Agricultural Disaster Assistance
Dennis A. Shields
Specialist in Agricultural Policy
Ralph M. Chite
Section Research Manager
October 25, 2010January 22, 2013
Congressional Research Service
7-5700
www.crs.gov
RS21212
CRS Report for Congress
Prepared for Members and Committees of Congress
Agricultural Disaster Assistance
Summary
In summer 2012, a major drought spread across much of the United States and adversely affected
agricultural production. By the end of 2012, the Secretary of Agriculture had designated 2,245
counties in 39 states as disaster areas due to drought. The drought has fueled 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 direct payment
under 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, , 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 through FY2011. The largest of the
new programs is the Supplemental Revenue Assistance Payments Program (SURE), which is
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 The
2008 farm bill also authorized three new livestock assistance programs and a tree assistance
program. The Livestock Indemnity Program (LIP) compensates ranchers at a rate of 75% of
market value for livestock mortality caused by a disaster. The Livestock Forage Disaster Program
(LFP) assists ranchers who graze livestock on drought-affected pastureland or grazing land. The
Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP)
compensates producers for disaster losses not covered under other disaster programs. Finally, the
Tree Assistance Program (TAP) provides payments to eligible orchardists and nursery tree
growers to cover 70% of the cost of replanting trees or nursery stock following a natural disaster.
For individual producers, combined payments under SURE, LIP, LFP, and ELAP may not exceed
$100,000. For TAP, a separate limit of $100,000 per year per producer applies.
The new programs are designed to address the ad hoc nature of disaster assistance provided to
producers during the last two decades. Since 1988, Congress has regularly made emergency
financial assistance available to farmers and ranchers.
Following widespread crop losses in 2009 due to excessive rain, legislation was introduced in late
2009 in both chambers (S. 2810 and H.R. 4177) to make emergency payments to producers for
losses in calendar year 2009. Agricultural disaster provisions were eventually included in a “tax
extenders” package both chambers passed but failed to reconcile. Subsequent efforts to include
disaster provisions in other legislation were unsuccessful. However, after discussions with
Senator Lincoln—who had led efforts to secure additional disaster assistance—the Administration
announced on September 15, 2010, that it would implement a 2009 disaster assistance package
estimated at $630 million under “Section 32” authority to reestablish the purchasing power of
farmers. On October 22, 2010, USDA said it would begin issuing payments to producers of rice,
soybeans, sweet potatoes, and cotton who suffered at least a 5% loss in certain counties. Critics in
Congress and elsewhere say it could result in a windfall to some producers and possibly result in
unequal treatment of producers, particularly those who suffered losses but produce a non-covered
crop or are not located in a designated county.
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Contents
Major USDA Disaster Assistance Programs.................................................................................1
Federal Crop Insurance .........................................................................................................1
Noninsured Crop Disaster Assistance Program (NAP) ...........................................................2
Emergency Disaster Loans ....................................................................................................3
Supplemental Revenue Assistance Payments Program (SURE)..............................................4
Other 2008 Farm Bill Disaster Programs ...............................................................................5
Emergency Supplemental Farm Disaster Assistance ....................................................................5
2005-2007 Supplemental Assistance......................................................................................6
Crop Loss Assistance ......................................................................................................6
Livestock Assistance .......................................................................................................6
Conservation...................................................................................................................7
2008 Supplemental Assistance ..............................................................................................7
American Recovery and Reinvestment Act of 2009 ...............................................................7
Disaster Assistance for 2009 Losses ......................................................................................8
Contacts
Author Contact Information ........................................................................................................9
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Agricultural Disaster Assistance
O
ver the years, USDA has had at its disposal three major programs designed to help crop
producers recover from the financial effects of natural disasters—federal crop insurance,
the Noninsured Crop Disaster Assistance Program (NAP), and emergency disaster loans.
All three of these programs have permanent authorization and receive regular annual funding. In
addition to benefits provided under these standing programs, Congress has regularly made
emergency financial assistance available to farmers and ranchers in the form of disaster
payments.
program.
As of December 4, 2012, cumulative payments were $4.2 billion.
The 112th Congress considered but did not pass omnibus farm legislation, including extension of
certain agricultural disaster programs that expired in September 2011. The Senate passed its
version of the omnibus 2012 farm bill (S. 3240, the Agriculture Reform, Food, and Jobs Act of
2012) in June 2012. The Senate bill would have retroactively extended the livestock disaster and
tree assistance programs, thereby potentially covering losses associated with the 2012 drought. In
the House, on July 11, 2012, the House Agriculture Committee passed its farm bill (H.R. 6083,
the Federal Agriculture Reform and Risk Management Act of 2012), which included the same
combination of disaster programs as in the Senate bill. The bill did not reach the House floor, and
additional attempts to reauthorize disaster programs were not successful in the 112th Congress.
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.
Separately, in response to the 2012 drought, USDA took 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.
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Contents
Recent Developments ...................................................................................................................... 1
Major USDA Disaster Assistance Programs .................................................................................... 2
Federal Crop Insurance.............................................................................................................. 2
Noninsured Crop Disaster Assistance Program (NAP) ............................................................. 3
Emergency Disaster Loans ........................................................................................................ 4
2008 Farm Bill Disaster Programs................................................................................................... 5
Supplemental Revenue Assistance Payments Program (SURE) ............................................... 5
Other 2008 Farm Bill Disaster Programs .................................................................................. 6
Issues for Congress .......................................................................................................................... 7
Tables
Table 1. Agricultural Disaster Provisions in Selected Bills of the 112th Congress .......................... 9
Appendixes
Appendix A. Brief History of Recent Emergency Farm Disaster Assistance ................................ 10
Contacts
Author Contact Information........................................................................................................... 15
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O
ver the years, the U.S. Department of Agriculture (USDA) has had at its disposal three
major programs designed to help crop producers recover from the financial effects of
natural disasters—federal crop insurance, the Noninsured Crop Disaster Assistance
Program (NAP), and emergency disaster loans. All three of these programs have permanent
authorization and receive regular annual funding. In addition to benefits provided under these
standing programs, Congress has regularly made emergency financial assistance available to
farmers and ranchers in the form of disaster payments.1
During the congressional debate on the omnibus 2008 farm bill, some policymakers wanted to
make permanent some level of disaster payments to supplement the crop insurance program and
attempt to end the ad hoc (but regular) nature of emergency disaster assistance. Consequently,
Moreover,
livestock producers traditionally have not been covered by crop insurance or other forms of
federal support. Consequently, Title XV of the Food, Conservation, and Energy Act of 2008 (P.L.
110-246, the 2008 farm bill)
authorizes a new $3.8 billion authorized a trust fund to cover the cost of making agricultural
disaster assistance
available on an ongoing basis over four years (FY2008-FY2011) through five new programs.
This report has two sections. The first provides an overview of the current USDA disaster
assistance programs: federal crop insurance, NAP payments, emergency disaster loans, the new
Supplemental Revenue Assistance Payments Program (SURE), and four other smaller disaster
programs authorized in the 2008 farm bill. The second section reviews the recent history of
emergency supplemental farm disaster assistance.
Major USDA Disaster Assistance Programs
Federal Crop Insurance
new programs, including three programs for livestock (and other) assistance, one for tree
assistance, and one for crop disaster assistance. Congress has not provided funding for these five
programs for losses after September 30, 2011, creating concern for producers adversely affected
by subsequent drought and other disasters.
This report has four sections. The first describes recent developments in weather and policy. The
second provides an overview of the current USDA disaster assistance programs: federal crop
insurance, NAP payments, and emergency disaster loans. The third section discusses the nowexpired disaster programs under the 2008 farm bill, specifically Supplemental Revenue
Assistance Payments Program (SURE) and four other smaller disaster programs. The fourth
section briefly reviews congressional issues. An appendix reviews the recent history of
emergency supplemental farm disaster assistance and administrative actions by USDA.
Recent Developments
In summer 2012, drought spread across much of the United States. By the end of 2012, the
Secretary of Agriculture had designated 2,245 counties in 39 states as disaster areas due to
drought.2 The designation triggers low-interest emergency loans for qualified producers.
