Estimating the Impact of Price Loss Coverage (PLC) for Texas Cotton Producers

Texas is the largest cotton producing state in the U.S., averaging 55% of the planted upland cotton over the last decade. The dropping of cotton as a covered commodity in the 2014 farm bill has had a negative impact on Texas cotton producers and the State economy. The Bipartisan Budget Act of 2018 made seed cotton eligible to participate in federal farm programs other than marketing assistance loans through the Commodity Credit Corporation. This analysis summarizes estimates of how the Price Loss Coverage program would have performed for Texas producers if it had been available since the passage of the 2014 farm bill. Total foregone seed cotton PLC payments from 2014 through 2017 are estimated at $702.6. This was equivalent to $1.4 billion in foregone economic output across the entire Texas economy over the four-year period and up to 2,896 full- and part-time jobs annually. This total contribution includes an $804.8 million contribution to gross regional product and a $533.6 million contribution to labor income across the state.