The Hagstrom Report

Agriculture News As It Happens

Nelson: Proof of loss by Sept. 30 critical for disaster aid


Farmers and ranchers who have experienced weather-related losses this year can get federal disaster assistance if they document those losses by Sept. 30, the date the assistance programs expire, Farm Service Agency Administrator Bruce Nelson has told The Hagstrom Report.

“My most important message to pass along today is if you believe you have a loss and are eligible for benefits under any of these programs, head down to your local Farm Service Agency office as soon as possible,” Nelson said, noting that the programs cover crop, livestock, forage honeybee, farm-raised fish and trees. Experienced farmers are familiar with the requirements, but beginning farmers may not be, he added.

Crop producers do not need to harvest or sell their crops by Sept. 30, only document the loss by then to be eligible for benefits under the supplemental agricultural disaster assistance program known as SURE, Nelson said.

Many corn producers won’t have started harvest by Sept. 30, but they will still be covered for potential losses if crop insurance adjusters have filed reports of the crops’ condition, he said. But it’s vital that producers who believe they have losses contact their crop insurance agents or the county office of the Farm Service Agency to make sure the documentation occurs before the expiration date, he added.

“Producers need to be getting a hold of FSA or crop insurance agents as soon as they have a loss,” Nelson said. “Your crop insurance and NAP [noninsured crop disaster assistance program] paper work becomes documentation of losses for SURE.”

Senate Budget Committee Chairman Kent Conrad, D-N.D., in a news release last week praised the decision not to require that crops be harvested by Sept. 30.

"Many farmers were concerned that SURE would not provide assistance for losses that occurred due to wet and cold weather this spring and summer, because the extent of these losses may not be known until after Sept. 30," Conrad said.

"This guidance clarifies that for farmers who suffered a weather event that caused a 10 percent loss on a crop before Sept. 30, the farmer will have to certify that this was the case and the FSA county committee will need to approve it. Once a farmer meets that test, the total revenue loss for the farm will be based on all production, price, and quality losses for all 2011 crops, as is typically the case in the SURE program."

In the 2008 farm bill, Congress set up five disaster programs covering crops, forage, livestock, honeybee, fish and tree farmers. The programs have been described as “permanent” because they were authorized in the farm bill while previous disaster aid programs were passed on an “ad hoc” basis, which meant that Congress had to be convinced to provide the funding at the time of the disaster. But because of budget constraints, the farm bill said that the programs would expire on Sept. 30, 2011.

“This has been a real tough year,” Nelson said, noting the flooding in the Midwest, drought in Oklahoma and Texas ,and the recent hurricane damage in the Southeast and Northeast.

While some farm leaders have criticized the SURE program as complicated and late in paying, Nelson noted that the Agriculture Department has paid out more than $2 billion in benefits under that program for the 2008 crop year and $625 million for the 2009 crop year, with more payments to come. USDA has already paid out hundreds of millions of dollars under the other four programs.

Each of the five programs has its own purpose, rules and application deadlines.

SURE provides assistance to producers suffering crop losses due to natural disasters. A qualifying loss means at least a 10 percent production loss affecting one crop of economic significance due to a disaster on a farm in a disaster county. Producers outside a declared disaster county, but with production losses greater than or equal to 50 percent of the normal production on the farm (expected revenue for all crops on the farm), also qualify for SURE.

Almost all applicants for SURE must have taken out crop insurance or coverage through the noninsured crop disaster assistance program. The exception is for farmers and ranchers who meet the definition of "Socially Disadvantaged," "Limited Resource," or "Beginning Farmer or Rancher.”

The signup for SURE is on a delayed basis because the payments are made in relationship to national average price and production levels and the government cannot determine them until the end of the marketing year.

The SURE signup period for the 2011 crop will not be held until the fall of 2012 but due to the expiration of the program farmers must still be able to document that the losses occurred by Sept. 30, 2011.

Nelson said that crop insurance reports are the usual way to verify the loss, but local FSA offices offer a measurement service for a small fee. Failing either of those, photographs can be used to verify the loss, Nelson said.

