Agricultural Disaster Assistance

Dennis A. Shields
Specialist in Agricultural Policy

In summer 2012, drought has spread across much of the United States and has adversely affected agricultural producers. As of mid-August 2012, the Secretary of Agriculture has designated more than 1,600 counties as disaster areas. The designation makes qualified farmers and ranchers eligible for low-interest emergency loans. The drought is also fueling congressional interest in what programs are currently available and what more can be done to assist producers.

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, 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 three new livestock assistance programs and a tree assistance program. Cumulative payments through FY2011 total more than $4 billion.

The 112th Congress is currently considering omnibus farm legislation, including extension of certain agricultural disaster programs that expired in September 2011. The Senate passed its version of the 2012 omnibus farm bill (S. 3240, the Agriculture Reform, Food, and Jobs Act of 2012) in June 2012. The Senate bill retroactively extends the livestock disaster and tree assistance programs, thereby potentially covering losses associated with the drought currently affecting a large portion of the country. These losses are generally not covered by crop insurance or other assistance. In the House, on July 11, 2012, the House Agriculture Committee passed its version of the farm bill (H.R. 6083, the Federal Agriculture Reform and Risk Management Act of 2012), which includes the same combination of disaster programs as in the Senate bill. Floor action is pending. Separately, on July 27, 2012, the House Agriculture Committee released H.R. 6228 to extend several disaster programs as part of a one-year extension of the farm bill. Subsequently, on July 31, 2012, the bill was pulled from consideration, and H.R. 6233 was introduced to provide livestock and tree assistance disaster programs for FY2012 (i.e., no farm bill extension). On August 2, 2012, the House passed H.R. 6233 by a vote of 223-197.

Meanwhile, in response to the drought, USDA has taken a number of steps. For example, USDA reduced the interest rate for emergency loans from 3.75% to 2.25% and authorized emergency haying and grazing on Conservation Reserve Program acres. USDA also announced plans to purchase $170 million of meat (pork, lamb, chicken, and catfish) to mitigate downward pressure on livestock prices resulting from producers selling livestock for slaughter during the drought.


Date of Report: August 14, 2012
Number of Pages: 17
Order Number: RS21212
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The Pigford Cases: USDA Settlement of Discrimination Suits by Black Farmers

Tadlock Cowan
Analyst in Natural Resources and Rural Development

Jody Feder
Legislative Attorney

On April 14, 1999, Judge Paul L. Friedman of the U.S. District Court for the District of Columbia approved a settlement agreement and consent decree in Pigford v. Glickman, a class action discrimination suit between the U.S. Department of Agriculture (USDA) and black farmers. The suit claimed that the agency had discriminated against black farmers on the basis of race and failed to investigate or properly respond to complaints from 1983 to 1997. The deadline for submitting a claim as a class member was September 12, 2000. As of November 2011, 15,645 (69%) of the 22,720 eligible class members had final adjudications approved.

Many voiced concern over the structure of the settlement agreement, the large number of applicants who filed late, and reported deficiencies in representation by class counsel. A provision in the 2008 farm bill (P.L. 110-246) permitted any claimant who had submitted a late-filing request under Pigford and who had not previously obtained a determination on the merits of his or her claim to petition in federal court to obtain such a determination. A maximum of $100 million in mandatory spending was made available for payment of these claims, and the multiple claims that were subsequently filed were consolidated into a single case, In re Black Farmers Discrimination Litigation (commonly referred to as Pigford II).

On February 18, 2010, Attorney General Holder and Secretary of Agriculture Vilsack announced a $1.25 billion settlement of these Pigford II claims. However, because only $100 million was made available in the 2008 farm bill, the Pigford II settlement was contingent upon congressional approval of an additional $1.15 billion in funding. After a series of failed attempts to appropriate funds for the settlement agreement, the Senate passed the Claims Resolution Act of 2010 (H.R. 4783) to provide the $1.15 billion appropriation by unanimous consent on November 19, 2010. The Senate bill was then passed by the House on November 30 and signed by the President on December 8 (P.L. 111-291).

Like the original Pigford case, the Pigford II settlement provides both a fast-track settlement process and higher payments to potential claimants who go through a more rigorous review and documentation process. A moratorium on foreclosures of most claimants’ farms will remain in place until after claimants have gone through the claims process. On October 27, 2011, the U.S. District Court for the District of Columbia granted final approval of the settlement agreement. Under the terms of the court order, claims may be submitted beginning on November 14, 2011, and the deadline for filing claims was May 11, 2012. Because no payments will be made until the merits of all claims have been heard, it is unclear when successful claimants will receive awards. Claim adjudications may be completed by Fall 2012, although it is estimated that payments will not be made before late 2012, nor concluded until early 2013.

