Funding for the Cotton Economics Research Special Item from the Texas legislature became effective on September 1, 1995, and by the end of 1998/99 fiscal year, the Cotton Economic Research Special-Item has been funded at $133,478 per year for four years. The first biennium (1995/96 - 1996/97) report was produced in September, 1997 (Report No. CER-97-16). This report summarizes the activities and accomplishments in Cotton Economics Research, which is conducted within the Cotton Economics Research Institute at Texas Tech University, during the 1997/98 - 1998/99 biennium. Of the $266,956 funding for the last biennium, $142,547 (53%) was allocated for student assistantships, $80, 686 (30%) for faculty salaries, and $45,723 (17%) for maintenance and operation (supplies, travel, equipment, etc.). A total of eight research projects were funded with the Special Item funding for the last biennium. Another thirteen externally-funded projects were initiated during the same time period. Each of the projects, both internally and externally funded, is summarized in the attached progress reports (Appendix A). These research activities covered diverse subject-matter areas, including production inputs and costs, production management practices, harvesting costs, ginning performance and costs, ginning by-products, marketing and pricing, industry structural relationships, and textile processing costs as they relate to Texas cotton.