Regardless of disaster declarations, insured producers suffering losses have been receiving
indemnities from federal crop insurance policies, with total indemnities of $11.6 billion as of
mid-January 2013. In areas where crop insurance is not available, producers who had purchased a
catastrophic policy under the Noninsured Crop Disaster Assistance Program (NAP) might receive
a payment for losses in excess of 50%. See “Major USDA Disaster Assistance Programs,” below
for program details.3 Livestock producers generally are not eligible for federal crop insurance,
1
In addition to the production assistance programs, USDA also has several emergency agricultural land assistance
programs that help producers repair damaged crop and forest land following natural disasters. These include the
Emergency Conservation Program (ECP), the Emergency Forest Restoration Program (EFRP), and the Emergency
Watershed Protection (EWP) program. For more information, see CRS Report R42854, Emergency Assistance for
Agricultural Land Rehabilitation.
2
U.S. Department of Agriculture, “USDA Designates 597 Counties in 2013 as Disaster Areas Due to Drought,” press
release, January 9, 2013, http://www.usda.gov/wps/portal/usda/usdahome?contentidonly=true&contentid=2013/01/
0002.xml.
3
Also, a list of USDA disaster factsheets is available at http://www.fsa.usda.gov/Internet/FSA_File/
(continued...)
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although crop insurance policies are available in some areas for insuring pasture, rangeland, and
forage.4
The 2011 expiration of the 2008 farm bill disaster programs for livestock producers motivated
some members to support their reauthorization, but several attempts in the 112th Congress were
not successful, including stand-alone legislation and omnibus farm legislation that would have
replaced the expiring 2008 farm bill. Eventually, 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. 112240), but without funding for the 2008 farm bill disaster programs. Under ATRA, Congress
provided authority to appropriate funds (but no actual funding) for the three livestock programs
and the tree assistance program. Neither discretionary funding authority nor resources were
provided for the crop disaster program (the Supplemental Revenue Assistance Payments Program
or SURE).
Separately, in response to the 2012 drought, USDA took several actions to assist livestock
producers. These include authorization of emergency haying and grazing on Conservation
Reserve Program (CRP) acres and the purchase of meat (pork, lamb, chicken, and catfish) to
mitigate downward pressure on livestock prices resulting from producers selling livestock for
slaughter during the current drought. For a discussion of administrative and congressional actions
on agricultural disaster assistance in recent years, see Appendix A.
In the 113th Congress, as of mid-January, Congress has not approved any additional funding for
agricultural disaster assistance. However, additional funding for emergency agricultural land
assistance is included in FY2013 supplemental funding (H.R. 152) for disaster relief following
Hurricane Sandy and other 2012 disasters. For more information, see CRS Report R42869,
FY2013 Supplemental Funding for Disaster Relief: Summary and Considerations for Congress.
Major USDA Disaster Assistance Programs
Federal Crop Insurance5
The federal crop insurance program is administered by USDA’s Risk Management Agency. The
program is designed to protect crop producers from unavoidable risks associated with adverse
weather, and weather-related plant diseases and insect infestations. A producer who chooses to
purchase an insurance policy must do so by an administratively determined deadline date, which
varies by crop and usually coincides with the planting season. Crop insurance is available for
most major crops. Insurance products that protect against loss in revenue (yield times price) are
also available.
(...continued)
disaster_fact_sheets.pdf.
4
See USDA/Risk Management Agency information on insurance program for pasture, rangeland, and forage,
http://www.rma.usda.gov/policies/pasturerangeforage/. In 2012, 48 million acres were insured under this program.
5
For more information on the federal crop insurance program, see CRS Report R40532, Federal Crop Insurance:
Background CRS Report RL34207, Crop Insurance and Disaster Assistance in the 2008 Farm Bill; and CRS Report
R42813, Federal Crop Insurance for Specialty Crops: Background and Legislative Proposals.
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The federal crop insurance program was instituted in the 1930s and was subject to major
legislative reforms in 1980, and again in 1994 and 2000. The Agriculture Risk Protection Act of
2000 (P.L. 106-224) pumped $8.2 billion in new federal spending over a five-year period into the
program primarily through more generous premium subsidies to help make the program more
affordable to farmers and enhance farmer participation levels, in an effort to preclude the need for
ad-hoc emergency disaster payments. Between 20002006 and 20092011, the federal subsidy to the crop
insurance program averaged $3.75.9 billion per year, up from an annual average of $3.0 billion
during 2000-2005, $1.1 billion in the
1990s 1990s, and about $500 million in the 1980s. Nearly three-fourths of federal spending during 20002009More than 80%
of the total during 2006-2011 was used to subsidize producer premiums, and the balance
primarily covered the
government share of program losses and reimbursed participating private
insurance companies
for their administrative and operating expenses. In 2007 and 2008, program
costs rose sharply,
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mainly because premium subsidies and company reimbursements are based on
total premiums,
and total premiums increased in tandem with farm commodity prices.1 Similarly,
high commodity prices in 2011 resulted in premium subsidies exceeding $7 billion, the largest
portion of overall government costs of $11.3 billion. In 2012, high commodity prices drove up
premiums subsidies again and persistent drought resulted in large losses for the program. USDA
estimates total program cost at $14.1 in FY2012.
Under the current crop insurance program, a producer who grows an insurable crop selects a level
of crop yield and price coverage and pays a premium that increases as the levels of yield and
price coverage risesrise. However, all eligible producers can receive catastrophic (CAT) coverage
without paying a premium. The premium for this portion of coverage is completely subsidized by
the federal government. Under CAT coverage, participating producers can receive a payment
equal to 55% of the estimated market price of the commodity, on crop losses in excess of 50% of
normal yield, or 50/55 coverage.
Although eligible producers do not have to pay a premium for CAT coverage, they are required to
pay upon enrollment a $300 administrative fee per covered crop for each county where they grow
the crop.26 The fee can be waived by USDA for financial hardship cases. Any producer who opts
for CAT coverage has the opportunity to purchase additional insurance coverage from a private
crop insurance company. For an additional premium paid by the producer, and partially
subsidized by the government, a producer can increase the 50/55 catastrophic coverage to any
equivalent level of coverage between 50/100 and 85/100, (i.e., 85% of yield and 100% of the
estimated market price), in increments of 5%.
For many insurable commodities, an eligible producer can purchase revenue insurance. Under
such a policy, a farmer potentially can receive an indemnity payment when actual farm revenue
falls below the target level of revenue, regardless of whether the shortfall in revenue was caused
by poor production or low farm commodity prices. Insured producers also can be eligible for
reduced coverage if they are late or prevented from planting because of flooding. (For more
information on the federal crop insurance program, see CRS Report RL34207, Crop Insurance
and Disaster Assistance in the 2008 Farm Bill; and CRS Report R40532, Federal Crop
Insurance: Background and Issues.)
Noninsured Crop Disaster Assistance Program (NAP)
Producers who grow a crop that is currently ineligible for crop insurance may be eligible for a
direct payment under USDA’s Noninsured Crop Disaster Assistance Program (NAP). NAP has
permanent authority under the Federal Crop Insurance Reform Act of 1994 (P.L. 103-354, as
amended), and is administered by USDA’s Farm Service Agency. The program’s principal
Section 196 of the Federal Agriculture Improvement and Reform Act
6
The 2008 farm bill (P.L. 110-246) increased the fee to $300 per crop per county from the existing $100 fee.
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of 1996 (7 U.S.C. 7333), and is administered by USDA’s Farm Service Agency. It was first
authorized under the Federal Crop Insurance Reform Act of 1994 (P.L. 103-354). The program’s
principal clientele are farmers who grow a crop that is ineligible for federal crop insurance. NAP
is not
subject to annual appropriations. Instead, it receives such sums as are necessary through
USDA’s
Commodity Credit Corporation, which has a line of credit with the U.S. Treasury to fund
an array
of farm programs.
