Agricultural Disaster Assistance

Contents

• Federal Crop Insurance
• Noninsured Crop Disaster Assistance Program (NAP)
• Supplemental Agricultural Disaster Assistance Programs
• Livestock Indemnity Program (LIP)
• Livestock Forage Disaster Program (LFP)
• Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP)
• Tree Assistance Program (TAP)
• Emergency Disaster Loans
• Other USDA Assistance
• Emergency Agricultural Land Assistance Programs
• "Section 32" and "CCC" Funds for Farm Disaster Payments
• Adjustments to Existing USDA Programs
• Assistance to Prevent Spread of Animal Diseases
• Ad Hoc Assistance
• Appropriations
• Wildfires and Hurricanes Indemnity Program Plus (WHIP+)
• State Block Grants
• On-Farm Storage Loss Program
• Milk Loss
• Prevented Planting
• Sugar Beets

Summary

The U.S. Department of Agriculture (USDA) offers several programs to help farmers recover financially from natural disasters, including drought and floods. All the programs have permanent authorization, and one requires a federal disaster designation (the emergency loan program). Most programs receive mandatory 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 risks associated with adverse weather, as well as weather-related plant diseases and insect infestations and declines in commodity prices. 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. Producers who grow a crop that is currently ineligible for the federal crop insurance program may apply for the Noninsured Crop Disaster Assistance Program (NAP). NAP provides a basic level of coverage (when loss exceeds 50% of expected production) as well as options to purchase additional coverage. Similar to crop insurance, policies must be purchased prior to the planting season.

There are four permanently authorized disaster programs for livestock and trees. Producers do not pay a fee to participate, and advanced sign-up is not required. 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 or sold at a reduced sale price caused by adverse weather, attacks by reintroduced wild animals, and disease;
• 2. the Livestock Forage Disaster Program (LFP), which provides 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 to producers of livestock, honey bees, and farm-raised fish as compensation for losses due to animal disease, adverse weather, and feed or water shortages; and
• 4. the Tree Assistance Program (TAP), which provides 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 loans from USDA.

USDA has several permanent disaster assistance programs designed to help producers repair damaged land following natural disasters. It also has authority to issue disaster payments to farmers with funds from the Commodity Credit Corporation (CCC) or "Section 32." Finally, USDA can use a variety of existing programs to address disaster issues as they arise, such as allowing emergency grazing on land enrolled in the Conservation Reserve Program.

Congressional actions through the Agriculture Improvement Act of 2018 (P.L. 115-334) and the FY2019 supplemental appropriation (P.L. 116-20) have made a number of amendments to the agricultural disaster assistance programs and authorized supplemental appropriations covering crop and livestock losses from natural disasters in recent years. USDA has implemented this ad hoc assistance through two versions of the Wildfires and Hurricanes Indemnity Program (WHIP). Losses occurring in 2017 were eligible for 2017 WHIP. An expanded set of losses occurring in 2018 and 2019 are eligible for WHIP Plus (WHIP+). In addition to WHIP+, USDA has implemented two subprograms—the On-Farm Storage Loss Program and the Milk Loss Program—as well as block grants with states and payments for acres that were prevented from being planted.

Economic and market losses related to the COVID-19 pandemic are not considered eligible losses under the USDA disaster assistance programs. While USDA has provided some flexibilities through existing programs, most disaster assistance programs require some level of production or physical loss from an unavoidable natural cause in order to trigger eligibility.

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The U.S. Department of Agriculture (USDA) offers several programs designed to help farmers and ranchers recover from the financial effects of natural disasters, including (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, while the emergency loan program is the only one requiring a federal disaster designation (see Table 1). Most programs receive mandatory funding amounts of "such sums as necessary" and are not subject to annual discretionary appropriations.¹ The Agricultural Improvement Act of 2018 (2018 farm bill, P.L. 115-334) made a number of amendments to these programs, generally to expand availability and support.

Prior to the creation of many of the permanently authorized programs at USDA, Congress had historically provided farmers and ranchers with ad hoc disaster assistance payments authorized through supplemental appropriations. Subsequently, policies shifted away from the temporary forms of assistance in favor of enacting more permanent forms of support.² More recently, policies have shifted to supplement permanent programs with ad hoc assistance for select agriculture losses. Supplemental appropriations in FY2018 and FY2019 amended existing disaster assistance programs and authorized over $5 billion for production losses assistance from natural disasters in 2017, 2018, and 2019.³ USDA has also used separate discretionary authorities to respond to disasters administratively.

