January, 2003

The Farm Security and Rural Investment Act of 2002 (2002 Act).

There are no Government restrictions on the planting of extra long staple (ELS) cotton. ELS is not a contract commodity under the 2002 Act and is not eligible for direct payments.

Producers may receive marketing assistance loans on all production of ELS cotton. For ELS cotton to be eligible for a marketing assistance loan, producers must comply with applicable conservation and wetland requirements, report their ELS cotton planted acreage, comply with crop insurance requirements, and have beneficial interest in the cotton at the time the loan is requested and throughout the loan period. Further, cotton must be ginned on a roller-type gin, carry an approved USDA Agricultural Marketing Service class, and be placed in a Commodity Credit Corporation (CCC)-approved warehouse. Cotton placed under a marketing assistance loan may be forfeited to CCC when the loan expires in full satisfaction of the loan.

The ELS loan rate under the 2002 Act is specified at 79.77 cents per pound.

Loans are available for a term of 9 months beginning the first day of the month following the month in which the loan is made. Loan extensions beyond 9 months are not authorized. The last date to request a loan on 2002-crop cotton will be May 31, 2003.

The producer must pay interest charges at the time the loan is repaid; the producer is also responsible for all charges accrued at the warehouse. In the event of forfeiture of the loan to CCC, no interest is charged and CCC assumes responsibility for the warehouse storage charges accrued during the period the cotton was under loan. At forfeiture, the producer pays any unpaid receiving charges and any unpaid storage charges outside the loan period.

CCC may sell any cotton in its inventory at any price the Secretary of Agriculture determines will maximize returns to CCC.

Recourse loans are available on ELS seed cotton.

For more information about FSA programs, contact an FSA county office, or visit www.fsa.usda.gov on the Internet.

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (braille, large print, audiotape, etc.) should contact USDA's TARGET Center at 202-720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, Room 326-W, Whitten Building, 1400 Independence Avenue, SW, Washington, D.C., 20250-9410, or call (202) 720-5964 (voice or TDD).

USDA is an equal opportunity provider and employer.