Advances in Cotton Board Compliance

By: Randy Riales, Director of Compliance, The Cotton Board

These uncertain times have changed the way a lot of us do things. I for one am working from home for the first time, but The Cotton Board Compliance team has quickly adjusted to this “new normal” and continues to do our part to help move The Cotton Board forward in its mission.

My role with The Cotton Board involves overseeing the collection of assessment fees for The Cotton Research and Promotion Program and ensuring compliance. The Cotton Board Compliance staff that came before me developed many of the methods that we still use today to effectively receive and track assessments by comparing bales ginned to producer assessments received. Members of our Compliance team often remind me of the days when they had tall stacks of paper reports to manually input. There was a lot more field work then, and many miles were driven to get ginner and collecting handler reports. Even though they didn’t have the technology we have today, they helped build the solid foundation that has led to The Cotton Board’s stellar compliance track record.

In 1990, there were two significant changes in assessment fee collections and compliance for The Cotton Board. First, producers voted to change the Cotton Research and Promotion Program assessment fees from voluntary to mandatory.  The producer assessment rate was set $1 a bale plus ½ of one percent of the price of the cotton, the same rate that is in effect today. That same year, an amendment to the Cotton Research & Promotion Act of 1966 expanded the Program to include collecting assessments on the cotton content of imported apparel and other products. The importer assessment rate is equal to the producer assessment at a dollar a bale for cotton and cotton-containing products, plus a supplemental assessment that is equal to the weighted average price received by the producer for the previous year.

On the producer level, the first buyer of the cotton is responsible for collecting and remitting the assessment fees. The buyer is often referred to as the “first handler” or “collecting handler.” Collecting handlers may be individuals, gins, cooperative marketing associations, cotton shippers, or any person that accepts a bale of cotton from the producer under an agreement providing for the marketing of the cotton. For importers, U.S. Customs and Border Protection collects and wires the assessment fee collections to The Cotton Board, and they submit a report monthly of all import activity for cotton.

In the past few years, The Cotton Board Compliance department has teamed up with the Information Technology (I.T.) team to advance the use of electronic reporting. The Cotton Board developed a fast, user- friendly electronic reporting system that was released this past year. The new system helps us be more efficient and effective and has drastically reduced the number of paper reports we receive. Collecting handlers can now electronically and securely submit their monthly reports, which contain the producer name, address, bales, assessments, crop year and gin used.  Cotton ginners can electronically submit their End-of-Season ginning report that details the producer name, address, and numbers of bales ginned. We send monthly reminders, make phones calls and if necessary, make field visits to facilitate compliance.

Another helpful addition of technology in compliance was the development of an application by our I.T. team that electronically houses all collecting handler and ginning report information into a database. The application allows us the option to run a multitude of reports and can break the information down to a state level, county level, gin level and producer level.

As we go forward in this new crop year, I am hopeful that the new technology put in place will be beneficial to all.

Be safe.