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Agricultural Disaster Assistance

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Agricultural Disaster Assistance Dennis A. Shields Specialist in Agricultural Policy August 29, 2013May 6, 2014 Congressional Research Service 7-5700 www.crs.gov RS21212 CRS Report for Congress Prepared for Members and Committees of Congress Agricultural Disaster Assistance Summary 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 disasters, including drought and floods. All the programs have permanent authorization, and only one requires a federal disaster designation (the emergency loan program). Most programs receive funding amounts that are “such sums as necessary” and are not subject to annual discretionary appropriations. The federal crop insurance program offers subsidized policies designed to protect crop producers from unavoidable risks associated with adverse weather, and weather-related plant diseases and insect infestations. Producers who grow a crop that is currently ineligible for crop insurance may be eligible for a payment under NAP. Under the emergency disaster (EM) loan program, when a county has been declared a disaster area by either the President or the Secretary of Agriculture, agricultural producers in that county may become eligible for low-interest loans. In order to provide a regular supplement to crop insurance and NAP payments and to assist livestock producers who are generally not covered by these programs, the Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill) included authorization and funding for five new disaster programs to cover losses from weather events, beginning with 2008 crops and ending September 30, 2011. The 2008 farm bill programs were designed to address the ad hoc nature of disaster assistance provided to producers during the last two decades. The largest of the now-expired programs under the 2008 farm bill is the Supplemental Revenue Assistance Payments Program (SURE), which is designed to compensate eligible producers for a portion of crop losses that are not eligible for an indemnity payment under the crop insurance program. The 2008 farm bill also authorized the Tree Assistance Program (TAP), under which eligible orchardists and nursery growers can receive a payment to cover 70% of the cost of replanting trees or nursery stock following a natural disaster, and three livestock assistance programs. These are (1) the Livestock Indemnity Program (LIP), which compensates ranchers at a rate of 75% of market value for livestock mortality caused by a disaster; (2) the Livestock Forage Disaster Program (LFP), to assist ranchers who graze livestock on drought-affected pastureland or grazing land; and (3) the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP), which provides up to $50 million annually to compensate these producers for disaster losses not covered under other disaster programs. As of August 6, 2013, cumulative payments under these programs totaled $5.8 billion, as claims continue to be processed for losses in 2011. The 112th Congress considered but did not pass omnibus farm legislation, including extension of certain agricultural disaster programs that expired in September 2011. Instead, at the end of the 112th Congress, on January 2, 2013, the five-year 2008 farm bill was extended one year as part of the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240), but without funding for any of the 2008 farm bill disaster programs. With expiration of the farm bill (as extended under ATRA) approaching again, the 113th Congress has been considering an omnibus farm bill with agricultural disaster provisions. The full Senate passed its version of the bill (S. 954) on June 10, 2013. On June 20, 2013, the full House voted to reject the House Agriculture Committee-reported bill (H.R. 1947). Three weeks later, the House approved H.R. 2642, a similar farm bill but without a Nutrition title as in the Senate bill. Conference on the two measures is pending. Both the Senate and House farm bills would retroactively authorize and fund the livestock disaster and tree assistance programs, thereby potentially covering losses associated with the 2012 drought and other weather events through FY2018. Congressional Research Service Agricultural Disaster Assistance Congressional Research Service Agricultural Disaster Assistance Contents Recent Developments ...................................................................................................................... 1 Major USDA Disaster Assistance Programs .................................................................................... 3 Federal Crop Insurance.............................................................................................................. 3 Noninsured Crop Disaster Assistance Program (NAP) ............................................................. 4 Emergency Disaster Loans ........................................................................................................ 5 2008 Farm Bill Disaster Programs................................................................................................... 6 Supplemental Revenue Assistance Payments Program (SURE) ............................................... 6 Other 2008 Farm Bill Disaster Programs .................................................................................. 7 Issues for Congress .......................................................................................................................... 8 Figures Figure 1. Drought Conditions Cover Much of the Western Half of the United States .................... 2 Tables Table 1. Agricultural Disaster Provisions in 2013 Farm Bills of the 113th Congress..................... 10 Appendixes Appendix A. Brief History of Recent Emergency Farm Disaster Assistance ................................ 11 Contacts Author Contact Information........................................................................................................... 16 Congressional Research Service Agricultural Disaster Assistance 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. 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) 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, including three programs for livestock (and other) assistance, one for tree assistance, and one for crop disaster assistance. As of late August 2013, 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 the potential reauthorization of disaster programs proposed in both House and Senate versions of the 2013 farm bill. An appendix reviews the recent history of emergency supplemental farm disaster assistance and USDA administrative actions. 