Eligible crops under NAP include any commercial crops grown for food or fiber that are
, fiber, or livestock
consumption that are ineligible for crop insurance, and include mushrooms, floriculture,
ornamental nursery, Christmas
tree crops, turfgrass sod, aquaculture, and ginseng. Trees grown
for wood paper or pulp products
are not eligible. To be eligible for a NAP payment, a producer first must apply for coverage under
1
In December 2009, USDA proposed changes to how company reimbursements are calculated. For more information,
see CRS Report R40966, Renegotiation of the Standard Reinsurance Agreement (SRA) for Federal Crop Insurance, by
Dennis A. Shields.
2
The 2008 farm bill (P.L. 110-246) increased the fee to $300 per crop per county from the existing $100 fee.
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first must apply for coverage under the program by the application closing date, which varies by
crop, but is generally about 30 days
prior to the final planting date for an annual crop. Like
catastrophic crop insurance, NAP
applicants must also pay an administrative fee. The NAP fee is
$250 per crop payable at the time
of application (rising from $150100 per crop, as required by the
2008 farm bill).7
In order to receive a NAP payment, a producer must experience at least a 50% crop loss caused
by a natural disaster, or be prevented from planting more than 35% of intended crop acreage. For
any losses in excess of the minimum loss threshold, a producer can receive 55% of the average
market price for the covered commodity. Hence, NAP is similar to catastrophic crop insurance
coverage in that it pays 55% of the market price for losses in excess of 50% of normal historic
production. A producer of a noninsured crop is subject to a payment limit of $100,000 per person
and is ineligible for a payment if the producer’s qualifying gross revenues exceed $2 million.
nonfarm adjusted gross income exceeds
$500,000. NAP payments were $110 million in FY2005, $66 million in FY2006, $127 million in
FY2007,
$74 million in FY2008, $62 million in FY2009, $99 million in FY2010, $71 million in
FY2011, an estimated $109 million in FY2012, and an estimated $115and an estimated $189 million in FY2010.3FY2013.8
Emergency Disaster Loans
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
emergency disaster (EM) loans available through USDA’s Farm Service Agency.9 Producers in
counties that are contiguous to a county with a disaster designation also become eligible for an
EM loan. EM loan funds may be used to help eligible farmers, ranchers, and aquaculture
producers recover from production losses (when the producer suffers a significant loss of an
annual crop) or from physical losses (such as repairing or replacing damaged or destroyed
structures or equipment, or for the replanting of permanent crops such as orchards). A qualified
applicant can then borrow up to 100% of actual production or physical losses (not to exceed
$500,000) at a below-market interest rate.
an interest rate of 2.25%.
7
For more information on NAP, see the USDA fact sheet at http://fsa.usda.gov/Internet/FSA_File/nap09.pdf.
U.S. Department of Agriculture, http://www.fsa.usda.gov/FSA/webapp?area=about&subject=landing&topic=bap-bucc.
9
On July 11, 2012, USDA announced the reduction of interest rates for emergency loans from 3.75% to 2.25%. See
U.S. Department of Agriculture, “USDA Announces Streamlined Disaster Designation Process with Lower Emergency
Loan Rates and Greater CRP Flexibility in Disaster Areas,” press release, July 11, 2012, http://www.fsa.usda.gov/FSA/
newsReleases?area=newsroom&subject=landing&topic=ner&newstype=newsrel&type=detail&item=
nr_20120711_rel_0228.html.
8
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Once a county is declared eligible, an individual producer within the county (or a contiguous
county) must also meet the following requirements for an EM loan. A producer must (1) be a
family farmer and a citizen or permanent resident of the U.S.United States; (2) experience a crop loss
of more
than 30% or a physical loss of livestock, livestock products, real estate, or property; and
(3) be
unable to obtain credit from a commercial lender, but still show the potential to repay the
loan.
Applications must be received within eight months of the county’s disaster designation date.
Loans for non-real estate purposes generally must be repaid within one to seven1 to 7 years; loans for
physical physical
losses to real estate have terms up to 20 years. Depending on the repayment ability of the
producer and other circumstances, these terms can be extended to 20 years for non -real estate
losses and up to 40 years for real estate losses.
The EM loan program is permanently authorized by Title III of the Consolidated Farm and Rural
Development Act (P.L. 87-128), as amended, and is subject to annual appropriations.
Traditionally, an appropriation was made for EM loans within the regular agriculture
appropriations bill. However, most of the funding for the program in recent years has been
provided through emergency
supplemental appropriations. Emergency provisions in the
, such as the Consolidated Appropriations Act of 2000 (P.L. 106-113),
which provided funding to make $547 million
in EM loans over a multi-year period. Total EM
loans made were $90 million in FY2001, $58
3
U.S. Department of Agriculture, http://www.ers.usda.gov/publications/agoutlook/aotables/2010/09Sep/aotab35.xls.
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million in FY2002, just under $100 million in FY2003, $30 million in FY2004, $23 million in
FY2005, $51 million in FY2006, $75 million in FY2007, $45 million in FY2008, $30 million in
FY2009, and $35 million thus far in FY2010 (through September 3, 2010).4
Supplemental Revenue Assistance Payments Program (SURE)
The largest of the new farm disaster assistance programs authorized through the 2008 farm bill is
the Supplemental Revenue Assistance Payments Program (SURE) for crop producers for losses
occurring from crop year 2008 through September 30, 2011.5 The program is designed to
(made) are typically less than $100 million per year.10
2008 Farm Bill Disaster Programs
In an attempt to avoid ad-hoc disaster programs that had become almost routine, and to cover
livestock (and other) producers, the 2008 farm bill included authorization and funding for five
new disaster programs. However, these programs were authorized only for losses caused by
weather events that occurred on or before September 30, 2011, and not through the entire life of
the 2008 farm bill (authorization for many farm bill programs originally ended on September 30,
2012). Consequently, losses caused by events after September 30, 2011, were not covered under
the 2008 farm bill. Similarly, the subsequent one-year farm bill extension authorized by the
American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240) did not provide funding for losses
after September 2011. However, funds can still be spent on disasters that occurred by that date,
and applications are still being accepted for losses that occurred on or before September 30, 2011.
As of December 4, 2012, cumulative payments under these programs totaled $4.2 billion.11
Importantly, as a result of the early expiration of the 2008 farm bill disaster programs, funding for
these programs is not included in future baseline budgets. Reauthorization requires Congress to
find either new funding or budget offsets to pay for the programs. See “Issues for Congress.”
Supplemental Revenue Assistance Payments Program (SURE)
The largest of the farm disaster assistance programs authorized by the 2008 farm bill is the
Supplemental Revenue Assistance Payments Program (SURE).12 The program is designed to
10
For more information on the emergency disaster loan program, see the USDA fact sheet at http://fsa.usda.gov/
Internet/FSA_File/emergency_loan_program.pdf.
11
For detailed program information and maps, see http://www.fsa.usda.gov/FSA/webapp?area=home&subject=diap&
topic=landing. Payment data by program and state are available at http://www.fsa.usda.gov/Internet/FSA_File/
disaster_payments_state_sheet.xls.
12
For more information on the SURE program, see CRS Report R40452, A Whole-Farm Crop Disaster Program:
(continued...)
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compensate eligible producers for a portion of crop losses that are not eligible for an indemnity
payment under the crop insurance program (i.e., the portion of losses that is part of the deductible
on the policy.)). An eligible producer can receive a payment equal to 60% of the difference
between a target level of revenue and the actual total farm revenue for the entire farm. The target
level of revenue will beis based on the level of crop insurance coverage selected by the farmer, thus
increasing if a farmer opts for higher levels of coverage. To be eligible for a payment, a producer
must be in or contiguous to a county that has been declared a disaster area by the Secretary of
Agriculture, or have an overall 50% farm loss. Payments are limited so that the disaster program
guarantee level cannot exceed 90% of what income likely would have been in the absence of a
natural disaster. The producer also must have at least the minimum level of crop insurance (CAT)
coverage for insurable crops and participate in the NAP program for non-insurablenoninsurable crops.613
Given the complexity of the program, USDA took 18 months to issue regulations for the SURE
program, with farmer signup for 2008 crop losses beginning January 4, 2010. Prior to publication
of the regulations, some farm groups and legislators had expressed concern for timely publication
so farmers could learn about program details and sign up.