Economic and market-related losses are not generally considered eligible losses under USDA's disaster assistance programs. Most disaster assistance programs are statutorily required to include some level of production or physical loss from an unavoidable natural cause in order to trigger eligibility. As such, this report does not discuss USDA payment programs related to the COVID-19 pandemic or trade disputes.⁴

This report provides an overview of permanently authorized federal disaster assistance programs for agricultural losses from natural disaster as well as discretionary authority that USDA may use to provide assistance. It also discusses ad hoc assistance authorized by Congress.

Federal Crop Insurance

The federal crop insurance program is permanently authorized by the Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.) and is operated through public and private entities. Private insurance companies, known as Approved Insurance Providers (AIPs), are the primary insurers selling and servicing the insurance policies. USDA's Risk Management Agency (RMA) drafts federal crop insurance policies, sets premium rates, and regulates AIPs. The Federal Crop Insurance Corporation (FCIC) reinsures crop insurance policies and subsidizes the AIPs expenses. The program is designed to protect crop producers from risks associated with adverse weather, as well as weather-related plant diseases and insect infestations and declines in commodity prices.

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 beginning of planting season. Insurance products that protect against loss in revenue and profit margins 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) authorized new federal spending for 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.⁵

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 CAT coverage is 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—referred to as 50/55 coverage.

Although eligible producers do not have to pay a premium for CAT coverage, they are required to pay upon enrollment a $655 administrative fee per covered crop for each county where they grow the crop. USDA can waive the fee for financial hardship cases. In addition to the administrative fee, producers can elect to pay a premium, which is partially subsidized by the government, to increase the 50/55 CAT 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%. These higher levels of coverage are known as buy-up coverage.

For many insurable commodities, an eligible producer can purchase revenue insurance. Under such a policy, a farmer could receive an indemnity payment when actual farm revenue for a crop 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 are also eligible for reduced coverage if they are late or prevented from planting because of flooding.

The annual agriculture appropriations bill traditionally makes two separate appropriations for the federal crop insurance program. It provides discretionary funding for the salaries and expenses of the RMA. It also provides "such sums as are necessary" for the FCIC, which finances all other expenses of the program, including premium subsidies, indemnity payments, and reimbursements to the AIPs.⁶ The total cost of the program varies by year, primarily due to fluctuating levels of indemnity payments from changes in commodity prices, planting decisions, and weather conditions.⁷ Across all policies, the average premium subsidy was about 63% of total premiums in 2018.⁸ The federal government also subsidizes the costs of selling and servicing the policies (as delivery subsidies to Approved Insurance Providers) and absorbs underwriting losses (indemnities in excess of premiums received) in years when indemnities are high.

For a more detailed analysis of the federal crop insurance program, see CRS Report R45193, Federal Crop Insurance: Program Overview for the 115th Congress.

Noninsured Crop Disaster Assistance Program (NAP)

Producers who grow a crop that is currently ineligible for crop insurance may apply for 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 (FSA). It was first authorized under the Federal Crop Insurance Reform Act of 1994 (P.L. 103-354). NAP is not subject to annual appropriations. Instead, it receives such sums as are necessary through USDA's Commodity Credit Corporation (CCC), which has a line of credit with the U.S. Treasury to fund an array of farm programs.⁹

Eligible crops under NAP include any commercial crops grown for food, fiber, or livestock consumption for which there is no CAT coverage available under the federal crop insurance program, with limited exceptions. These crops include mushrooms, floriculture, ornamental nursery, Christmas trees, turfgrass sod, aquaculture, honey, maple sap, ginseng, and industrial crops used in manufacturing or grown as a feedstock for energy production, among others. Trees grown for wood, paper, and pulp products are not eligible. To be eligible for a NAP payment, a producer first must apply for coverage 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 CAT coverage under crop insurance, NAP applicants must also pay an administrative fee at the time of application. The NAP service fee is the lesser of $325 per crop or $825 per producer per administrative county, not to exceed a total of $1,950 for farms in multiple counties.¹⁰

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 CAT coverage in that it pays 55% of the market price for losses in excess of 50% of normal historical production.