This report highlights some of the events that led up to the original Pigford class action suit and the subsequent Pigford II settlement. The report also outlines the structure of both the original consent decree in Pigford and the settlement agreement in Pigford II. In addition, the report discusses the number of claims reviewed, denied, and awarded under Pigford, as well as some of the issues raised by various parties under both lawsuits.


Date of Report: August 15, 2012
Number of Pages: 14
Order Number: RS20430
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Sugar Program Proposals for the 2012 Farm Bill

Remy Jurenas
Specialist in Agricultural Policy

The sugar program is structured to operate at no cost to the federal government—an objective that has been achieved over the last decade primarily using two tools: marketing allotments that limit the amount that sugar processors can sell, and import quotas that restrict the quantity of foreign sugar allowed to enter the U.S. market. Since the program records no outlays, its future did not receive attention among the proposals submitted to the House and Senate Agriculture Committees for revising the farm safety net and reducing farm program spending.

Producers of sugar beets and sugarcane, and the processors of these crops into sugar, favor retaining the current program without change. They highlight the jobs and economic activity created by the domestic sugar sector. Two general farm organizations and a coalition of some developing countries that benefit from selling against their shares of the U.S. raw sugar import quota also support continuing the current sugar program.

Food manufacturing firms that use sugar in their products advocate program elimination or a transition toward a free market in sugar in the United States. In support of these changes, they point to the higher wholesale refined sugar prices paid since the 2008 farm bill provisions took effect (twice the level compared to the previous 2002 farm bill period). Consumer, trade advocacy groups, and general business organizations that favor freer trade also support this position.

The Senate–passed farm bill (S. 3240) would reauthorize the current sugar and sugar-to-ethanol programs with one change through crop year 2017. Adopted by voice vote, it would advance by two months the U.S. Department of Agriculture’s authority to increase the raw sugar import quota. Two amendments to phase out or modify both programs were defeated on roll call votes. The House Agriculture Committee farm bill (H.R. 6083), marked up on July 11, would reauthorize both programs without any change. An amendment offered in markup to modify the program was defeated on a 36-10 vote. Separately, House leadership considered bringing up H.R. 6228 to extend for one year most farm bill programs, including sugar, but no action was taken.

Congressional opponents of current U.S. sugar policy intend to seek changes. Introduced bills and other proposals form the basis for farm bill amendments offered on the Senate floor, and are expected to be offered during House floor debate. The text of S. 25 (to phase out sugar loan rates in stages through the 2014 crops, and eliminate all price support beginning in 2015) was offered as S.Amdt. 2393 during Senate floor debate on June 13, and tabled (i.e., rejected) on a 50-46 vote. S.Amdt. 2433 to S. 3240 (defeated 46-53) proposed to return price support loan rates to 2008 levels, and to require USDA to administer sugar import quotas and marketing allotments to provide “adequate supplies of sugar at reasonable prices.”

Other House bills—H.R. 1739; Title I, Subtitle C of H.R. 3111; H.R. 1385; and Section 521(a) of H.R. 408—would repeal all sugar price support provisions either immediately or starting with the 2013 crops. These measures would repeal all statutory authorities pertaining to sugar marketing allotments, payments made to processors to store sugar forfeited to USDA, storage facility loans, and the feedstock flexibility program for bioenergy producers (i.e., the sugar-to-ethanol program). However, they differ in changes proposed to sugar import quotas. Some bills would require that each year’s import quotas for raw cane sugar and refined sugars be set to ensure “an adequate supply of sugar at reasonable prices in the United States.” In contrast, other measures would go further and completely eliminate all U.S. tariffs on sugar imports as well as the quota-setting authority administered by USDA and the U.S. Trade Representative.


Date of Report: August 14, 2012
Number of Pages: 8
Order Number: R42551
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Expiring Farm Bill Programs Without a Budget Baseline

Jim Monke
Specialist in Agricultural Policy

The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill) authorizes most federal farm and food policies. Its authorizations generally expire at the end of FY2012, or with the 2012 crop year for the farm commodity programs.