A concern many have with the program is that payments for crop losses cannot be determined
until after the marketing year ends, since a portion of the disaster payment formula is based on the
average market year prices (published after the year ends), as defined in statute. For example, the
marketing year for the 2008 corn crop ended August 31, 2009, and USDA published the market
year average price on September 29, 2009. After that date, revenue calculations could be
determined for farms producing corn. Thus, crop disaster payments in any year could be delayed
typically have
been delayed by more than a year after the actual loss.
As of October 19, 2010, payments under SURE have totaled $1.7 billion for 2008 losses.7
4
For more information on emergency disaster loan funding and program details, see http://www.fsa.usda.gov/FSA/
webapp?area=home&subject=fmlp&topic=fun.
5
For more information on the SURE program, see CRS Report R40452, A Whole-Farm Crop Disaster Program:
Supplemental Revenue Assistance Payments (SURE), by Dennis A. Shields The annual signup period reflects the
delay. For example, USDA announced it would accept applications for 2011 losses between
October 22, 2012, and July 7, 2013.
Other 2008 Farm Bill Disaster Programs
In addition to SURE, described above, the 2008 farm bill also authorized and funded four smaller
disaster programs for losses from weather events occurring on or before September 30, 2011: (1)
Livestock Indemnity Program (LIP), which compensates ranchers at a rate of 75% of market
value for livestock mortality caused by a disaster;14 (2) Livestock Forage Disaster Program (LFP),
to assist ranchers who graze livestock on drought-affected pastureland or grazing land;15
(...continued)
Supplemental Revenue Assistance Payments (SURE). USDA program information is available at
http://www.fsa.usda.gov/FSA/webapp?area=home&subject=diap&topic=sure. Also, see Farm Service Agency, USDA,
“Supplemental Revenue Assistance Payments Program,” 74 Federal Register 68480-68498, December 28, 2009.
613
The 2008 farm bill made an exception to the crop insurance/NAP requirement for the 2008 crop year by allowing
producers who did not purchase crop insurance or NAP coverage in advance to be eligible for the program, as long as
they pay the equivalent administrative fee for coverage within 90 days of enactment. Subsequently, language contained
in P.L. 110-398 and P.L. 111-5 (the economic stimulus bill) modified program details for the 2008 and 2009 crops.
7
For latest payment information, see http://www.fsa.usda.gov/FSA/webapp?area=home&subject=diap&topic=landing.
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Other 2008 Farm Bill Disaster Programs
In addition to SURE, described above, the 2008 farm bill also authorizes and funds four smaller
disaster programs through FY2011: (1) Livestock Indemnity Program (LIP), which compensates
ranchers at a rate of 75% of market value for livestock mortality caused by a disaster;8
(2) Livestock Forage Disaster Program (LFP), to assist ranchers who graze livestock on droughtaffected pastureland or grazing land;9 (3) Emergency Assistance for Livestock, Honey Bees, and
Farm-Raised Fish Program (ELAP), which provides up to $50 million to compensate these
producers for disaster losses not covered under other disaster programs; 10 and (4) 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.
For individual producers, combined payments under SURE, LIP, LFP, and ELAP may not exceed
$100,000. For TAP, a separate limit of $100,000 per year per producer applies.
Emergency Supplemental Farm Disaster Assistance
In virtually every crop year between 1988 and 2007, Congress provided ad hoc disaster assistance
to farmers and ranchers with significant weather-related production losses. Ad-hoc assistance has
been made available primarily through emergency supplemental appropriations to a wide array of
USDA programs.11
While disaster programs authorized in the 2008 farm bill are meant to replace the need for ad hoc
payments, it is an open question whether Congress will continue to pass additional emergency
payments for producers. This is particularly true for crop losses, because of the potential time lag
between actual losses and government payments.12 The sections below describe the most recent
emergency funding, beginning with 2005 losses and ending with congressional and administrative
action in 2009 and 2010 for 2009-crop losses.
8
See USDA fact sheet at http://www.fsa.usda.gov/Internet/FSA_File/lip09.pdf. Also see Farm Service Agency and
Commodity Credit Corporation, USDA, “Livestock Indemnity Program and General Provisions for Supplemental
Agricultural Disaster Assistance Programs,” 74 Federal Register 31567-31578, July 2, 2009.
9
See USDA fact sheet at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=diap&topic=lfp. Also see Farm
Service Agency, USDA, “Livestock Forage Disaster Program and Emergency Assistance for Livestock, Honeybees,
and Farm-Raised Fish; Supplemental Agricultural Disaster Assistance,” 74 Federal Register 46665-46683, September
11, 2009.
10
See Farm Service Agency, USDA, “Livestock Forage Disaster Program and Emergency Assistance for Livestock,
Honeybees, and Farm-Raised Fish; Supplemental Agricultural Disaster Assistance,” 74 Federal Register 46665-46683,
September 11, 2009.
11
For a history of the congressional response to agricultural disasters, see CRS Report RL31095, Emergency Funding
for Agriculture: A Brief History of Supplemental Appropriations, FY1989-FY2009, by Ralph M. Chite.
12
In contrast to crop disaster payments under the 2008 farm bill, the method for determining loss under the livestock
programs is more streamlined, and livestock payments arrive more quickly. Livestock death losses for individual
producers immediately trigger Livestock Indemnity Program payments, while the weekly publication “U.S. Drought
Monitor” is used to determine payments for grazing losses under the Livestock Forage Disaster Program. As of early
January 2010, USDA had made more than $175 million in disaster payments under both programs.
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2005-2007 Supplemental Assistance
Title IX of the FY2007 Iraq war supplemental appropriations act (P.L. 110-28) provided
emergency agricultural disaster assistance, primarily for crop and livestock losses in any one of
years 2005, 2006, or 2007 (for crops planted before February 28, 2007). Subsequently, Congress
extended the assistance for crop and livestock losses in all of 2007 in the FY2008 Consolidated
Appropriations Act (P.L. 110-161, Division A, Section 743). Both laws limited payments to one
of the three years, as selected by the producer. The cost of 2005-2007 assistance was $2.45
billion, including $2.03 billion for crop loss assistance and $383 million for livestock feed and
mortality losses.13
The following is a description of the major agricultural disaster provisions.14 The producer signup
period for 2005-2007 crop years ended on February 27, 2009.
Crop Loss Assistance
P.L. 110-28, as amended by P.L. 110-161, provided such sums as necessary to fund a crop disaster
payment program for 2005, 2006, or 2007 production losses. Payments under the crop loss
provisions were $2.03 billion. In order to contain program costs, a producer could not receive a
payment for more than one crop year. Eligible producers could receive a payment on losses in
excess of 35% of normal crop yields. The payment rate was 42% of the established market price
for the commodity. The act also prohibited any crop disaster payments to a producer who either
waived crop insurance or did not participate in the Noninsured Crop Disaster Assistance Program
in the year of the loss. Also, the sum of disaster payments, crop insurance indemnities, and crop
marketings could not exceed 95% of what the value of the crop would have been in the absence
of losses. P.L. 110-28 also required USDA to make payments to farmers who experienced quality
losses to their 2005-2007 crops, as well as for quantity losses.
Livestock Assistance
P.L. 110-28, as amended by P.L. 110-161, contained necessary sums to fund a Livestock
Compensation Program (LCP) to reimburse livestock growers for feed losses caused by a natural
disaster. Payments under the LCP provision were $341 million. Payments were made to producers
of beef, dairy, poultry, hogs, sheep, goats, and catfish, in any county that was declared a disaster
area by the President or Secretary of Agriculture between January 1, 2005, and December 31,
2007, with payments limited to one year of losses. To contain costs, the act limited the payment
rate to 61% of the payment rate used in previous years. For the same time period, P.L. 110-28, as
amended, contained necessary funds (payments totaled $42 million) for a Livestock Indemnity
Program to reimburse producers for replacing livestock killed by a natural disaster, at a payment
rate of at least 26% of the market value of the livestock prior to death. The statute also included
payments to dairy producers for production losses in disaster-designated counties (payments
totaled $12 million).