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. The primary federal response to the drought, though, was provided by federal crop insurance, which does not depend on disaster declarations. Insured producers suffering 2012 losses (e.g., drought) received indemnities from federal crop insurance policies totaling more than $17 billion. In areas where crop insurance is not available, producers who had purchased a catastrophic policy under the Noninsured Crop Disaster Assistance Program (NAP) received a payment for losses in 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. Congressional Research Service 1 Agricultural Disaster Assistance excess of 50%. See “Major USDA Disaster Assistance Programs,” below for program details.3 Livestock producers generally are not eligible for federal crop insurance, although crop insurance policies are available in some areas for insuring pasture, rangeland, and forage.4 In 2013, drought has continued across much of the Great Plains and western United States. In contrast, drought conditions had receded through mid-year in the eastern half the United States, including the primary corn- and soybean-producing regions. However, as of late August, drought has returned to parts of the Midwest, reducing crop prospects (Figure 1). Pasture and rangeland conditions have been adversely affected in many areas.5 As of June 26, 2013, the Secretary of Agriculture had issued drought designations for 981 primary counties and 286 contiguous counties. Figure 1. Drought Conditions Cover Much of the Western Half of the United States Source: Joint Agricultural Weather Facility (U.S. Department of Agriculture and Department of Commerce/National Oceanic and Atmospheric Administration), Climate Prediction Center (U.S. Department of Commerce/NOAA/National Weather Service), National Climatic Data Center (DOC/NOAA), and National Drought Mitigation Center (University of Nebraska-Lincoln). Note: For a map of the current USDA Secretarial drought designations, see http://www.usda.gov/documents/ usda-drought-fast-track-designations-062613.pdf 3 Also, a list of USDA disaster factsheets is available at http://www.fsa.usda.gov/Internet/FSA_File/ 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 U.S. Department of Agriculture, Weekly Weather and Crop Bulletin, Vol. 100, No. 27, Washington, DC, July 2, 2013, http://usda01.library.cornell.edu/usda/waob/weather_weekly//2010s/2013/weather_weekly-07-02-2013.pdf. Congressional Research Service 2 Agricultural Disaster Assistance 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 early July, 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.6 See “Issues for Congress” for proposed legislation that would reauthorize and fund livestock disaster and tree assistance programs as part of the 2013 farm bill. Major USDA Disaster Assistance Programs Federal Crop Insurance7 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 insect infestations. Policies must be purchased prior to the planting season. Eligible commodities include most major crops and many specialty crops (including fruit, tree nut, vegetable, and nursery crops), as well as forage and pastureland for livestock producers. The enacted 2014 farm bill (the Agricultural Act of 2014; P.L. 113-79) enhances the crop insurance program by expanding its scope, covering a greater share of farm losses, and making other modifications that broaden policy coverage. Producers who grow a crop that is currently ineligible for crop insurance may apply for the Noninsured Crop Disaster Assistance Program (NAP). 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. The 2014 farm bill also permanently authorizes three disaster programs for livestock and one for fruit trees, making nearly all parts of the U.S. farm sector covered by a standing disaster program. The programs cover losses beginning in FY2012. USDA began signup on April 15, 2014, ahead of other farm bill programs. Producers do not pay a fee to participate. The programs are: (1) the Livestock Indemnity Program (LIP), which provides payments to eligible livestock owners and contract growers at a rate of 75% of market value for livestock deaths in excess of normal mortality caused by adverse weather; (2) the Livestock Forage Disaster Program (LFP), which makes payments to eligible livestock producers who have suffered grazing losses on drought-affected pasture or grazing land, or on rangeland managed by a federal agency due to a qualifying fire; (3) the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP), which provides payments (capped at $20 million per year) to producers of livestock, honey bees, and farm-raised fish as compensation for losses due to disease, adverse weather, and feed or water shortages; and (4) the Tree Assistance Program (TAP), making payments to orchardists/nursery tree growers for losses in excess of 15% to replant trees, bushes, and vines damaged by natural disasters. Separately, for all types of farms and ranches, when a county has been declared a disaster area by either the President or the Secretary of Agriculture, producers in that county may become eligible for low-interest emergency disaster (EM) loans. USDA has several permanent disaster assistance programs that help producers repair damaged land following natural disasters. It also has authority (prohibited in FY2014) to issue disaster payments to farmers with funds from “Section 32” or the Commodity Credit Corporation (CCC). Finally, USDA can use a variety of existing programs to address disaster issues as they arise, such as allow emergency grazing on land enrolled in the Conservation Reserve Program. Congressional Research Service Agricultural Disaster Assistance Contents Federal Crop Insurance .................................................................................................................... 1 Noninsured Crop Disaster Assistance Program (NAP) ................................................................... 2 2014 Farm Bill Disaster Programs................................................................................................... 