A bill to update the upland cotton allotment system.

Amends the Agricultural Act of 1949 to specify a new formula for prevented planting disaster payments to cotton producers. Requires such payment on the smaller of (1) the acreage intended to be planted to cotton, or (2) the acreage planted to cotton for harvest (including any acreage which the producers were prevented from planting to cotton or other nonconserving crop in lieu of cotton) in the immediately preceding year multiplied by 75 percent of the program yield established by the Secretary of Agriculture for the farm for the current year times a payment rate equal to 33 1/3 percent of the established price for the crop. Specifies a new formula for cotton farm disaster payments, such that, when the total quantity of cotton producers can harvest on a farm is less than the product of 75 percent of the established program yield times the acreage planted to harvest, the payment rate shall be 33 1/3 percent of the established price for the crop for the deficiency below 75 percent for the crop. States that compensation for disaster losses shall not be regarded as price support payments.

Directs the Secretary to establish a national program acreage for each of the 1978 through 1981 crops of upland cotton. States that the national program acreage shall be the number of harvested acres the Secretary determines ( on the basis of the estimated weighted national average of the farm program yields for the crop for which the determination is made) will produce the quantity (less imports) that the Secretary estimates will be utilized domestically and for export during the marketing year for such crop.

Requires the Secretary to determine for each crop of upland cotton a program allocation factor (not to exceed 100 percent) by dividing the national program acreage for the crop by the number of acres which the Secretary estimates will be harvested from such crop.

States that the individual farm program acreage for each crop of upland cotton shall be the product of the allocation factor times the acreage of cotton planted for harvest on the farms for which individual farm program acreages are required to be determined. States that the farm program yield for the farm for any year shall be determined on the basis of the actual yields per harvested acre on the farm for the preceding three years.

Changes the formula basis of the acreage set-aside program from farm base acreage allotment to acreage actually planted to upland cotton on the farm in the year for which the set-aside requirement is established. Permits the Secretary to limit the acreage planted to cotton on farms by establishing a factor which shall be multiplied by the highest acreage planted to cotton on the farm (including any acreage not planted to cotton because of natural disaster or other condition beyond the control of the producers) in any one of the preceding five years. Declares ineligible for cotton loans or payments with respect to a particular farm producers who knowingly plant cotton in excess of the permitted cotton acreage for such farm.

Changes the standard measure for loan levels from "Middling one inch" to "Strict Low Middling one and one-sixteenth inches." Extends through the 1981 crop the reconstitution of farms and the Adjustment Act of 1938 and the definition of cooperator in the Agricultural Act of 1949, as amended.