13
Payment figures in this section are from U.S. Department of Agriculture, Economic Research Service, Agricultural
Outlook: Statistical Indicators, Table 35—CCC Net Outlays by Commodity and Function, http://www.ers.usda.gov/
publications/agoutlook/aotables/2009/11Nov/aotab35.xls.
14
For more information on these disaster programs, see various USDA fact sheets accessed at http://www.fsa.usda.gov/
FSA/webapp?area=home&subject=diap&topic=landing.
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Conservation
P.L. 110-28 contained $16 million in additional funding for the Emergency Conservation Program
(ECP) to assist farmers in the cleanup and restoration of farmland damaged by a natural disaster.
Separately, P.L. 110-28 in effect provided additional funds for the Emergency Forestry
Conservation Reserve Program, a program that helps restore forest lands in the South that were
damaged by the 2005 hurricanes. The act removed statutory language that prohibited any
spending beyond calendar year 2006, which CBO estimated at $115 million for FY2007.
2008 Supplemental Assistance
Primarily in response to the 2008 Midwest floods, the FY2008 Supplemental Appropriations Act
(P.L. 110-252) contained a total of nearly $480 million in emergency funding to eligible farmers
to defray the cost of clean-up and rehabilitation of farmland and watersheds following a disaster.
Of the total amount available, $89.4 million was for the Emergency Conservation Program
(ECP), which assists farmers in the cleanup and restoration of farmland damaged by a natural
disaster, and $390.5 million was for the Emergency Watershed Protection Program (EWPP),
which is designed to relieve imminent hazards created by natural disasters and to alleviate future
flood risk. Second supplemental amounts of $115 million for ECP and $100 million for the
EWPP were provided under the Consolidated Security, Disaster Assistance, and Continuing
Appropriations Act of 2009 (P.L. 110-329).15 No emergency supplemental disaster assistance was
authorized for 2008 crop and livestock losses, since new programs were authorized and funded
through the 2008 farm bill, as described above.
American Recovery and Reinvestment Act of 2009
The enacted American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) contains
provisions worth $744 million, as estimated by CBO, to directly assist farmers, including $674
million for crop disaster programs (primarily SURE). The SURE program changes affect 2008
crop payments by altering the payment formula and program dates.
The enacted ARRA also authorizes a new $50 million grant program for aquaculture producers to
compensate them for their share of high feed prices in 2008. Under the Aquaculture Grant
Program, USDA’s Farm Service Agency provides grants to state governments for distribution to
farmers. USDA implemented the program through a notice of funds availability published in the
Federal Register on June 2, 2009.16 State departments of agriculture began announcing program
availability on June 18, 2009.17
The final component of ARRA related to farm disaster assistance is $20 million in budget
authority (loan subsidy) for the Farm Service Agency to support $173 million in direct farm
15
U.S. Department of Agriculture, Farm Service Agency, FY2010 USDA Budget Explanatory Notes for Committee on
Appropriations, Farm Service Agency, June 3, 2009, p. 68, http://www.obpa.usda.gov/18fsa2010notes.pdf.
16
For the notice and additional information on the program, see http://www.fsa.usda.gov/FSA/webapp?area=home&
subject=landing&topic=aqua.
17
Florida Department of Agriculture and Consumer Services, “Bronson Announces 2008 Aquaculture Grant Program,”
press release, June 18, 2009, http://www.doacs.state.fl.us/press/2009/06182009.html.
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Agricultural Disaster Assistance
operating loans. FSA lends to farmers and ranchers who are not able to obtain credit from
commercial lenders.
For more information on ARRA, see CRS Report R40160, Agriculture, Nutrition, and Rural
Provisions in the American Recovery and Reinvestment Act (ARRA) of 2009, coordinated by Jim
Monke.
Disaster Assistance for 2009 Losses
Following losses to 2009 crops due to excessive rain across much of the country, legislation was
introduced in late 2009 in both chambers (S. 2810 and H.R. 4177) to make emergency payments
to producers for losses in calendar year 2009. The bills were referred to committees in both
chambers. Proponents have argued that the SURE program has not effectively covered losses for
some farmers, particularly rice and cotton producers.18 Agricultural disaster provisions were
eventually included in a “tax extenders” package that both chambers passed but failed to
reconcile. Subsequent efforts to include disaster provisions in other legislation were unsuccessful.
In August 2010, the Administration wrote Senator Lincoln—who had led efforts to secure
additional disaster assistance—committing to administratively provide emergency payments to
producers consistent with proposed legislation. 19 On September 15, 2010, the Administration
announced that it would implement a disaster program for 2009 losses under “Section 32”
authority. 20 USDA notes that Section 32 can be used to “reestablish the purchasing power of
farmers” and has been used previously for disaster relief.
USDA expects to spend up to $630 million distributed across three categories: (1) $550 million
for payments to producers of rice, soybeans, sweet potatoes, and cotton who suffered at least a
5% loss in certain disaster-designated counties,21 (2) $60 million to poultry producers who lost a
contract due to the bankruptcy of an integrator (processor), and (3) $20 million to aquaculture
producers who need relief from high feed costs. Eligible counties are those designated as primary
disaster counties by the Secretary due to high precipitation or moisture conditions in 2009.
Critics of the 2009 disaster assistance in Congress and elsewhere have questioned whether USDA
has authority to make such payments without a legislative mandate and say it could result in a
windfall to some producers given the relatively low loss threshold. Normal variation in crop
18
Rice producers have said their 2009 losses are not covered well by the SURE program because the monetary losses
stemmed primarily from wet weather at harvest that increased harvesting costs rather than from lower yields (which
would have more likely resulted in SURE payments). Also, rice and cotton farmers tend to carry less crop insurance
because they say it “doesn't work as well as for other crops,” which reduces the likelihood of SURE payments (a higher
coverage level purchased by a farmer results in a higher SURE program guarantee level).
19
The letter from the Office of Management and Budget to Senator Lincoln, dated August 6, 2010, is available at
http://www.farmpolicy.com/wp-content/uploads/2010/08/OMB216Sharp_omb_eop_gov_20100806_083106.pdf.
20
USDA’s Section 32 program is funded by a permanent appropriation of 30% of the previous year’s customs receipts,
less certain mandatory transfers. Section 32 funds are used for a variety of activities, including child nutrition
programs, the purchase of commodities for domestic food programs, and farm disaster relief. For more information, see
CRS Report RL34081, Farm and Food Support Under USDA’s Section 32 Program, by Melissa D. Ho.
21
On October 22, 2010, USDA announced it would begin making payments under the “Crop Assistance Program
(CAP)” using payment rates established for each crop. For each eligible crop, producers who certify a loss of 5% or
greater in 2009 will receive a payment based on the payment rate multiplied by actual planted (or prevented planted)
acres.
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Agricultural Disaster Assistance
yields can be more than 5%. As a result, payments could go to producers who had experienced
little or no loss from weather-related disasters. Also, critics charge that the assistance will result in
unequal treatment of producers, particularly those who suffered losses but produce a non-covered
crop or are not located in a designated county.
Author Contact Information
Dennis A. Shields
Specialist in Agricultural Policy
dshields@crs.loc.gov, 7-9051
Congressional Research Service
Ralph M. Chite
Section Research Manager
rchite@crs.loc.gov, 7-7296
914
See USDA fact sheet at http://www.fsa.usda.gov/Internet/FSA_File/lip09.pdf. Also see Farm Service Agency and
Commodity Credit Corporation, USDA, “Livestock Indemnity Program and General Provisions for Supplemental
Agricultural Disaster Assistance Programs,” 74 Federal Register 31567-31578, July 2, 2009.