3 Livestock Indemnity Program (LIP).......................................................................................... 4 Livestock Forage Disaster Program (LFP) ................................................................................ 4 Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP) ................................................................................................................................... 5 Tree Assistance Program (TAP) ................................................................................................ 6 Emergency Disaster Loans .............................................................................................................. 6 Other USDA Assistance ................................................................................................................... 7 Emergency Agricultural Land Assistance Programs ................................................................. 7 “Section 32” and “CCC” Funds for Farm Disaster Payments ................................................... 8 Examples of Adjustments to Existing USDA Programs ............................................................ 9 Tables Table 1. Livestock Forage Program (LFP) ...................................................................................... 5 Contacts Author Contact Information........................................................................................................... 10 Congressional Research Service Agricultural Disaster Assistance T he U.S. Department of Agriculture (USDA) has at its disposal several programs designed to help farmers and ranchers recover from the financial effects of natural disasters. These are (1) federal crop insurance, (2) the Noninsured Crop Disaster Assistance Program (NAP), (3) livestock and fruit tree disaster programs, and (4) emergency disaster loans for both crop and livestock producers. All have permanent authorization, and the emergency loan program is the only one requiring a federal disaster designation. Most programs receive funding amounts of “such sums as necessary” and are not subject to annual discretionary appropriations. With enactment of the permanent livestock/fruit tree disaster programs in the 2014 farm bill (P.L. 113-79), nearly all segments of the U.S. farm sector are now covered by a standing disaster program. The array of federal programs reduces the potential need for emergency assistance that Congress has previously provided to farmers and ranchers in the form of ad hoc disaster payments.1 Federal Crop Insurance 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. Crop insurance is available for most major crops and many specialty crops (including fruit, tree nut, vegetable, and nursery crops), as well as forage and pastureland for livestock producers. 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. Insurance products that protect against loss in revenue (yield times price) are also available. Policies are typically available in major growing regions. 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 2006 and 2011, the federal subsidy to the crop 6 For more information, see CRS Report R42869, FY2013 Supplemental Funding for Disaster Relief. 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. 7 Congressional Research Service 3 Agricultural Disaster Assistance insurance program averaged $5.9 billion per year, up from an annual average of $3.0 billion during 2000-2005, $1.1 billion in the 1990s, and about $500 million in the 1980s. More 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, mainly because premium subsidies and company reimbursements are based on total premiums, and total premiums increased in tandem with farm commodity prices. 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 billion in FY2012cost of the crop insurance program averaged $5.9 billion per year, up from an annual average of $3.0 billion during 2000-2005. In 2012, high commodity prices drove up premiums subsidies and persistent drought resulted in large losses for the program. USDA estimated total program cost at $14.1 billion in FY2012. More favorable weather in 2013 reduced losses and reduced USDA’s estimated total program costs to $6.0 billion in FY2013. 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 rise. 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 1 Ad hoc assistance was made available primarily through emergency supplemental appropriations to a wide array of USDA programs. 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. Congressional Research Service 1 Agricultural Disaster Assistance 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.8 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. The enacted 2014 farm bill (the Agricultural Act of 2014; P.L. 113-79) enhances the federal crop insurance program by expanding its scope, covering a greater share of farm losses, and making other modifications that broaden policy coverage. A prominent feature of the legislation is authorization of policies designed to reimburse “shallow losses”—an insured producer’s out-ofpocket loss associated with the policy deductible. A new crop insurance policy called Stacked Income Protection Plan (STAX) is made available for upland cotton producers, while the Supplemental Coverage Option (SCO) is made available for other crops. For more information, see CRS Report R43494, Crop Insurance Provisions in the 2014 Farm Bill (P.L. 113-79). For additional background, see CRS Report R40532, Federal Crop Insurance: Background. Noninsured Crop Disaster Assistance Program 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 apply for the Noninsured Crop Disaster Assistance Program (NAP). NAP has permanent authority under Section 196 of the Federal Agriculture Improvement and Reform Act 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 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. 8 The 2008 farm bill (P.L. 110-246) increased the fee to $300 per crop per county from the existing $100 fee. Congressional Research Service 4 Agricultural Disaster Assistance an array of farm programs. Eligible crops under NAP include any commercial crops grown for food, 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 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 Congressional Research Service 2 Agricultural Disaster Assistance insurance, NAP applicants must also pay an administrative fee. The NAP fee is $250 per crop payable at the time of application (rising from $100 per crop, as required by the 2008 farm bill).9.2 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 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, $254 million in FY2012, and an estimated $300 million in FY2013.10 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.11 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 an interest rate of 2.25%. 