There is some good news for Nebraska farmers and ranchers who are reeling from intense blizzards and unprecedented flooding this spring, which also have led to historical delays in planting this year.
On June 3, the House passed a $19.1 billion disaster aid bill, that previously passed the Senate with overwhelming support. With the president’s signature, this package includes more than $5.2 billion to assist USDA and related programs for those in agriculture. Nebraska Farm Bureau President Steve Nelson thanked Nebraska’s Congressional delegation for their support for the disaster assistance package and President Trump for signing this package into law.
“This disaster bill includes roughly $3 billion to cover crop damage, including additional funding for farmers prevented from planting due to the floods, as well as payments for on-farm stored grain that was damaged in these flooding events. The bill also provides $558 million in funding for the Emergency Conservation Program, the primary program farmers and ranchers can utilize for fence repair and debris removal, including clearing sand from farm fields. We urge USDA to move forward as quickly as possible in developing the rules and implementing key programs so they can be put to work in helping Nebraskans.”
The following article, from the American Farm Bureau’s Chief Economist John Newton highlights the agriculture-related provisions in the disaster aid package along with a Q&A offering additional clarifications.
Payments for crop insurance policies under the Federal Crop Insurance Act or the Noninsured Crop Disaster Assistance Program will cover up to 90 percent of the loss. Crops not covered under these programs can receive up to 70 percent of the loss. If a crop is offered a revenue insurance policy under the Federal Crop Insurance Corporation, the greater of the projected price or harvest price for that crop will be used to determine the expected value. (Note: There is widespread confusion among growers as to how this provision may relate to crops prevented from being planted, i.e., if prevent planting payments are made on 70 percent to 90 percent of the revenue guarantee, it could influence planting decisions given the historic delays experienced in both corn and soybean plantings.)
If producers receive these payments, they are required to purchase crop insurance where it is available (under NAP if crop insurance coverage is not available) for the next two available crop years.
Finally, up to $7 million is provided for Whole Farm Revenue Protection indemnity payments that were reduced in 2018. This program provides a safety net for all commodities on a farm under one insurance policy.
To help owners of non-industrial private forests restore forest health, the Emergency Forest Restoration Program was allotted $480 million. In addition, the measure allocates $558 million for the Emergency Conservation Program, which helps farmers and ranchers recover damaged farmland and install methods for water conservation during a severe drought, and $435 million for Watershed Protection and Flood Prevention Practices to assist with rural watershed recovery.
As of May 13, the first round of trade aid provided $8.5 billion in market facilitation program payments to farmers and ranchers, Figure 1. One limiting factor, however, was that trade assistance was capped at $125,000 per operator and farmers with an adjusted gross income above $900,000 were not eligible for trade assistance.
The disaster relief bill amends this provision and waives the eligibility requirement with respect to adjusted gross income. A person or legal entity is now eligible to receive payments under the Market Facilitation Program if the average adjusted gross income exceeds $900,000 and more than 75 percent of the adjusted gross income comes from farming, ranching or forestry-related activities. Payment remains capped at $125,000 per operator.
The recently passed disaster relief bill provides emergency assistance to farmers dealing with the aftermath of natural disasters, as well as farmers impacted by late planting. Most of the agriculture-related funding — slightly more than $3 billion — is for farm disaster assistance related to hurricanes, floods, tornadoes, typhoons, volcanic activity, snowstorms and wildfires. Other funding is allocated for nutrition, conservation, forestry and watershed assistance programs. Figure 2 details the agriculture-related disaster spending by program.
USDA offered the following clarifications on June 11, 2019:
Q1. I heard that I could get 90 percent of my crop insurance guarantee as a prevented planting payment through the disaster bill, is that true?
A. The Additional Supplemental Appropriations for Disaster Relief Act of 2019 gives the USDA the authority to compensate losses caused by prevented planting in 2019 up to 90 percent. While the authority exists, USDA must operate within finite appropriations limits. It is highly unlikely that the supplemental appropriation will support that level of coverage in addition to crop insurance. Congress appropriated $3.005 billion in assistance for a wide array of losses resulting from disasters throughout 2018 and 2019, requiring USDA to prioritize how it is allocated. The Department plans to provide assistance on prevented planting losses within the confines of our authority.
Q2. I have heard that only acreage in a declared disaster area will qualify for prevented planting under the Disaster Relief Act. Is that true?
A. USDA is currently evaluating the new authority provided under the Additional Supplemental Appropriations for Disaster Relief Act of 2019. However, it is generally true that producers with qualifying losses in a Secretarial or Presidentially declared disaster area will be eligible for Disaster Relief Act assistance. Producers with qualifying losses outside of those areas will have eligibility determined on a case-by-case basis.
Q3. If I am prevented from planting but manage to get a cover crop or a forage in the ground, am I able to hay or graze that prior to Nov. 1, given the forage shortage we’re going to experience?
A. USDA encourages you to visit with your crop insurance agent to ensure you are aware of those various prevented planting, cover crop and harvest options for your operation. USDA is currently reviewing the prevented planting restrictions in the Federal Crop Insurance Act to determine what options may be available to address this and other issues. Further clarity regarding this haying and grazing date will be forthcoming.
Q4. What if I don’t have crop insurance? How do MFP and disaster relief programs work for me if I’m prevented from planting due to natural disasters?
A. Crop insurance is not required to qualify for 2019 MFP assistance. However, USDA requires that a producer plant a 2019 MFP-eligible crop to qualify for the 2019 MFP assistance.
Q5. If you choose to plant a cover crop with the potential to be harvested, because of this year’s adverse weather conditions, you may qualify for a minimal amount of 2019 MFP assistance.
A. The Additional Supplemental Appropriations for Disaster Relief Act of 2019 gives the USDA the authority to compensate losses caused by prevented planting in 2019. Producers with qualifying losses in a Secretarial or Presidentially declared disaster area will be eligible for Disaster Relief Act assistance. Producers with qualifying losses outside of those areas will have eligibility determined on a case-by-case basis.