Government acts to provide drought assistance
Aug. 8, 2012
Government response to what may be the greatest drought in the United States since the 1950s has been quick, but its scope to date has been held within the bounds of current authorities of the US Department of Agriculture. There have been no calls by congressional leaders for legislation that would provide additional emergency relief to farmers and ranchers. And given high crop prices and concerns over authorizing any additional spending, there may be none.
The expiration of the current farm act on Sept. 30 loomed, and action on a new farm bill was considered urgent, especially in view of the strains on the agricultural economy brought about by the drought. The Senate passed its version of the farm bill several weeks ago, and the House Committee on Agriculture passed its farm bill on July 12.
Leaders of the congressional agriculture committees met July 24. Senator Debbie Stabenow, chairwoman of the Senate Committee on Agriculture, Nutrition and Forestry, said the leaders discussed the importance of the House leadership bringing the House farm bill to the floor for debate and a vote, as they wanted to negotiate differences in the two farm bills in August, during the congressional recess, so a final bill may be voted on by both houses and hopefully sent to the president before Sept. 30.
Through July 25, the USDA has designated 1,369 counties across 31 states as disaster areas, making all qualified farm operators in the areas eligible for low-interest emergency loans. The department also recently reduced the interest rate for emergency loans from 3.75 percent to 2.25 percent, while lowering the reduction in the annual rental payment to producers on Conservation Reserve Program acres used for emergency haying or grazing from 25 percent to 10 percent. The USDA also simplified the secretarial disaster designation process and reduced the time it takes to designate counties affected by disasters.
Secretary of Agriculture Tom Vilsack on July 23 announced new temporary flexibility in the USDA’s major conservation programs to provide assistance to livestock producers and announced plans to encourage crop insurance companies to provide a short grace period for farmers on unpaid insurance premiums.
“Beginning today, USDA will open opportunities for haying and grazing on lands enrolled in conservation programs while providing additional financial and technical assistance to help landowners through this drought,” Vilsack said. “And we will deliver greater peace of mind to farmers dealing with this worsening drought by encouraging crop insurance companies to work with farmers through this challenging period.”
The USDA will allow additional acres idled from production under the CRP to be used for haying or grazing under the emergency conditions. The CRP is a voluntary program that provides producers annual rental payments on their land in exchange for planting resource-conserving crops on cropland to help prevent erosion, provide wildlife habitat and improve the environment. CRP acres already may be used for emergency haying and grazing during natural disasters to provide feed to livestock. The action announced by the secretary will allow lands that are not yet classified as “under severe drought” but that are “abnormally dry” to be used for haying and grazing. This will increase available forage for livestock.
New flexibilities in the other principal conservation programs — the Wetlands Reserve Program and the Environmental Quality Incentives Program — also would allow for increased haying and grazing as well as watering livestock.
To help producers who may have cash flow problems due to the drought, Vilsack said the USDA will encourage crop insurance companies to voluntarily forego charging interest on unpaid crop insurance premiums for an extra 30 days, to Nov. 1, 2012, for spring crops. In turn, to assist the crop insurance companies, the USDA said it would not require crop insurance companies to pay uncollected producer premiums until one month later.
Vilsack said the USDA’s legal authority to provide assistance was limited.
“That’s because the 2008 farm bill disaster programs, which were implemented under President Obama, expired last year,” Vilsack said. “Prior to the expiration, these programs helped hundreds of thousands of US producers during disasters.
“If Congress doesn’t act, the USDA will remain limited in our means to help drought-stricken producers. That’s why President Obama and I continue to call on Congress to take steps to ensure that the USDA has the tools it needs to help farm families during the drought. Disaster assistance for producers is also one of many reasons why we need swift action by Congress to pass a food, farm and jobs bill this year.”