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 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. 9 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. 11 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. 10 Congressional Research Service 5 Agricultural Disaster Assistance Loans for non-real estate purposes generally must be repaid within 1 to 7 years; loans for 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, funding for the program has been provided through emergency supplemental appropriations, 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) are typically less than $100 million per year.12 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 August 6, 2013, cumulative payments under these programs (all years) totaled $5.8 billion.13 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).14 The program 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 (i.e., the portion of losses that is part of the deductible 12 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. 13 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. 14 For more information on the SURE program, see CRS Report R40452, A Whole-Farm Crop Disaster Program: 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. Congressional Research Service 6 Agricultural Disaster Assistance 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 is 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 noninsurable crops.15 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 typically have been delayed by more than a year after the actual loss. The annual signup period reflects the delay. For example, USDA accepted applications for 2011 losses between October 22, 2012, and June 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;16 (2) Livestock Forage Disaster Program (LFP), to assist ranchers who graze livestock on drought-affected pastureland or grazing land;17 (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;18 and (4) Tree Assistance Program (TAP), under which 15 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. 16 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. 17 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. 18 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/ (continued...) Congressional Research Service 7 Agricultural Disaster Assistance 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.19 Disaster payments by program, year, and state are available from USDA’s disaster assistance program website.20 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 early July 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 and a continuation of drought conditions affecting pasture and rangeland in 2013. 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. The 113th Congress has been considering an omnibus farm bill. On May 14, 2013, the Senate Agriculture Committee reported its version of the bill (S. 954, the Agriculture Reform, Food, and Jobs Act of 2013), which was approved by the full Senate on June 10, 2013. On May 15, 2013, the House Agriculture Committee completed markup of its version of the bill (H.R. 1947, the Federal Agriculture Reform and Risk Management Act of 2013), and floor action began in midJune. However, on June 20, the full House voted to reject the bill. Three weeks later, the House approved H.R. 2642, a similar farm bill but without a Nutrition title as in the Senate bill. Conference on the two measures is pending. Many of the disaster provisions in the House and Senate farm bills from the 113th Congress were brought forward from the 112th Congress and are similar to each other, reflecting the popularity of the livestock and tree loss provisions. (See Table 1.) 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, 2011.21 This means that if Congress wants to (...continued) elap_livestock_2011.pdf. 19 See USDA fact sheet at http://apfo.usda.gov/Internet/FSA_File/tap051010.pdf. 20 http://www.fsa.usda.gov/FSA/webapp?area=home&subject=diap&topic=landing. 21 Payments are made on disasters occurring by that date. Congressional Research Service 8 Agricultural Disaster Assistance reauthorize them, it will need to find budget offsets to pay for them22 (or consider it emergency spending) or provide funding as part of the additional spending required for farm bill reauthorization. In both the 112th Congress and the 113th Congress, the Senate-passed and Housepassed farm bills would have offset the cost of the disaster programs with savings provided elsewhere in the bills. In the 113th Congress, CBO estimates the cost of reauthorizing the disaster programs at $3.7 billion in H.R. 1947 and $2.4 billion in S. 954.23 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.24 22 For example, the Congressional Budget Office cost estimated 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. 23 See CBO estimates of S. 954 (May 17, 2013, at http://cbo.gov/publication/44248), and H.R. 1947 (May 23, 2013, at http://cbo.gov/publication/44271); detailed cost estimate not available for H.R. 2642. 24 For more information on these programs and issues for the farm bill debate, see CRS Report R42759, Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642. For a summary of all titles, see CRS Report R43076, The 2013 Farm Bill: A Comparison of the Senate-Passed (S. 954) and House-Passed (H.R. 2642) Bills with Current Law. Congressional Research Service 9 Agricultural Disaster Assistance Table 1. Agricultural Disaster Provisions in 2013 Farm Bills of the 113th Congress 2008 Farm Bill: Disaster Provisions (Funding expired on 9/30/11) Senate-Passed 2013 Farm Bill (S. 954) House-Passed 2013 Farm Bill (H.R. 2642) Beginning in 2008, five new disaster programs were authorized and funded 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)] Under P.L. 112-240, all but SURE (below) reauthorized (but not funded) for FY2012 and FY2013. SURE is not reauthorized. Other four programs are reauthorized retroactively with mandatory funding from the Commodity Credit Corporation for FY2012 through FY2018. [Sec. 1501] Same as Senate bill, except programs are authorized and funded without an expiration date. [Sec. 1501] 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 Farm-Raised 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%. 