Cotton EWR Provider System

During the 1995-96 crop year, when electronic cotton receipt systems first began operating on a commercial basis, about 45% of the crop was handled with electronic receipts. Approximately 97% of the crop was represented by electronic receipts by 1999-2000. Currently 99.5% of the cotton receipts issued in the U.S. are electronic.

The current federal warehouse law permits electronic receipts to be issued for virtually any agricultural commodity. At present EWR Inc. handles electronic cotton, grain and peanut receipts.

Electronic Title Description

An electronic warehouse receipt (ewr) is simply a computer record of all of the information which is required on a legal paper receipt. That data record is stored on a secure computer system which has been approved by the U.S. Department of Agriculture as meeting specific operating standards. Electronic receipts are authorized by U.S. federal legislation and represent title documents which are legally equivalent in every way to paper receipts.

The entity which operates the computer system on which electronic receipts are stored is called a "Provider." An electronic receipt system must be highly secure and the Provider has the responsibility for maintaining that integrity. Federal regulations require further security in the form of backup computer systems and an audit trail of all system activity.

The records become legal receipts when stored on the Provider. Within the Provider's computer, each receipt record is associated with a party - the "holder" - who has access to that receipt record. U.S. law requires receipt data can only be given to the Holder. An electronic receipt can have many holders during its existence but can have only one holder at any specific moment. Only the holder can "transfer" the electronic receipts to another holder by transmitting a file via Internet to the Provider's computer system. The Provider sends confirmation of these transactions to the "sending" and the "receiving" holders.

The electronic receipt operation begins when a warehouse creates a file of receipt records. The warehouse is the initial holder. At some point, a shipper-holder will “deliver” its receipts back to the issuing warehouse (who then becomes the holder) along with instructions regarding shipment of the physical commodity. As the warehouse ships the commodity, it sends instructions to the Provider's computer to cancel the appropriate electronic receipts. Based on these directions from the warehouse, the Provider marks the receipt record as cancelled and a legal receipt no longer exists.

The preceding description provides only the most simplistic view of electronic receipts. Complexities can be added to the system to provide for many different situations such as electronic bank drafts. Such added features - when made available by the Provider - increase the value of the electronic receipt system to all of its users.

Certificated Receipts

EWR Inc. works closely with the ICE Futures Exchange which requires certificated cotton receipts. EWR Inc. ensures that certs meet all ICE requirements before they can be issued as electronic receipts. In addition, ICE requires a variety of statistical data on certificated receipts as a group. EWR Inc. compiles this information daily and places it into a data file which ICE retrieves via the Internet. ICE uses the file to develop a variety of reports which it publishes. In some instances ICE requires information on a specific receipt, but U.S. law requires receipt data can only be given to the Holder. In these instances, ICE has to obtain permission from the Holder before EWR Inc. can provide the receipt data. ICE also makes use on occasion of EWR Inc.’s audit log to trace the history of a cotton receipt for a variety of reasons.

International Receipts

In 2015, EWR, Inc. modified the existing Provider system to accept International Cotton Receipts (iewr) to be used with ICE Future’s World Cotton Contract. The modification allows for international cotton warehouses that are holders on the Provider system to issue iewrs.

The iewr is not a legal title of ownership because countries have their own laws and regulations for the distribution of commodities. However, all international warehouses are required to sign a contract with EWR, Inc. to set terms and agreements that pertain to the iewr the warehouse issues on the Provider system.


EWR Inc. has contracts with every entity (including USDA) in the cotton industry which wants to utilize its receipt system. These contracts delineate the obligations of all parties and the remedies available to each. Contracts fall under Tennessee state law because the law is clear that sales tax is not applicable. Copies of the contracts can be made available for review upon request.

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