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Independent Evaluation Shows Cotton Research and Promotion Program to be Beneficial to Cotton Producers and Importers

June 6th, 2017

Third Party Review Shows Strong Returns to Program Stakeholders

(MEMPHIS, TN) - The 1996 Farm Bill requires the Cotton Research & Promotion Program (the Program) conduct an independent, third-party evaluation of the Program’s effectiveness every five years. The most recently executed evaluation reflected very well on the Program’s effectiveness. In summary, the analysis found strong, positive returns to cotton producers and importers as a result of the Program. Some of the most significant findings from the preliminary report are listed below. Over the life of the Program -- 

  • Producer revenues are up $175 million annually, on average, or 3.2%.
  • Annual farm program costs have been reduced$168.4 million, on average.
  • The return on investment (ROI) for cotton producers and governmentis 7 to 1.
  • Program generates a benefit-cost ratio of 3.6 for Producers.
  • Importer after-tax profits increased by $732.9 million on average.
  • Importer benefit-cost ratio is 14.0 over the life of the Program.
  • Increase in Importer sales revenue as a percentage of historical retail revenue is 12%.

 "The report concludes that the Program has enhanced cotton demand, augmented U.S. cotton yields and production over time, generated a positive return to both cotton producers and importers, and reduced the dependence of cotton producers on government farm programs,” said Janet Ydavoy, current Cotton Board Chairman and cotton importer.

“We believe this is a very positive report and is a strong objective measure of the returns generated by the Program,” said Ydavoy.

To conduct the evaluation The Cotton Board contracted with Forecasting & Business Analytics,LLC; a firm that has significant experience in analyzing check-off programs.  After two months of analytical work, both a draft written report and an oral summary were delivered to the Cotton Board. The report has been peer-reviewed and approved by USDA. To view the full report please visit the Cotton Board’s Web site, www.cottonboard.org, and look under the “About” tab.          

 oOo

Contact: Stacey Gorman, Director of Communications, 901-233-9356, sgorman [at] cottonboard [dot] org

About the Cotton Board: The Cotton Research & Promotion Act established the Cotton Board as a quasi-governmental, non-profit entity to serve as the administrator of the Cotton Research & Promotion Program. Funded by America’s cotton producers and importers through the cotton check-off, the Program’s research and promotion activities are conducted worldwide by Cotton Incorporated, the Cotton Board’s sole-source contracting organization, to increase the demand for and improve the market position of cotton. The Cotton Research & Promotion Program continues to work in all areas of cotton’s pipeline – from the field to the consumer – to keep cotton the number one fiber choice in the U.S. For more information about the Cotton Board and the innovative activities stemming from the Program, visit www.cottonboard.org.

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