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). The monthly payment rate is equal to 50% of estimated feed costs. 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). Producers may also receive assistance for eligible forage losses that occur due to weather-related conditions other than drought or fire. For LFP, retains program language in 2008 farm bill. In certain cases, farm payment amount is increased compared with program established in 2008 farm bill. For example, an eligible livestock producer that owns or leases grazing land or pastureland that is physically located in a county that is rated as having at least a D3 (extreme drought) intensity in any area of the county at any time during the normal grazing period for the county is eligible to receive assistance equal to 3 monthly payments compared with 2 monthly payments under the 2008 farm bill. Maximum funding for ELAP is $15 million annually. Maximum funding for ELAP is $20 million annually. TAP payment rate for replanting is reduced from 70% to 65%. Same as Senate bill. 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. No comparable provision. No comparable provision. Establishes a National Drought Council within USDA to develop a comprehensive National Drought Policy Action Plan for delineating and integrating responsibilities among federal agencies for drought preparedness, mitigation, research, risk management, training, and emergency relief. [Sec. 1502] Source: CRS Report R42759, Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642. 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. Congressional Research Service 10 Agricultural Disaster Assistance 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.25 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, 2009.26 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 25 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. 26 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. Congressional Research Service 11 Agricultural Disaster Assistance some farmers, particularly rice and cotton producers.27 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.28 On September 15, 2010, the Administration announced that it would implement a disaster program for 2009 losses under “Section 32” authority.29 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;30 (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 27 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). 28 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. 29 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. 30 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. Congressional Research Service 12 Agricultural Disaster Assistance 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. USDA Action in 201231 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.32 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 2012.33 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.34 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 31 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. 32 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. 33 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. 34 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. Congressional Research Service 13 Agricultural Disaster Assistance 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.35 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.36 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.37 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.38 Congressional Action in 2012 Several congressional attempts were made during 2012 to pass agricultural disaster assistance. None was successful. 35 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. 36 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. 37 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 38 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. Congressional Research Service 14 Agricultural Disaster Assistance 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 2011.39 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 FY2012.40 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. The Senate passed the bill without amendment on January 24, 2013, and it was signed into law as P.L. 113-2 on January 29, 2013. 39 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. 40 For information on wildfires, see CRS Report R41858, Federal Assistance for Wildfire Response and Recovery. Congressional Research Service 15 Agricultural Disaster Assistance Author Contact Information Dennis A. Shields Specialist in Agricultural Policy dshields@crs.loc.gov, 7-9051 Congressional Research Service 16 In order to expand coverage for specialty crops and others covered under NAP, the 2014 farm bill provides additional coverage at 50% to 65% of established yield and 100% of average market price. The farmer-paid fee for additional coverage is 5.25% times the product of the selected coverage level and value of production (acreage times yield times average market price). A producer of a noninsured crop is subject to a payment limit of $125,000 per person under NAP and is ineligible for a payment if the producer’s total adjusted gross income exceeds $900,000. The total federal cost of NAP was $234 million in FY2012 and $342 million in FY2013, and is estimated at $154 million for FY2014.3 2014 Farm Bill Disaster Programs Section 1501 of the 2014 farm bill (P.L. 113-79) permanently authorizes four agricultural disaster programs for livestock and fruit trees. They are (1) the Livestock Indemnity Program (LIP); (2) the Livestock Forage Disaster Program (LFP); (3) the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP); and (4) the Tree Assistance Program (TAP). The programs, originally established in the 2008 farm bill for only four years, have been authorized retroactively (with no expiration date) to cover losses beginning in FY2012.4 They operate nationwide and are administered by USDA’s Farm Service Agency. All programs except ELAP receive uncapped mandatory funding via the Commodity Credit Corporation. That is, LIP, LFP, and TAP receive “such sums as necessary” to reimburse eligible producers for their losses. ELAP is capped at $20 million per year. Livestock producers traditionally