Additional coverage (referred to as buy-up coverage) may be purchased at 50% to 65% (in 5% increments) of established yield and 100% of average market price, contract price, or other premium price. The farmer-paid fee for additional coverage is 5.25% times the product of the selected coverage level and value of production (acreage multiplied by yield multiplied by the average market price multiplied by the producer's share of the crop).¹¹ Grazing land is not eligible for buy-up coverage.

A producer of a noninsured crop is subject to an annual payment limit of $125,000 per person for catastrophic coverage and $300,000 for buy-up coverage. A producer is ineligible under NAP if the producer's total adjusted gross income (AGI) exceeds $900,000.¹² The total federal cost of NAP was $165 million in FY2014, $125 million in FY2015, $137 million in FY2016, $157 million in FY2017, $164.3 million in FY2018, and $138.4 million in FY2019.¹³

Supplemental Agricultural Disaster Assistance Programs

Four agricultural disaster assistance programs are permanently authorized for livestock and fruit trees: (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). They operate nationwide and are administered by FSA. Producers do not pay fees to participate and can apply at their local FSA offices.¹⁴

All programs receive "such sums as necessary" in mandatory funding via the CCC to reimburse eligible producers for their losses. Total payments vary each year based on eligible loss conditions. For FY2019, LFP payments totaled $287.9 million, LIP payments totaled $49.9 million, TAP payments totaled $15.4 million, and ELAP payments totaled $46.0 million.¹⁵ All payments are reduced by sequestration.¹⁶

For individual producers, payments under LFP may not exceed $125,000 per year. There are no limits on the amount of payments received under LIP, ELAP, and TAP. To be eligible for a payment under any of these programs, a producer's total AGI cannot exceed $900,000.¹⁷

Livestock Indemnity Program (LIP)

LIP provides payments to eligible livestock owners and contract growers for livestock deaths in excess of normal mortality caused by an eligible loss condition (e.g., adverse weather, disease, or animal attack). Payments may also be made when the animal is injured as a direct result of an eligible loss condition but does not die and is sold at a reduced price. Eligible loss conditions may include (1) extreme or abnormal damaging weather that is not expected to occur during the loss period for which it occurred, (2) disease that is caused or transmitted by a vector and is not susceptible to control by vaccination, and (3) an attack by animals reintroduced into the wild by the federal government or protected by federal law. Eligibility is predicated on not only the occurrence of an eligible loss condition but direct causation to the death or injury of the animal.

Eligible livestock include beef and dairy cattle, bison, hogs, chickens, ducks, geese, turkeys, sheep, goats, alpacas, deer, elk, emus, llamas, reindeer, caribou, 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. Poultry and swine are the only eligible livestock for contract growers.

The LIP payment rate is equal to 75% of the average fair market value of the deceased animal type. USDA publishes a payment rate for each type of livestock for each year (e.g., $889.89 per adult beef cow and $3.70 per duck as of February 2020).¹⁸ For eligible livestock contract growers, the payment rate is based on 75% of the national average input costs for the applicable livestock. For livestock sold at a reduced sale price, payments are calculated by multiplying the national payment rate for the livestock category minus the amount the owner received at sale multiplied by the owner's share.

Livestock Forage Disaster Program (LFP)

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 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 grazing on eligible grazing land or pastureland or would have been had a disaster not struck. These include alpacas, beef cattle, buffalo, beefalo, dairy cattle, sheep, deer, elk, emus, equine, goats, llamas, poultry, reindeer, and swine. Livestock must be maintained for commercial use as part of a farming operation. Livestock owned for noncommercial uses, or livestock that is in (or would have been in) feedlots, are excluded.