15
See USDA fact sheet at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=diap&topic=lfp. Also see Farm
Service Agency, USDA, “Livestock Forage Disaster Program and Emergency Assistance for Livestock, Honeybees,
and Farm-Raised Fish; Supplemental Agricultural Disaster Assistance,” 74 Federal Register 46665-46683, September
11, 2009.
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Agricultural Disaster Assistance
(3) 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;16 and (4) 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.17 Disaster payments by program,
year, and state are available from USDA’s disaster assistance program website.18
For individual producers, combined payments under SURE, LIP, LFP, and ELAP may not exceed
$100,000. For TAP, a separate limit of $100,000 per year per producer applies. Also, to be eligible
for payment, a producer’s nonfarm adjusted gross income cannot exceed $500,000.
Issues for Congress
As of mid-January 2013, Congress had not provided funding for the disaster programs established
in the 2008 farm bill for any losses after September 30, 2011. In contrast, the permanently
authorized disaster-related programs (federal crop insurance, the Noninsured Crop Disaster
Assistance Program, and emergency disaster loans) will continue to be available to farmers. Some
policymakers are concerned for livestock producers who might not benefit from crop insurance
coverage (i.e., reimbursing forage losses) or who are facing high feed prices caused in part by
drought in 2012.
The 112th Congress considered but did not pass omnibus five-year farm legislation (S. 3240 and
H.R. 6083), including the retroactive extension of the expired livestock and tree assistance
disaster programs (but not SURE, the crop loss program). The Senate passed S. 3240 in June
2012. The House Agriculture Committee passed H.R. 6083 in July 2012. On January 2, 2013, the
2008 farm bill was extended one year as part of the American Taxpayer Relief Act of 2012
(ATRA; P.L. 112-240), but without any funding for the 2008 farm bill disaster programs.
Many of the disaster provisions in the two farm bills from the 112th Congress were the same,
reflecting the popularity of the livestock and tree loss provisions. (See Table 1.) Similar disaster
provisions might be considered as part of farm bill deliberations in the 113th Congress.
Importantly, available funding for extending the 2008 farm bill disaster programs is a major issue.
Under congressional budget scoring, the programs do not have “baseline funding” to cover losses
from weather events occurring after September 30, 2011.19 This means that if Congress wants to
reactivate them, it will need to find budget offsets to pay for them or consider it emergency
spending. For example, the Congressional Budget Office cost estimate for H.R. 6233 in the 112th
Congress, which would have funded the three livestock disaster programs and the tree assistance
program for FY2012, was $383 million. The House-passed bill would have paid for the cost
through reductions in conservation programs. In the 112th Congress, both the Senate-passed and
16
See Farm Service Agency, USDA, “Livestock Forage Disaster Program and Emergency Assistance for Livestock,
Honeybees, and Farm-Raised Fish; Supplemental Agricultural Disaster Assistance,” 74 Federal Register 46665-46683,
September 11, 2009. A USDA factsheet is available at http://www.fsa.usda.gov/Internet/FSA_File/
elap_livestock_2011.pdf.
17
See USDA fact sheet at http://apfo.usda.gov/Internet/FSA_File/tap051010.pdf.
18
http://www.fsa.usda.gov/FSA/webapp?area=home&subject=diap&topic=landing.
19
Payments are made on disasters occurring by that date.
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House committee-reported farm bills would have offset the cost of the disaster programs with
savings provided elsewhere in the bills.
A broader policy issue is the efficacy of risk-related programs for farmers. Congress, as part of
the farm bill debate, is considering how the constellation of government programs, including
disaster assistance, helps farmers manage their business risks in a cost-effective manner.20
20
For more information on these programs and issues for the farm bill debate, see CRS Report R42552, The 2012 Farm
Bill: A Comparison of Senate-Passed S. 3240 and the House Agriculture Committee’s H.R. 6083 with Current Law,
and CRS Report R42759, Farm Safety Net Provisions in a 2012 Farm Bill: S. 3240 and H.R. 6083.
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Table 1. Agricultural Disaster Provisions in Selected Bills of the 112th Congress
2008 Farm Bill: Disaster Provisions
(Expired on 9/30/11)
Senate-Passed Farm Bill (S. 3240)
House Agric.
Comm. Farm
Bill, as amended
(H.R. 6083)
House-Passed
Agriculture Disaster
Assistance Act of 2012
(H.R. 6233)
Beginning in 2008, five new disaster
programs were authorized for disasters
occurring on or before 9/30/11. [7 U.S.C.
1531] Program funding derived from a
transfer of 3.08% of annual customs
receipts to the newly created Agricultural
Disaster Relief Trust Fund. [19 U.S.C.
2497(a)]
LIP, LFP, ELAP, and TAP are reauthorized
with mandatory funding from the
Commodity Credit Corporation for
FY2012 through FY2017. SURE is not
reauthorized. Excludes crop insurance or
NAP purchase requirement. [Sec. 1501]
Same as Senate bill,
except as identified
below. [Sec. 1501]
Reauthorizes the four
disaster programs as in the
Senate bill but only for
FY2012 and with other
exception as identified
below. [Sec. 2]
The five programs: (1) Supplemental
Revenue Assistance (SURE) Payments for
crops (not just farm program crops);
compensates producers for a portion of
losses that are not eligible for an
indemnity payment under a crop
insurance policy; (2) Livestock Indemnity
Program (LIP), which compensated
ranchers at a rate of 75% of market value
for livestock mortality caused by a
disaster; (3) Livestock Forage Disaster
Program (LFP) for grazing losses due to
qualifying drought conditions (as
determined by the U.S. Drought Monitor
report) or fire on rangeland managed by a
federal agency; (4) Emergency Assistance
for Livestock, Honeybees, and FarmRaised Catfish (ELAP), which provided up
to $50 million annually to compensate
producers for disaster losses not covered
under other disaster programs; and (5)
Tree Assistance Program (TAP), which
provided payments to eligible orchardists
and nursery growers to cover 70% of the
cost of replanting trees or nursery stock
and 50% of the cost of pruning/removal
following a natural disaster. To be eligible
for all programs except LIP, producers
must purchase crop insurance or policy
under Noninsured Crop Disaster
Program (NAP).
LIP payment rate is reduced from 75% to
65% of the market value of livestock.
LIP payment rate
remains at 75%.
LIP payment rate remains
at 75%.
For LFP, payment is triggered by eligible
forage losses, which may be determined
by either (1) drought conditions as
measured by the U.S. Drought Monitor
report, or (2) low precipitation (at least
50% below normal level in a county during
a calendar year). Compared with previous
law, payment amount for counties in D3
category (extreme drought) is increased
by an additional monthly payment
(monthly payment rate calculation is
unchanged). Coverage continues for
losses due to fire on public rangeland. LFP
is to serve as the sole source of livestock
forage assistance, combining the livestock
forage assistance functions of ELAP and
the noninsured crop disaster assistance
program (NAP).
For LFP, retains
2008 farm bill
language for use of
drought monitor
and payment
amounts.
For LFP, same as House
bill.
Maximum funding for ELAP is $5 million
annually.
Maximum funding
for ELAP is $20
million annually.
Maximum funding for ELAP
is $20 million for FY2012.
TAP payment rate for replanting is
reduced from 70% to 65%.
Same as Senate bill.
TAP payment rate is
unchanged from previous
law at 70%.
Maximum payments set at $100,000 per
person per year for first four programs
combined. TAP has a separate limit of
$100,000.
Retains the combined $100,000 per
person payment limit for LIP, LFP, and
ELAP. Retains the separate limit of
$100,000 for TAP.
Combined payment
limit of $125,000
per person for LIP,
LFP, and ELAP.
Separate limit of
$125,000 for TAP.
Same as Senate bill.
Source: CRS Report R42552, The 2012 Farm Bill: A Comparison of Senate-Passed S. 3240 and the House Agriculture
Committee’s H.R. 6083 with Current Law.
Note: Program details for SURE, LIP, LFP, ELAP, and TAP are available at http://www.fsa.usda.gov/FSA/webapp?area=
home&subject=diap&topic=landing.
