ABSTRACT

The Farm Security and Rural Investment Act of 2002 is considerably different and more complex than previous programs. The new farm bill provides combined payments that add up to a stated safety net target price of 72.4 cents per pound for upland cotton. The provisions, however, are segmented and designed to maintain market-oriented features of past programs. The target price is basically used in calculating other possible payments. Because most program payment components are affected by market price levels, producers will need to become skillful market observers and rely heavily on pricing and "hedging" strategies to enhance income.