotiators are still considering the grant as they work toward a compromise budget bill to put before the full Legislature for a vote, expected next week.

According to an analysis by the American Farm Bureau Federation, Texas suffered over $6.4 billion in crop losses from weather disasters last year — more than any other state. Cotton accounted for most of that, losing about $2.9 billion in damage.

In a letter to the Legislature signed by various cotton organizations and nonprofits, the groups specify that the grant would not make the businesses profitable, but instead would provide the cash flow needed to keep workers employed and businesses operating.

According to the National Oceanic and Atmospheric Administration’s seasonal drought outlook, the drought will continue to plague the state, and particularly the High Plains, this year.

Disclosure: Texas Agriculture Council has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2023/05/19/farm-bill-texas-cotton-climate-insurance/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Photo: Cotton Drought