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 2). For drought, the payment amount is equal to the number of monthly payments multiplied by 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.¹⁹

Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP)

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 wildfires) that are not covered under LIP or LFP.²⁰

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, eligible winter storm, excessive wind, and flood. For livestock losses, ELAP covers three categories: (1) livestock feed and grazing losses that are not due to drought or wildfires on federally managed lands, (2) losses resulting from the additional cost of transporting water to livestock due to an eligible drought, and (3) losses resulting from the additional cost associated with gathering livestock for inspection and treatment related to cattle tick fever. Applicants who are defined as a socially disadvantaged, limited resource, beginning, or veteran farmer or rancher are eligible for up to 90% of cost of loss.²¹

Tree Assistance Program (TAP)

TAP makes payments to qualifying orchardists and nursery tree growers to replant or rehabilitate trees, bushes, and vines damaged by natural disasters. Losses in crop production—as opposed to the tree, bush, or vine itself—are generally covered by federal crop insurance or NAP. 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.²² Normal mortality or damage is 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 replacement, replanting, and/or rehabilitation of trees, bushes, or vines, 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 FSA.²³ Applicants who are defined as beginning or veteran farmer or ranchers are eligible for higher payments, including the lesser of (a) 75% 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 FSA.²⁴ The total quantity of acres planted to trees, bushes, or vines for which a producer can receive TAP payments cannot exceed 1,000 acres annually.²⁵

Emergency Disaster Loans

When either the President or the Secretary of Agriculture declares a county a disaster area or quarantine area, agricultural producers in that county may become eligible for low-interest emergency disaster (EM) loans available through FSA.²⁶ Producers in counties that are contiguous to a county with a disaster designation also become eligible for EM loans. 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 a loan total of $500,000).

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 an established 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, including having acceptable credit history and collateral to secure the loan. Applications must be received within eight months of the county's disaster designation date. Loans for nonreal-estate purposes must generally be repaid within seven 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 nonreal-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 FY2020, the program received $37.7 million of new loan authority.²⁷ Unused funds are carried over and available in the next fiscal year. Therefore, the total loan authority can vary greatly depending on appropriated levels, annual use, and total carryover. In FY2020, the total loan authority is $122.4 million.²⁸

Also in counties with disaster designations, producers who have existing direct loans with FSA may be eligible for Disaster Set-Aside. If, as a result of disaster, a borrower 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.²⁹

Other USDA Assistance

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.

• The Emergency Conservation Program (ECP) and the Emergency Forest Restoration Program (EFRP) are administered by FSA. For both programs, FSA pays participants a percentage of the cost to restore the 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 and drought and the products of erosion.

For more information on these programs, see CRS Report R42854, Emergency Assistance for Agricultural Land Rehabilitation.

"Section 32" and "CCC" Funds for Farm Disaster Payments

USDA has discretionary authority to distribute emergency payments to farmers with Funds for Strengthening Markets, Income and Supply (referred to as "Section 32") and CCC funds.³⁰ While both Section 32 and CCC have broad authority to support U.S. agriculture, many of their activities are required under various statutes, such as omnibus farm bills.³¹ Beginning in FY2012, annual appropriations acts limited select discretionary uses of CCC and Section 32. The FY2018 omnibus appropriation removed this limitation for CCC and allowed for limited carryover funding under Section 32 to be used pending congressional notification.

• USDA's Section 32 program is funded by a permanent appropriation of 30% of the previous year's customs receipts. Funds are used for a variety of activities, including child nutrition programs, the purchase of commodities for domestic food programs, and farm disaster assistance. 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 assistance 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." The FY2020 appropriation (§714, P.L. 116-94) limits use of clause 3 to carryover funding of no more than $350 million following a two-week advance notice to Congress.
• The CCC serves as the funding institution for carrying out federal farm support programs, such as commodity price support and production programs, conservation programs, disaster assistance, agricultural research, and bioenergy development. It is federally chartered by the CCC Charter Act of 1948 (P.L. 80-806), as amended. The authority to provide disaster assistance is attributed to Section 5 of the act (15 U.S.C. 714c), which, among other activities, authorizes the CCC to support the prices of agricultural commodities through loans, purchases, payments, and other operations.

