United States Department of Agriculture published a final rule Nov. 2, governing operation of the cottonseed assistance program for the 2000 crop of cottonseed (Upland and Pima). Section 204(e) of the Agricultural Risk Protection Act of 2000 directs the Secretary of Agriculture to use $100 million of Commodity Credit Corporation (CCC) funds to provide assistance to producers and first handlers of the 2000 cottonseed crop.

"As that program seems to have been successful in accomplishing its intended goals and there is no indication that Congress was dissatisfied with the prior program," the rule language states, "it has been decided to operate the new program in the same manner as the old."

The major provisions of the 2000 program are as follows. The CCC will announce a period during which U.S. cotton gins may apply for cottonseed payments. To participate, the gin must complete an application form providing (1) applicant name, address, contact person, etc.; (2) bank account information for direct deposit; (3) the gin's five-digit identification code; (4) the number of bales ginned from the 2000 crop; and (5) the weight in pounds of cotton ginned.

At the close of the application period, CCC will estimate the total quantity eligible for payment and calculate a national payment rate. Payments to gins will not be subject to limitation. Applicants must agree to share any payment received with the producer "to the extent that the revenue from cottonseed sale is shared with the producer."

Applicant's payment quantity shall be calculated by multiplying the applicant's weight of lint for which payment is requested by the 1995-99 Olympic average of estimated pounds of cottonseed per pound of ginned lint for all domestic ginners. The total payment quantity shall be calculated by multiplying the weight reported by all applicants by the 1995-99 Olympic average of estimated pounds of cottonseed per pound of ginned lint.

According to the National Cottonseed Products Association, USDA currently estimates the 2000 crop of cottonseed at 6.558 million tons, which translates to a payment of approximately $15.25/ton. The 1999 payment rate was 12.23/ton or $4.77/bale.

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