The farm bill provides the mandatory funding for many farm bill programs, including the farm commodity programs and some nutrition, conservation, research, bioenergy, and rural development programs. Funding to write the next farm bill will be based on the baseline projection of the cost of these farm bill programs by the Congressional Budget Office (CBO), and on varying budgetary assumptions about whether programs will continue.

Some farm bill programs have baseline beyond the end of the 2008 farm bill, while others do not. Those with continuing baseline essentially have built-in future funding if policymakers decide the programs should continue in their current form. However, 37 programs that received mandatory funds during the 2008 farm bill are not assumed to continue from a budgetary perspective because they do not have a budgetary baseline beyond FY2012. If policymakers want to continue these programs in the next farm bill, they will need to pay for the programs with offsets.

Depending on the approach used to estimate a cost to extend the 37 programs for five years, an estimated $9 billion to $14 billion of offsets from other sources may be needed. This is nearly 3% of the $507 billion five-year CBO baseline for farm bill programs (FY2013-FY2017), or 13% of the $108 billion five-year baseline if the nutrition title is excluded. Finding this level of offsets may be a difficult task in a tight budget environment, especially when many observers believe that some of the farm bill baseline may be lost to deficit reduction.

The 37 provisions without baseline beyond FY2012 are spread among 12 of the 2008 farm bill’s 15 titles. The title with the most such provisions is the energy title (8), followed by conservation (5), nutrition (5), and horticulture and organic agriculture (5). Just two of the provisions—the agricultural disaster assistance program and the Wetlands Reserve Program, each with uncertainty about future costs—account for about 80% of the value of programs without future baseline.

The House and Senate proposals for the 2012 farm bill provide funding to continue some of the 37 programs without budget baseline. The Senate farm bill, S. 3240, provides more than $3 billion of mandatory funding for 26 of the programs, and the House farm bill, H.R. 6083, provides more than $1.9 billion of mandatory funding for 14 of the programs.

The proposed one-year extension of the 2008 farm bill and disaster assistance programs (H.R. 6228) would extend mandatory funding only for some of the disaster programs. Some of the other programs without baseline explicitly receive an authorization of appropriations in FY2013 and generally may be included in the extension of general program authority, but do not receive any new mandatory funding.


Date of Report: July 31, 2012
Number of Pages: 23
Order Number: R41433
Price: $29.95

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Agricultural Disaster Assistance

Dennis A. Shields
Specialist in Agricultural Policy

In summer 2012, drought has spread across much of the United States and has adversely affected agricultural producers. As of August 1, 2012, the Secretary of Agriculture has designated 1,584 counties as disaster areas (1,452 due to drought). The designation makes qualified farmers and ranchers eligible for low-interest emergency loans. The drought is also fueling congressional interest in what programs are currently available and what more can be done to assist producers.

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, 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 three new livestock assistance programs and a tree assistance program. Cumulative payments through FY2011 total more than $4 billion.

The 112th Congress is currently considering omnibus farm legislation, including extension of certain agricultural disaster programs that expired in September 2011. The Senate passed its version of the 2012 omnibus farm bill (S. 3240, the Agriculture Reform, Food, and Jobs Act of 2012) in June 2012. The Senate bill retroactively extends the livestock disaster and tree assistance programs, thereby potentially covering losses associated with the drought currently affecting a large portion of the country. These losses are generally not covered by crop insurance or other assistance. In the House, on July 11, 2012, the House Agriculture Committee passed its version of the farm bill (H.R. 6083, the Federal Agriculture Reform and Risk Management Act of 2012), which includes the same combination of disaster programs as in the Senate bill. Floor action is pending. Separately, on July 27, 2012, the House Agriculture Committee released H.R. 6228 to extend several disaster programs as part of a one-year extension of the farm bill. Subsequently, on July 31, 2012, the bill was pulled from consideration, and H.R. 6233 was introduced to provide livestock and tree assistance disaster programs for FY2012 (i.e., no farm bill extension). On August 2, 2012, the House passed H.R. 6233 by a vote of 223-197.

Meanwhile, in response to the drought, USDA has taken a number of steps, such as reducing the interest rate for emergency loans from 3.75% to 2.25% and authorizing emergency haying and grazing on Conservation Reserve Program (CRP) acres for 2012. USDA also announced a smaller reduction for 2012 (10% instead of 25% in recent years) on rental payments made to producers on CRP lands used for emergency haying and grazing.


Date of Report: August 3, 2012
Number of Pages: 16
Order Number: RS21212
Price: $29.95

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