Adjustments to Existing USDA Programs

In addition to implementing the disaster assistance programs discussed above, USDA can use authority under other existing programs to help producers recover from natural disasters. Examples of USDA adjustments to existing programs in recent years include:

• extending emergency grazing and haying on Conservation Reserve Program (CRP) acres;³²
• reducing the emergency loan interest rate and making emergency loans available earlier in the season;
• targeting conservation assistance through the Environmental Quality Incentives Program (EQIP), including providing additional funding for farmers and ranchers to implement conservation practices that prevent excessive soil erosion, restore streambanks, and respond to animal mortality (farmers and ranchers contribute about half the cost of implementing the practices);³³ and
• directing Emergency Community Water Assistance Grants for rural water systems experiencing emergencies resulting from a significant decline in quantity or quality of drinking water.³⁴

Assistance to Prevent Spread of Animal Diseases

Under the Animal Health Protection Act (7 U.S.C. 8301, et seq.), USDA is authorized to take protective actions against the spread of livestock disease, including seizing, treating, or destroying animals if USDA determines that an extraordinary emergency exists because of the presence of a pest or disease of livestock. As part of its animal health program, USDA's Animal and Plant Health Inspection Service compensates producers for animals that must be euthanized, for their disposition, and for infected materials that must also be destroyed. Funding is provided by annual appropriations or through the CCC for larger amounts. The most recent example of a large-scale outbreak that resulted in payments to producers was in 2015 and 2016 during outbreaks of highly pathogenic avian influenza affecting the U.S. poultry industry.³⁵

Ad Hoc Assistance

The U.S. farm policy mix that provides assistance to agricultural producers for damage and loss following a natural disaster continues to include both permanent and temporary authorized support. The authorization of permanent disaster assistance programs in the 2008 and 2014 farm bills,³⁶ as well as expanded crop insurance and NAP policies, were intended to reduce the need for ad hoc disaster assistance. Following enactment of the 2008 farm bill, Congress appropriated little in the way of supplemental disaster assistance for agriculture for several years, most of which was for land rehabilitation efforts under EWP and ECP. This changed in 2018, when an active hurricane and wildfire season in 2017 resulted in Congress authorizing supplemental assistance in the Bipartisan Budget Act of 2018 (P.L. 115-123) and again in 2019 in the FY2019 supplemental appropriation (P.L. 116-20). USDA has implemented this ad hoc assistance through two versions of the Wildfires and Hurricanes Indemnity Program (WHIP). USDA has also further implemented two subprograms—the On-Farm Storage Loss Program and the Milk Loss Program—as well as block grants to states and direct payments for acres prevented from planting.

Appropriations

The Bipartisan Budget Act of 2018 authorized $2.36 billion for production losses not covered under NAP or crop insurance in 2017.³⁷ The majority of this funding was made available through WHIP, referred to as 2017 WHIP.³⁸ Only crop, tree, bush, and vine losses from a wildfire or hurricane in 2017 were directed by Congress as eligible for assistance under 2017 WHIP.³⁹ A portion of the funding was also used for a $340 million block grant to the State of Florida to assist the citrus industry.⁴⁰

An FY2019 supplemental appropriation was enacted on June 6, 2019, which authorized an additional $3 billion to USDA to cover crop, tree, bush, and vine losses from 2018 and 2019 natural disasters that were not covered under crop insurance or NAP.⁴¹ The majority of the FY2019 supplemental appropriation funding was announced by USDA as an expanded version of WHIP, referred to as WHIP+. Congress also required payments for additional losses not previously covered, including crops that were prevented from being planted in 2019, on-farm stored commodities, and milk losses. The FY2019 supplemental appropriation authorized, and USDA made available, block grants to select states to cover livestock, poultry, and forestry losses.⁴²

Approximately 60% of 2017 WHIP went unobligated before funds expired on December 31, 2019. The FY2020 Further Consolidated Appropriation Act (P.L. 116-94, Division B, §791) repurposed those funds to WHIP+ (that is, rescinded the 2017 WHIP unobligated balance, estimated to be $1.5 billion, and reallocated it to WHIP+) with expanded eligibility and additional program requirements.

Wildfires and Hurricanes Indemnity Program Plus (WHIP+)

WHIP+ provides assistance payments to cover a portion of production losses in calendar years 2018 and 2019 from Hurricanes Michael or Florence, other hurricanes, floods, tornadoes, typhoons, volcanic activity, snowstorms, wildfires, drought, excessive moisture, and other natural disasters.⁴³ Losses may include crops, trees, bushes, and vines. Payments for WHIP+ are based on several factors, including (1) the expected value of the crop, (2) the level of insurance or NAP coverage, (3) a WHIP+ payment factor, (4) the value of the crop harvested, and (5) insurance payments received. Payment calculations vary based on production loss; value of crop loss; and tree, bush, and vine loss.⁴⁴ An additional payment factor varies by state and commodity and is set by USDA to reflect the decreased costs incurred by producers when the crop is not harvested or is prevented from being planted. Table 3 outlines the USDA-created WHIP+ payment calculation. All WHIP+ participants are required to purchase crop insurance or NAP for the next two crop years.