have not been covered by crop insurance or other forms of federal support, and the farm bill disaster programs have been designed to reimburse them for 2 For more on NAP, see the USDA factsheet at http://www.fsa.usda.gov/Internet/FSA_File/nap_august_2011.pdf. U.S. Department of Agriculture, http://www.obpa.usda.gov/26ccc2015notes.pdf. 4 A comparison of the disaster program provisions of the 2008 and 2014 farm bills is in CRS Report R43448, Farm Commodity Provisions in the 2014 Farm Bill (P.L. 113-79), by Dennis A. Shields. The largest of the farm disaster assistance programs authorized by the 2008 farm bill was the Supplemental Revenue Assistance Payments Program (SURE). The program was designed to 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). Given the complexity of the program and concerns about its effectiveness, the SURE program was not reauthorized in the 2014 farm bill. However, elements of it were included in the Agriculture Risk Coverage (ARC) program for “covered crops” (i.e., farm program crops) by offering producers a farm-level revenue guarantee on the combined crop revenue on each farm. 3 Congressional Research Service 3 Agricultural Disaster Assistance some of their financial losses due to weather events (and disease in the case of ELAP). Producers do not pay a fee to participate. For individual producers, combined payments under all programs (except TAP) may not exceed $125,000 per year. For TAP, a separate limit of $125,000 per year applies. Also, to be eligible for a payment, a producer’s total adjusted gross income cannot exceed $900,000. USDA issued its final rule for all four programs on April 14, 2014.5 Program signup began April 15, 2014. Producers can apply at their local Farm Service Agency office.6 Average annual federal payments under the 2008 farm bill were $38 million for LIP, $142 million per year for LFP, $10 million for ELAP, and $5 million for TAP. Livestock Indemnity Program (LIP) The Livestock Indemnity Program (LIP) provides payments to eligible livestock owners and contract growers for livestock deaths in excess of normal mortality caused by adverse weather. The 2014 farm bill added a provision to cover attacks by animals reintroduced into the wild by the federal government or protected by federal law. Eligible livestock include beef and dairy cattle, hogs, chickens, ducks, geese, turkeys, sheep, goats, alpacas, deer, elk, emus, and equine. The livestock must have been maintained for commercial use and not produced for reasons other than commercial use as part of a farming operation. The program excludes wild free-roaming animals, pets, and animals used for recreational purposes, such as hunting, roping, or for show. The LIP payment rate is equal to 75% of the market value of the animal. USDA publishes a payment rate for each type of livestock for each year (e.g., $1,223.45 per beef cow and $4.12 per duck in 2014).7 For eligible livestock contract growers, the payment rate is based on 75% of the average income loss sustained by the contract grower, less any monetary compensation received from the contractor for the loss of income. Livestock Forage Disaster Program (LFP) The Livestock Forage Disaster Program (LFP) makes payments to eligible livestock producers who have suffered grazing losses on drought-affected pastureland (including cropland planted specifically for grazing), or on rangeland managed by a federal agency due to a qualifying fire. Eligible producers must own, cash or share lease, or be a contract grower of covered livestock during the 60 calendar days before the beginning date of a qualifying drought or fire. They must also provide pastureland or grazing land for covered livestock that is either (a) physically located 5 Commodity Credit Corporation, U.S. Department of Agriculture, “Supplemental Agricultural Disaster Assistance Programs, Payment Limitations, and Payment Eligibility,” 79 Federal Register 21086-21118, April 14, 2014. 6 For local Farm Service Agency contact information, see http://offices.sc.egov.usda.gov/locator/app?agency=fsa. 7 Payment rates are available in the USDA fact sheet at http://www.fsa.usda.gov/Internet/FSA_File/ lip_long_fact_sht_2014.pdf. For more information, see 7 C.F.R. §1416 Subpart D—Livestock Indemnity Program; and Also, program details and producer examples for all livestock disaster programs are in the USDA/FSA handbook, http://www.fsa.usda.gov/Internet/FSA_File/1-ldap_r01_a01.pdf. Congressional Research Service 4 Agricultural Disaster Assistance in a county affected by a qualifying drought during the normal grazing period for the county, or (b) managed by a federal agency where grazing is not permitted due to fire. Eligible livestock types are livestock that have been (or would have been) grazing on eligible grazing land or pastureland. These include alpacas, beef cattle, buffalo, beefalo, dairy cattle, sheep, deer, elk, emus, equine, goats, llamas, poultry, reindeer, and swine. The livestock must have been maintained for commercial use as part of a farming operation; and livestock owned for noncommercial uses are excluded. Also, livestock that were (or would have been) in a feedlot are not eligible. Payments are generally triggered by the drought intensity level for an individual county, as published in the U.S. Drought Monitor, a federal report published each week. The number of monthly payments depends on the drought severity and length of time the county has been designated as such (Table 1). For drought, the payment amount is equal to the number of monthly payments times 60% of estimated monthly feed cost. For producers who sold livestock because of drought conditions, the payment rate is equal to 80% of the estimated monthly feed cost.8 Table 1. Livestock Forage Program (LFP) (drought intensity and time period determine the number of monthly payments) Drought Monitor Intensity Time Period No. of Monthly Payments D2 (severe drought) For at least eight consecutive weeks during the normal grazing period one monthly payment D3 (extreme drought) At any time during the normal grazing period three monthly payments D3 (extreme drought) For at least four weeks during the normal grazing period four monthly payments D4 (exceptional drought) At any time during the normal grazing period four monthly payments D4 (exceptional drought) For four weeks (not necessarily consecutive) during the normal grazing period five monthly payments Source: P.L. 113-79, Section 1501(e). Notes: Drought intensity level can apply to any area of a county. The LFP monthly payment rate for drought is equal to 60% of the lesser of the monthly feed cost based on either (a) corn prices, specified feeding requirements, and number of animals; or (b) the normal carrying capacity of the land. For details on monthly feed costs and examples, see FSA handbook at http://www.fsa.usda.gov/Internet/FSA_File/1-ldap_r01_a01.pdf. In the case of a producer who sold livestock because of drought conditions, the payment rate is equal to 80% of the monthly feed cost. For fire on federally managed rangeland, the payment rate is 50% of the monthly feed cost, adjusted for the number of days the producer is prohibited from grazing (not to exceed 180 days). Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP) The Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP) provides payments to producers of livestock, honey bees, and farm-raised fish as compensation for losses due to disease, adverse weather, feed or water shortages, or other conditions, such as 8 For more information on LFP, see 7 C.F.R. §1416 Subpart C—Livestock Forage Disaster Program; and the USDA fact sheet at https://www.fsa.usda.gov/Internet/FSA_File/lfp_long_fact_sht_2014.pdf. Congressional Research Service 5 Agricultural Disaster Assistance wildfires, that are not covered under the Livestock Indemnity Program (LIP) or the Livestock Forage Program (LFP). The 2014 farm bill added a provision to cover cattle tick fever specifically (USDA’s final rule indicates ELAP will cover losses due to the cost of gathering cattle for treatment of cattle tick fever). Annual funding is capped at $20 million. ELAP specifically provides assistance for the loss of honey bee colonies in excess of normal mortality. In order to meet the eligibility requirements for honey bee colony losses, they must be the direct result of an eligible adverse weather or loss condition such as colony collapse disorder (CCD), eligible winter storm, excessive wind, and flood.9 Tree Assistance Program (TAP) The Tree Assistance Program (TAP) makes payments to qualifying orchardists and nursery tree growers to replant or rehabilitate trees, bushes, and vines damaged by natural disasters. Eligible trees, bushes, and vines are those from which an annual crop is produced for commercial purposes. Nursery trees include ornamental, fruit, nut, and Christmas trees produced for commercial sale. Trees used for pulp or timber are ineligible. To be considered an eligible loss, the individual stand must have sustained a mortality loss or damage loss in excess of 15% after adjustment for normal mortality or damage, to be determined based on (a) each eligible disaster event, except for losses due to plant disease; or (b) for plant disease, the time period for which the stand is infected. Also, the loss could not have been prevented through reasonable and available measures. For tree, bush or vine replacement, replanting and/or rehabilitation, the payment calculation is the lesser of (a) 65% of the actual cost of replanting (in excess of 15% mortality) and/or 50% of the actual cost of rehabilitation (in excess of 15% damage), or (b) the maximum eligible amount established for the practice by the Farm Service Agency. The total quantity of acres planted to trees, bushes, or vines for which a producer can receive TAP payments cannot exceed 500 acres annually.10 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 (FSA).11 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 9 For more information on ELAP, see 7 C.F.R. §1416 Subpart B—Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program; and the USDA fact sheet at http://www.fsa.usda.gov/Internet/FSA_File/ elap_honeybee_fact_sht.pdf. 10 For more information on TAP, see 7 C.F.R. §1416 Subpart E—Tree Assistance Program; and the USDA fact sheet at http://www.fsa.usda.gov/Internet/FSA_File/tap_2014.pdf. Also, program details and producer examples are in the USDA/FSA handbook, http://www.fsa.usda.gov/Internet/FSA_File/1-tap_r04_a01.pdf. 11 For an overview of the USDA emergency disaster designation and declaration process, see https://www.fsa.usda.gov/ Internet/FSA_File/ed_desig_process2012.pdf. For the USDA factsheet on EM loans, see https://www.fsa.usda.gov/ Internet/FSA_File/emloanpr_sept12.pdf. Congressional Research Service 6 Agricultural Disaster Assistance 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 an interest rate of 2.25%. 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 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 1 to 7 years; loans for 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. In the FY2014 Consolidated Appropriations Act (P.L. 113-76), emergency loan authority was provided at $35 million, an increase of $13 million from FY2013, which was the first year in many years that emergency loans received new loan authority. Emergency loans had been operating for much of the last decade, through FY2012, on unused EM funds carried over from previous fiscal years. Total EM loans (made) are typically less than $100 million per year. Also in counties with disaster designations, producers who have existing direct loans with FSA may be eligible for Disaster Set-Aside (DSA). If, as a result of disaster, a customer is unable to pay all expenses and make loan payments that are coming due, up to one full year’s payment can be moved to the end of the loan.12 Other USDA Assistance In addition to farm assistance described in previous sections, USDA also has several permanent disaster assistance programs that help producers repair damaged land following natural disasters. It also has authority to issue disaster payments to farmers with “Section 32” or “CCC” funds and can use a variety of existing programs to address disaster issues as they arise. Emergency Agricultural Land Assistance Programs Several USDA programs offer financial and technical assistance to producers to repair, restore, and mitigate damage by a natural disaster on private land. • 12 The Emergency Conservation Program (ECP) and the Emergency Forest Restoration Program (EFRP) are administered by USDA’s Farm Service Agency. For both programs, participants are paid a percentage of the cost to restore the For more information, see USDA factsheet at http://www.fsa.usda.gov/Internet/FSA_File/debt_set_aside11.pdf. Congressional Research Service 7 Agricultural