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Appendix A. Brief History of Recent Emergency
Farm Disaster Assistance
In virtually every crop year between 1988 and 2007, Congress provided ad hoc disaster assistance
to farmers and ranchers with significant weather-related production losses. Ad hoc assistance was
made available primarily through emergency supplemental appropriations to a wide array of
USDA programs.21
While disaster programs authorized in the 2008 farm bill were meant to replace the need for ad
hoc payments, it is an open question whether Congress will continue to pass additional
emergency payments for producers or how Congress might provide disaster assistance to
livestock producers, who are generally not eligible for other forms of federal agricultural disaster
assistance. The sections below describe congressional and administrative action on emergency
funding and disaster-related activities since 2009.
American Recovery and Reinvestment Act of 2009
The enacted American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) contained
provisions worth $744 million, as estimated by CBO, to directly assist farmers, including $674
million for crop disaster programs (primarily SURE). The SURE program changes affected 2008
crop payments by altering the payment formula and program dates.
The enacted ARRA also authorized a new $50 million grant program for aquaculture producers to
compensate them for their share of high feed prices in 2008. Under the Aquaculture Grant
Program, USDA’s Farm Service Agency provided grants to state governments for distribution to
farmers. USDA implemented the program through a notice of funds availability published in the
Federal Register on June 2, 2009.22
The final component of ARRA related to farm disaster assistance was $20 million in budget
authority (loan subsidy) for the Farm Service Agency to support $173 million in direct farm
operating loans. FSA lends to farmers and ranchers who are not able to obtain credit from
commercial lenders.
Disaster Assistance for 2009 Losses
Following losses to 2009 crops due to excessive rain across much of the country, legislation was
introduced in the 111th Congress (S. 2810 and H.R. 4177) to make emergency payments to
producers for losses in calendar year 2009. The bills were referred to committees in both
chambers. Proponents argued that the SURE program was not effectively covering losses for
21
For a history of the congressional response to agricultural disasters, see CRS Report RL31095, Emergency Funding
for Agriculture: A Brief History of Supplemental Appropriations, FY1989-FY2012, by Ralph M. Chite.
22
For the notice and additional information on the program, see http://www.fsa.usda.gov/FSA/webapp?area=home&
subject=landing&topic=aqua. State departments of agriculture began announcing program availability on June 18,
2009. For example, see Florida Department of Agriculture and Consumer Services, “Bronson Announces 2008
Aquaculture Grant Program,” press release, June 18, 2009.
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some farmers, particularly rice and cotton producers.23 Agricultural disaster provisions were
eventually included in a “tax extenders” package that both chambers passed but failed to
reconcile. Subsequent efforts to include disaster provisions in other legislation were unsuccessful.
In August 2010, the Administration wrote Senator Lincoln—who had led efforts to secure
additional disaster assistance—committing to administratively provide emergency payments to
producers consistent with proposed legislation.24 On September 15, 2010, the Administration
announced that it would implement a disaster program for 2009 losses under “Section 32”
authority.25 USDA noted that Section 32 can be used to “reestablish the purchasing power of
farmers” and has been used previously for disaster relief. In fall 2010, USDA spent $348 million
distributed across three categories: (1) $268 million for payments to producers of upland cotton,
rice, soybeans, and sweet potatoes who suffered at least a 5% loss in certain disaster-designated
counties;26 (2) $60 million to poultry producers who lost a contract due to the bankruptcy of an
integrator (processor); and (3) $20 million to aquaculture producers for relief from high feed
costs.
Critics of the 2009 disaster assistance in Congress and elsewhere questioned whether USDA had
authority to make such payments without a legislative mandate and said the assistance could
result in a windfall to some producers, given the relatively low loss threshold. Normal variation in
crop yields can be more than 5%. As a result, payments could go to producers who had
experienced little or no loss from weather-related disasters. Also, critics charged that the
assistance resulted in unequal treatment of producers, particularly those who suffered losses but
produced a noncovered crop or were not located in a designated county.
USDA and Congressional Action in 2011
In 2011, adverse weather affected many agricultural producing regions. Drought spread across the
Central and Southern Plains; wet weather slowed and prevented crop planting in the Midwest and
Northern Plains; and excessive summer heat stressed crops and livestock in various parts of the
country. In response, USDA encouraged producers to contact their local county or state USDA
Service Center or Farm Service Agency office for assistance under existing programs. Many
producers also received indemnities from their crop insurance policies. Total crop insurance
23
Rice producers have said their 2009 losses are not covered well by the SURE program because the monetary losses
stemmed primarily from wet weather at harvest that increased harvesting costs rather than from lower yields (which
would have more likely resulted in SURE payments). Also, rice and cotton farmers tend to carry less crop insurance
because they say it “doesn't work as well as for other crops,” which reduces the likelihood of SURE payments (a higher
coverage level purchased by a farmer results in a higher SURE program guarantee level).
24
The letter from the Office of Management and Budget to Senator Lincoln, dated August 6, 2010, is available at
http://www.farmpolicy.com/wp-content/uploads/2010/08/OMB216Sharp_omb_eop_gov_20100806_083106.pdf.
25
USDA’s Section 32 program is funded by a permanent appropriation of 30% of the previous year’s customs receipts,
less certain mandatory transfers. Section 32 funds are used for a variety of activities, including child nutrition
programs, the purchase of commodities for domestic food programs, and farm disaster relief. For more information, see
CRS Report RL34081, Farm and Food Support Under USDA’s Section 32 Program.
26
On October 22, 2010, USDA announced it would begin making payments to producers in eligible counties under the
“Crop Assistance Program (CAP)” using payment rates established for each crop. For each eligible crop, producers
who certify a loss of 5% or greater in 2009 will receive a payment based on the payment rate multiplied by actual
planted (or prevented planted) acres. Eligible counties are those designated as primary disaster counties by the
Secretary due to high precipitation or moisture conditions in 2009. A factsheet is available at http://www.fsa.usda.gov/
Internet/FSA_File/cap10pfs.pdf.
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indemnities for the crop year were $10.8 billion, compared with total crop-year figures of $4.3
billion in 2010 and $5.2 billion in 2009.
While Congress did not authorize additional farm disaster payments, poor weather in 2011—
particularly hurricane aftermath in the northeastern United States—led to emergency
congressional funding for three USDA disaster-related conservation programs. The FY2012
Agriculture Appropriations Act (P.L. 112-55) provided $122.7 million for the Emergency
Conservation Program (ECP), which offers financial and technical assistance to rehabilitate
farmland and conservation practices destroyed by natural disasters (e.g., flood, fire, drought). The
legislation also provided $28.4 million for the Emergency Forest Restoration Program (EFRP),
which offers assistance to nonindustrial private forestland owners to restore forestland following
a natural disaster. P.L. 112-55 also provided $215.9 million for the Emergency Watershed
Protection (EWP) program, which provides financial and technical assistance to relieve imminent
hazards to life and property caused by floods, fires, storms, and other natural occurrences. For
more information on these programs, see CRS Report R40763, Agricultural Conservation: A
Guide to Programs, by Megan Stubbs.
USDA Action in 201227
In the midst of a major drought, on July 11, 2012, USDA announced several program changes
designed to deliver faster and more flexible assistance to farmers and ranchers devastated by
natural disasters.28 The first change was a final rule that simplifies the process for secretarial
disaster designations and aims to achieve a 40% reduction in processing time for most counties
affected by disasters. The second was a reduced interest rate for emergency loans that effectively
lowers the current rate from 3.75% to 2.25%. USDA also authorized emergency haying and
grazing on Conservation Reserve Program (CRP) acres for 2012 due to drought conditions.
