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Tuesday, July 30, 2013

Agricultural Disaster Assistance

Dennis A. Shields
Specialist in Agricultural Policy

The U.S. Department of Agriculture (USDA) offers several permanently authorized programs to help farmers recover financially from a natural disaster, including federal crop insurance, the Noninsured Crop Disaster Assistance Program (NAP), and emergency disaster loans. The federal crop insurance program is designed to protect crop producers from unavoidable risks associated with adverse weather, and weather-related plant diseases and insect infestations. Producers who grow a crop that is currently ineligible for crop insurance may be eligible for a payment under NAP. Under the emergency disaster (EM) loan program, when a county has been declared a disaster area by either the President or the Secretary of Agriculture, agricultural producers in that county may become eligible for low-interest loans.

In order to provide a regular supplement to crop insurance and NAP payments and to assist livestock producers who are generally not covered by these programs, the Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill) included authorization and funding for five new disaster programs to cover losses from weather events, beginning with 2008 crops and ending September 30, 2011.

The 2008 farm bill programs were designed to address the ad hoc nature of disaster assistance provided to producers during the last two decades. The largest of the now-expired programs under the 2008 farm bill is the Supplemental Revenue Assistance Payments Program (SURE), which is designed to compensate eligible producers for a portion of crop losses that are not eligible for an indemnity payment under the crop insurance program. The 2008 farm bill also authorized the Tree Assistance Program (TAP), under which eligible orchardists and nursery growers can receive a payment to cover 70% of the cost of replanting trees or nursery stock following a natural disaster, and three livestock assistance programs. These are (1) the Livestock Indemnity Program (LIP), which compensates ranchers at a rate of 75% of market value for livestock mortality caused by a disaster; (2) the Livestock Forage Disaster Program (LFP), to assist ranchers who graze livestock on drought-affected pastureland or grazing land; and (3) the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP), which provides up to $50 million annually to compensate these producers for disaster losses not covered under other disaster programs. As of July 2, 2013, cumulative payments under these programs totaled $5.8 billion, as claims continue to be processed for losses prior in 2011.

The 112
th Congress considered but did not pass omnibus farm legislation, including extension of certain agricultural disaster programs that expired in September 2011. Instead, at the end of the 112th Congress, on January 2, 2013, the five-year 2008 farm bill was extended one year as part of the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240), but without funding for any of the 2008 farm bill disaster programs.

With expiration of the farm bill (as extended under ATRA) approaching again, the 113
th Congress has been considering an omnibus farm bill with agricultural disaster provisions. The full Senate passed its version of the bill (S. 954) on June 10, 2013. On June 20, 2013, the full House voted to reject the House Agriculture Committee-reported bill (H.R. 1947). It remains unclear whether the House will take up the legislation again in the current session. Both the Senate and House farm bills would retroactively authorize and fund the livestock disaster and tree assistance programs, thereby potentially covering losses associated with the 2012 drought and other weather events through FY2018.

Date of Report: July 3, 2013
Number of Pages: 19
Order Number: RS21212
Price: $29.95

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