Payment limits for WHIP+ are based on an individual's or entity's average AGI over a three-year period—2015, 2016, and 2017—depending on how much of that income is derived from farming.⁴⁵ Generally, payments are limited to $125,000 per person or legal entity. If more than 75% of the participant's AGI is from farming, then payments are limited to $250,000 for each crop year with an overall payment limit of $500,000 for all crop years. The AGI eligibility threshold that apply to farm commodity support programs and permanent disaster assistance programs, such as the "Supplemental Agricultural Disaster Assistance Programs" described above, do not apply in determining WHIP+ eligibility.

State Block Grants

Both the Bipartisan Budget Act of 2018 and the FY2019 supplemental appropriation provided USDA with the flexibility to provide assistance through block grants. One block grant was issued under 2017 WHIP to the State of Florida to assist the citrus industry with the cost of buying and planting replacement trees—including resetting and grove rehabilitation—and for repairing damage to irrigation systems, among other activities.⁴⁶

Under WHIP+, USDA announced over $800 million for block grants with Alabama, Florida, and Georgia for losses of timber, cattle, and poultry as well as necessary expenses related to losses of horticulture crops and pecan production.⁴⁷

The FY2020 appropriation required that USDA use an additional $400 million of the repurposed funds for WHIP+ through block grants with eligible states.⁴⁸

On-Farm Storage Loss Program

The FY2019 supplemental appropriation specifically covered the loss of commodities stored on farm due to a qualifying natural disaster in 2018 and 2019.⁴⁹ USDA administered this through an On-Farm Storage Loss Program (OFSLP).⁵⁰ The program provides payments for the uncompensated losses of harvested commodities including grains, oilseeds, and hay stored in on-farm structures.⁵¹ Only losses related to eligible disaster events (e.g., floods, tornadoes, snowstorms, and wildfires) that occurred during 2018 or 2019 may receive payments. Payments are calculated using a national payment rate per commodity based on 75% of the market or harvest price. A person or legal entity is limited to no more than $125,000 per loss year. OFSLP payments are for the loss of the stored commodity, not the structure itself.

Milk Loss

The FY2019 supplemental appropriation specifically covered the loss of milk due to a qualifying natural disaster during 2018 and 2019. USDA administered this assistance through a Milk Loss program (WHIP-ML).⁵² The WHIP-ML program provides indemnity payments to eligible dairy operators for milk that was dumped or removed without compensation from the commercial milk market due to qualifying natural disasters (e.g., hurricanes, floods, tornadoes, typhoons, and wildfires).⁵³ In some cases, dairy operations received a partial payment for milk that was dumped through a marketing organization, insurance, or other source. Only the portion of milk that was not compensated for is eligible for WHIP-ML. Payments are limited to $125,000 per year per person or legal entity.

Prevented Planting

The FY2019 supplemental appropriation specially covered losses for crops in 2019 that were either prevented from being planted or delayed in begin planted. USDA implemented this provision by providing a top-up payment to producers who claimed prevent plant losses (PPL) in 2019 through their federal crop insurance policy.⁵⁴ In 2019, payments were automatically issued to producers with an approved non-drought-related PPL indemnity due to excessive moisture, flooding, or other non-drought causes. Payments varied based on the type of crop insurance policy purchased, and payments ranged from 10% to 15% of the PPL indemnity received. Producers who received top-up payment are required to purchase crop insurance for the next two crop years, similar to WHIP+ requirements. As of November 2019, USDA has paid over $570 million in top-up payments.⁵⁵

Sugar Beets

The FY2020 appropriation required that all sugar beet losses in 2018 and 2019 be paid through cooperative processors.⁵⁶ USDA announced that $285 million is to be provided through sugar beet processing cooperatives to member growers.⁵⁷ Cooperatives are to enter into an agreement with USDA to administer assistance to their members.⁵⁸ Sugar beet producers who are not members of a cooperative processor may apply for WHIP+ through FSA.