Disaster Assistance land to a productive state. ECP also funds water for livestock and installing water conserving measures during times of drought. EFRP was created to assist private forestland owners with losses caused by a natural disaster on nonindustrial private forest land. • The Emergency Watershed Protection (EWP) program and the EWP floodplain easement program are administered by USDA’s Natural Resources Conservation Service and the U.S. Forest Service. EWP assists sponsors, landowners, and operators in implementing emergency recovery measures for runoff retardation and erosion prevention to relieve imminent hazards to life and property created by a natural disaster. The EWP floodplain easement program is a mitigation program that pays for permanent easements on private land meant to safeguard lives and property from future floods, drought, and the products of erosion. For more information on these programs, see CRS Report R42854, Emergency Assistance for Agricultural Land Rehabilitation, by Megan Stubbs. “Section 32” and “CCC” Funds for Farm Disaster Payments USDA has authority to distribute emergency payments to farmers with “Section 32” and Commodity Credit Corporation (CCC) funds. However, in annual appropriations acts since FY2012 (most recently, Section 719 of FY2014 Agriculture appropriations, P.L. 113-76), Congress has prohibited the use of appropriated funds to pay for salaries and expenses needed to operate a farm disaster program under either of these two funding sources.13 • USDA’s “Section 32” program is funded by a permanent appropriation of 30% of the previous year’s customs receipts, and funds are used for a variety of activities, including child nutrition programs, the purchase of commodities for domestic food programs, and farm disaster relief. The statutory authority is Section 32 of the Agricultural Adjustment Act Amendment of 1935 (P.L.74-320, 7 U.S.C. 612c). The authority to provide disaster relief is attributed to Clause 3 of Section 32, which provides that funds “shall be used to re-establish farmers’ purchasing power by making payments in connections with the normal production.” Section 32 was most recently used for disaster payments when USDA made payments of $348 million for 2009 crop losses for rice, upland cotton, soybeans, and sweet potatoes.14 • The Commodity Credit Corporation (CCC) is the funding mechanism for the mandatory subsidy payments that farmers receive. It was federally chartered by the CCC Charter Act of 1948 (P.L.80-806). The authority to provide disaster relief is attributed to Section 5 of the act (15 U.S.C. 714c), which authorizes the CCC to support the prices of agricultural commodities through loans, purchases, payments, and other operations. 13 Congress can stop typically for a year at a time—via appropriations acts and without changing the underlying authorizations law—the ability of the executive branch to carry out a law by prohibiting the payments of salaries to implement a certain government function. See CRS Report R43110, Agriculture and Related Agencies: FY2014 and FY2013 (Post-Sequestration) Appropriations, coordinated by Jim Monke. 14 USDA, Farm Service Agency, Crop Assistance Program (CAP) Fact Sheet, October 2010, http://www.fsa.usda.gov/ Internet/FSA_File/cap10pfs.pdf. Congressional Research Service 8 Agricultural Disaster Assistance Examples of Adjustments to Existing USDA Programs USDA can use authority under existing programs to help producers recover from natural disasters. For example, in response to the major drought affecting a large part of the United States in 2012, USDA took a number of actions, including 15 • extended emergency grazing on Conservation Reserve Program (CRP) acres16; • reduced the emergency loan interest rate and made emergency loans available earlier in the season; • allowed haying or grazing of cover crops without any penalty on the insurability of planted 2013 spring crops; • worked with crop insurance companies to provide flexibility to farmers; and • transferred $14 million in unobligated program funds into the Emergency Conservation Program to help farmers and ranchers rehabilitate farmland damaged by natural disasters and for carrying out emergency water conservation measures in periods of severe drought. More recently, in addition to implementing the 2014 farm bill disaster programs, USDA has taken a number of administrative actions in 2014 to assist producers in California and elsewhere dealing with drought.17 These include • $15 million in targeted conservation assistance through the Environmental Quality Incentives Program (EQIP)for the most extreme and exceptional drought areas; funding helps farmers and ranchers implement conservation practices that conserve water resources, reduce wind erosion on drought-impacted fields and improve livestock access to water; • $5 million in targeted Emergency Watershed Protection (EWP) Program assistance to the most drought impacted areas of California to protect vulnerable soils; and • $3 million in Emergency Water Assistance Grants for rural communities experiencing water shortages.18 15 USDA, Farm Service Agency, “USDA Designates Del Norte County in California as a Primary Natural Disaster Area With Assistance to Producers in Oregon,” press release, February 5, 2014, http://www.fsa.usda.gov/FSA/ newsReleases?area=newsroom&subject=landing&topic=edn&newstype=ednewsrel&type=detail&item= ed_20140205_rel_0020.html. 16 CRS Report R42783, Conservation Reserve Program (CRP): Status and Issues, by Megan Stubbs. 17 U.S. Department of Agriculture, “Obama Administration Announces Additional Assistance to Californians Impacted by Drought,” press release, February 14, 2014, http://www.usda.gov/wps/portal/usda/usdahome?contentidonly=true& contentid=2014/02/0022.xml. 18 The U.S. Department of Agriculture’s Rural Utilities Service (RUS) provides grants and loans for rural water systems in communities with less than 10,000 inhabitants; its programs are for domestic water service, not water for agricultural purposes. For more information, see CRS Report R43408, Emergency Water Assistance During Drought: Federal Non-Agricultural Programs, by Nicole T. Carter, Tadlock Cowan, and Joanna Barrett. Congressional Research Service 9 Agricultural Disaster Assistance Author Contact Information Dennis A. Shields Specialist in Agricultural Policy dshields@crs.loc.gov, 7-9051 Congressional Research Service 10