FSA Disaster Aid Deadlines
The Livestock Forage Program (LFP) provides compensation to eligible livestock producers who have suffered grazing losses for covered livestock on land that is native or improved pastureland with permanent vegetative cover or is planted specifically for grazing.

After SURE, livestock forage is the biggest program in terms of payments, Nelson noted. Payments go to producers in counties rated by the U.S. Drought Monitor as experiencing severe or extreme drought. The livestock forage program has already paid producers in Texas, Oklahoma, Kansas and Arkansas $150 million this year.

“If your county has drought for a certain period of time, you are eligible,” Nelson noted. “The longer the drought and the more severe you are eligible for more benefits.”

The Livestock Indemnity Program (LIP) provides benefits to producers for livestock deaths in excess of normal mortality caused by adverse weather. This program has already paid out $11 million this year. It has no risk management requirement, but livestock producers are asked to document the loss of animals, usually through photographs, as soon as possible after the deaths occur.

The Tree Assistance Program (TAP) provides financial assistance to qualifying orchardists and nursery tree growers to replant or rehabilitate eligible trees, bushes and vines damaged by natural disasters. Nelson said this program has become more important since the hurricane damage on the East Coast.

“Lots of orchard crops were in states hit by the hurricane,” he said. “Sometimes the damage of these storms isn’t evident right away.”

Producers who have losses on their orchards or forestry crops need to contact the FSA within 90 days of the date the loss becomes apparent, Nelson said. To date, there have been no applications for tree assistance in 2011, he said.

Finally, the Emergency Assistance for Livestock, Honeybees and Farm-raised Fish program (ELAP) provides emergency assistance to eligible producers of livestock, honeybees and farm-raised fish that have losses due to disease, adverse weather or other conditions, including losses due to blizzards and wildfires. Losses to honeybees include those from colony collapse disorder.

While the other disaster programs are funded through the Commodity Credit Corporation and operate as entitlements for all who are eligible, the ELAP program is limited to a total of $50 million in payments per year. That would mean that if successful applications totaled more than $50 million beneficiaries would receive only a percentage of the loss.

But Nelson noted that applications under the ELAP program have not come near that limit. ELAP payments amounted to $10.7 million in 2008, $11.8 million in 2009 and $6.5 million in 2010. But the need to know total expenditures means that payments are not made until the end of the calendar year.

Under both the LIP and ELAP programs, producers need to notify the FSA office within 30 days of the loss becoming apparent. Formal applications are due by Jan. 30, 2012.

In 2010, southern farmers complained that the disaster programs did not work well for them and at the urging of then-Sen. Blanche Lincoln, D-Ark., USDA established a special program for those states. But this year Nelson said he believes that the process is “working well” in the southern states. He noted that the bulk of the $150 million in livestock forage payments has gone to those states that have been experiencing drought.

Speaking more broadly, Nelson said the need for disaster aid this year has shown the importance of maintaining a strong farm safety net when Congress writes the next farm bill. Nelson said there should be “a safety net that works for both the crop and livestock sectors, that is effective for all crops, but it also needs to be equitable for all regions of the country.”

“We have understood in this country since the 1930s that there needed to be a safety net in agriculture because there are conditions beyond the control of farmers and ranchers,” he said. “Every farm bill since then has updated the safety net. The challenge right now is looking ahead to what Congress is looking at right now in terms of crafting a 2012 farm bill in the context of the budget challenges we have today and within the context of the congressional process of coming up with a deficit reduction process.”

“Natural disaster conditions can become a threat to our food security as a nation,” Nelson concluded. “Agriculture is one of the success stories of our economy right now. We are projecting record farm income, record exports. It is one of the few sectors of our economy where we have a substantial surplus and balance of trade. The safety net under [the agriculture] industry is important to continue. Small towns in Montana are supported by farmers and ranchers. Loan payments keep financial institutions going. It is not just a safety net under farmers and producers, it is a safety net under our rural economy. Agriculture provides tremendous job opportunities. As long as [farmers] are prosperous, our food security as a nation will be assured.”

Farm Service Agency Disaster Assistance Programs