Author Contact Information

Footnotes

1.	For a brief summary of these programs, see CRS In Focus IF10565, Federal Disaster Assistance for Agriculture.
2.	For example, the Food, Conservation, and Energy Act of 2008 (2008 farm bill; P.L. 110-246) and the Agricultural Act of 2014 (2014 farm bill; P.L. 113-79) authorized the "Supplemental Agricultural Disaster Assistance Programs" discussed below.
3.	Bipartisan Budget Act of 2018 (P.L. 115-123) and Additional Supplemental Appropriations for Disaster Relief Act, 2019 (P.L. 116-20).
4.	For additional information on USDA COVID-19 assistance, see https://www.usda.gov/coronavirus. For additional information on USDA's trade aid assistance, see CRS Report R45865, Farm Policy: USDA's 2019 Trade Aid Package.
5.	H.Rept. 106-639; "Conference Report on H.R. 2559, Agricultural Risk Protection Act of 2000," House debate, Congressional Record, vol. 146, part 67 (May 25, 2000), p. H3817-H3828; and "Risk Management for the 21st Century Act," Senate debate, Congressional Record, vol. 146, part 34 (March 23, 2000), pp. S1627-S1642.
6.	The FCIC is funded through a mandatory indefinite appropriation that draws necessary funds directly from the U.S. Treasury.
7.	The total direct cost of the federal crop insurance program to the federal government for crop years 2007-2016 was about $72 billion, of which about $43 billion (60%) directly benefitted producers, $28 billion (39%) went to approved insurance providers, and $754 million (1%) was for RMA salaries and expenses. See CRS Report R45193, Federal Crop Insurance: Program Overview for the 115th Congress, for a more detailed discussion on cost.
8.	In crop year 2018, total premiums were $9.9 billion, and premium subsidies were $6.3 billion. See RMA, Crop Year Government Cost of Federal Crop Insurance, March 11, 2020, https://rma.usda.gov/-/media/RMAweb/AboutRMA/Program-Budget/18cygovcost.ashx?la=en.
9.	For more information on CCC, see CRS Report R44606, The Commodity Credit Corporation: In Brief.
10.	For more on NAP, see USDA factsheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/noninsured_crop_disaster_assistance_program-nap-fact_sheet.pdf. Also, see NAP crop eligibility, premium, and payments estimator at https://apps.fsa.usda.gov/nap/costtool/login.do.
11.	For NAP enhancements, see CCC and FSA, "Noninsured Crop Disaster Assistance Program; Final Rule," 85 Federal Register 12213-12221, March 2, 2020, https://www.fsa.usda.gov/Internet/FSA_Federal_Notices/nap_2020.pdf.
12.	For additional information on payment limits and AGI requirements, see CRS Report R44739, U.S. Farm Program Eligibility and Payment Limits.
13.	USDA, 2021 Explanatory Notes, Commodity Credit Corporation, February 2020, http://www.obpa.usda.gov/26ccc2021notes.pdf.
14.	For local FSA contact information, see FSA locator at http://offices.sc.egov.usda.gov/locator/app?agency=fsa.
15.	USDA, 2021 Explanatory Notes, February 2020, https://www.obpa.usda.gov/explan_notes.html.
16.	Sequestration is a process to reduce federal spending through automatic, largely across-the-board reductions that permanently cancel mandatory and/or discretionary budget authority. The supplemental agricultural disaster assistance programs classify as nonexempt mandatory accounts and are therefore reduced by sequestration. For additional information on sequestration, see Appendix C in CRS Report R45974, Agriculture and Related Agencies: FY2020 Appropriations.
17.	For additional information on payment limits, see CRS Report R46248, U.S. Farm Programs: Eligibility and Payment Limits.
18.	Payment rates are available in the USDA fact sheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/livestock_indemnity_program_lip-fact_sheet.pdf. For more information, see 7 C.F.R. §1416 Subpart D—Livestock Indemnity Program and the FSA LIP handbook at https://www.fsa.usda.gov/Internet/FSA_File/1-lip_r00_a03.pdf.
19.	For more information on LFP, see 7 C.F.R. §1416 Subpart C—Livestock Forage Disaster Program; the USDA fact sheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2019/livestock_forage_disaster_program-fact_%20sheet_july-2019.pdf; and the FSA LFP handbook at http://www.fsa.usda.gov/Internet/FSA_File/1-lfp_r00_a01.pdf.