USDA announced a smaller reduction (10% instead of the 25% used in recent years) on rental
payments made to producers on CRP lands used for emergency haying and grazing in 2012.29
On July 23, 2012, USDA announced further program changes to allow flexibility in the
administration of several conservation programs (CRP; the Environmental Quality Incentives
Program, or EQIP; and the Wetlands Reserve Program, or WRP) to assist farmers and ranchers
affected by drought.30 The changes included (1) allowing lands that are not yet classified as
“under severe drought” but that are “abnormally dry” to be used for haying and grazing; (2)
allowing producers to modify current EQIP contracts to allow for prescribed grazing, livestock
watering facilities, water conservation, and other conservation activities to address drought
conditions; and (3) haying and grazing of WRP easement areas in drought-affected areas where
27
USDA’s collection of drought resources (e.g., maps, weather updates, farm and food impacts) is at
http://www.usda.gov/wps/portal/usda/usdahome?navid=DISASTER_ASSISTANCE.
28
U.S. Department of Agriculture, “USDA Announces Streamlined Disaster Designation Process with Lower
Emergency Loan Rates and Greater CRP Flexibility in Disaster Areas,” press release, July 11, 2012,
http://www.fsa.usda.gov/FSA/newsReleases?area=newsroom&subject=landing&topic=ner&newstype=newsrel&type=
detail&item=nr_20120711_rel_0228.html.
29
Producers enrolled in CRP establish long-term, resource-conserving covers (e.g., grass) to improve the quality of
water, control soil erosion, and enhance wildlife habitat. In return, FSA provides participants with rental payments and
cost-share assistance.
30
U.S. Department of Agriculture, “Agriculture Secretary Vilsack Announces New Obama Administration Efforts to
Assist Farmers and Ranchers Impacted by Drought,” press release, July 23, 2012, http://usda.gov/wps/portal/usda/
usdahome?contentidonly=true&contentid=2012/07/0247.xml.
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such haying and grazing is consistent with conservation of wildlife habitat and wetlands.
Separately, USDA also encouraged crop insurance companies to voluntarily forgo charging
interest on unpaid crop insurance premiums for an extra 30 days, to November 1, 2012, for spring
crops. On August 1, 2012, USDA announced that crop insurance companies had agreed to the
request.31
Additional administrative action continued in August, when USDA announced that it was using
$30 million in financial and technical assistance to help crop and livestock producers, including
transferring $14 million in unobligated program funds into the Emergency Conservation Program
for moving water to livestock, providing emergency forage, and rehabilitating lands impacted by
drought.32 On August 13, 2012, USDA announced intentions under Section 32 funding to
purchase $170 million of meat, including pork ($100 million), lamb ($10 million), chicken ($50
million), and catfish ($10 million) for federal food nutrition assistance programs, including food
banks.33 According to USDA, the purchase would help relieve pressure on livestock producers
during the drought, while helping to bring the nation’s meat supply in line with demand. USDA
said the purchases would mitigate downward price pressure resulting from producers selling
livestock for slaughter during the current drought.
Unlike in previous years, the Administration’s use of Section 32 funds and the Commodity Credit
Corporation Charter Act is not allowed for direct farm disaster assistance in FY2012. The
FY2012 Agriculture Appropriations Act (P.L. 112-55) includes a provision that effectively
prohibits USDA’s use of these authorities for making direct disaster payments to farmers:
none of the funds appropriated or otherwise made available by this or any other Act shall be used
to pay the salaries or expenses of any employee of the Department of Agriculture or officer of the
Commodity Credit Corporation to carry out clause 3 of Section 32 of the Agricultural Adjustment
Act of 1935 (P.L. 74-320, 7 U.S.C. 612c, as amended) or for any surplus removal activities or
price support activities under section 5 of the Commodity Credit Corporation Charter Act.34
Congressional Action in 2012
Several congressional attempts were made during 2012 to pass agricultural disaster assistance.
None was successful.
31
U.S. Department of Agriculture, “Agriculture Secretary Vilsack Announces New Drought Assistance, Designates an
Additional 218 Counties as Primary Natural Disaster Areas,” press release, August 1, 2012, http://www.usda.gov/wps/
portal/usda/usdamediafb?contentid=2012/08/0260.xml&printable=true&contentidonly=true.
32
U.S. Department of Agriculture, “Agriculture Secretary Vilsack, Obama Administration Deliver New Drought
Assistance to America’s Producers,” press release, August 8, 2012, http://www.fsa.usda.gov/FSA/printapp?fileName=
nr_20120808_rel_0265.html&newsType=newsrel.
33
U.S. Department of Agriculture, “Agriculture Secretary Vilsack Announces Meat Purchase to Assist Livestock
Producers Impacted by Drought; Bolster Federal Nutrition Programs,” press release, August 13, 2012,
http://www.usda.gov/wps/portal/usda/usdamediafb?contentid=2012/08/0271.xml&printable=true&contentidonly=true.
Additional information appears in U.S. Department of Agriculture, “USDA Expands Drought Assistance to 22,” press
release, September 19, 2012. http://www.usda.gov/wps/portal/usda/usdahome?contentid=2012/09/0300.xml&navid=
NEWS_AUSUMS&navtype=RT&parentnav=SAFETY&edeployment_action=retrievecontent
34
Clause 3 of Section 32 provides that these funds shall be used to re-establish farmers’ purchasing power by making
payments in connections with the normal production of any agricultural commodity for domestic consumption (7.U.S.C
612c). See CRS Report R41964, Agriculture and Related Agencies: FY2012 Appropriations, coordinated by Jim
Monke.
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A major drought arrived in summer 2012 at the same time as congressional consideration of
omnibus farm legislation, including extension of certain agricultural disaster programs that
expired in September 2011.35 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 would
have retroactively extended the four livestock and tree assistance programs, thereby potentially
covering losses associated with the drought affecting a large portion of the country. The bill
would not have extended the Supplemental Revenue Assistance (SURE) program for crop losses.
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), including
the same four disaster programs as in the Senate bill. See “Issues for Congress” for a comparison
of disaster provisions in these two bills.
Next, on July 27, 2012, the House Agriculture Committee released legislation (H.R. 6228) to
extend the four disaster programs (excluding SURE) 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
extension of the farm bill). On August 2, 2012, the House passed H.R. 6233 by a vote of 223-197.
By the end of the 112th Congress, the Senate had not considered the bill.
Other stand-alone farm disaster legislation was also proposed in 2012. For example, S. 3384 and
H.R. 6167 would have extended through September 30, 2012, the supplemental agricultural
disaster programs in the 2008 farm bill. S. 3395 would have extended the four expired livestock
and tree assistance disaster programs, assisting farmers and ranchers affected by wildfires,
through FY2012.36 H.R. 6192 would have extended the three livestock disaster programs for
FY2012, while H.R. 4948 would extend them through FY2017.
Rather than passing farm disaster legislation, some Members of Congress and agricultural interest
groups had called on the House leadership to bring H.R. 6083 (the House committee-reported
farm bill) to the House floor in order to expedite passage of the disaster provisions as part of the
omnibus farm bill. The bill was not brought to the House floor, and instead, on January 2, 2013,
the 2008 farm bill was extended one year under the American Taxpayer Relief Act of 2012
(ATRA; H.R. 8 as enacted), but without funding for the 2008 farm bill disaster programs.
In the 112th Congress, another potential avenue for extending agricultural disaster assistance was
included in a supplemental appropriations bill for Hurricane Sandy. Proposed legislation at the
end of the 112th Congress (the Senate-amended H.R. 1) included emergency conservation and
watershed rehabilitation funding but not agricultural disaster funding. A Senate amendment to the
bill would have provided agricultural disaster assistance but the amendment was withdrawn
because it did not offset the disaster funding with cuts elsewhere, and the Senate was not willing
to waive budget rules to allow the spending to raise the deficit.
In the 113th Congress, a comparable disaster package was passed by the House (H.R. 152), which
included the emergency conversation provisions and no agricultural disaster funds. Senate action
is pending.
35
See CRS Report R42552, The 2012 Farm Bill: A Comparison of Senate-Passed S. 3240 and the House Agriculture
Committee’s H.R. 6083 with Current Law.
36
For information on wildfires, see CRS Report R41858, Federal Assistance for Wildfire Response and Recovery.
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Author Contact Information
Dennis A. Shields
Specialist in Agricultural Policy
dshields@crs.loc.gov, 7-9051
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