20.	For more information on ELAP, see 7 C.F.R. §1416 Subpart B—Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program; general ELAP fact sheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/elap_general_factsheet.pdf; ELAP honey bee fact sheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/elap_honeybee_factsheet.pdf ; ELAP livestock fact sheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2019/elap_livestock_fact_sheet.pdf; ELAP farm-raised fish fact sheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2019/elap_farm-raised_fish_fact_sheet.pdf ; and the FSA ELAP handbook at https://www.fsa.usda.gov/Internet/FSA_File/1-elap_r00_a03.pdf.
21.	For additional information and definitions for socially disadvantaged, limited resource, beginning, or veteran farmer or rancher, see https://www.nrcs.usda.gov/wps/portal/nrcs/main/national/people/outreach/slbfr/.
22.	Note that the FY2019 supplemental appropriation (P.L. 116-20) extended TAP payments to pecan tree losses in excess of 7.5% (adjusted for normal mortality) during calendar year 2018.
23.	Higher payment rates of up to 75% for replanting and rehabilitation are available for beginning and veteran farmers and ranchers.
24.	For additional information on beginning and veteran farmer and rancher provision in farm bill programs, see CRS In Focus IF11227, 2018 Farm Bill Primer: Beginning Farmers and Ranchers; and CRS In Focus IF11093, 2018 Farm Bill Primer: Veteran Farmers and Ranchers.
25.	For more information on TAP, see 7 C.F.R. §1416 Subpart E—Tree Assistance Program; the general TAP fact sheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/tree_assistance_program-tap-fact_sheet.pdf; the 2017 TAP pecan loss fact sheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2018/tap_pecan_tree_losses_fact_sheet_august_2018.pdf; and the TAP Florida citrus greening fact sheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2018/tap_florida_citrus_greening_fact_sheet_may_2018.pdf.
26.	The Secretary of Agriculture may designate quarantine areas under the Plant Protection Act (Title VI of P.L. 106-224) or animal quarantine laws. For an overview of the USDA emergency disaster designation and declaration process, see https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2017/emergency_disaster_designation_and_declaration_process_oct2017.pdf. For the USDA fact sheet on EM loans, see https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2019/emergency-loan-program.pdf .
27.	Division B, Title II of P.L. 116-94.
28.	For the most recent funding levels available, see emergency loan funding totals at http://www.fsa.usda.gov/programs-and-services/farm-loan-programs/funding/index.
29.	No loan may receive more than one disaster set-aside unless it is later restructured. For more information, see USDA fact sheet at https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2017/disaster_set_aside_program_oct2017.pdf.
30.	For additional information on Section 32, see CRS Report RL34081, Farm and Food Support Under USDA's Section 32 Program. For additional information on the CCC, see CRS Report R44606, The Commodity Credit Corporation: In Brief.
31.	Most CCC- and Section 32-funded programs are classified as mandatory spending programs and therefore do not require annual appropriations.
32.	Emergency grazing and haying on CRP acres are generally restricted during primary nesting season for certain wildlife. Authorization is provided either at the national FSA level or by a state FSA committee utilizing the U.S. Drought Monitor. For more information on CRP emergency grazing and haying requirements, see FSA, "Emergency Haying and Grazing," https://www.fsa.usda.gov/programs-and-services/conservation-programs/conservation-reserve-program/emergency-haying-and-grazing/index.
33.	For additional information on EQIP Disaster Recovery Assistance, see https://www.nrcs.usda.gov/Internet/FSE_MEDIA/nrcseprd1429025.pdf.
34.	USDA's Rural Utilities Service provides grants and loans for rural water systems in communities with fewer 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.
35.	For more information, see CRS Report R44114, Update on the Highly-Pathogenic Avian Influenza Outbreak of 2014-2015.
36.	See the "Supplemental Agricultural Disaster Assistance Programs" section discussed above.
37.	CRS In Focus IF10829, Agriculture Funding in the Bipartisan Budget Act of 2018.
38.	USDA, "Nearly $2 Billion Now Available for Eligible Producers Affected by 2017 Hurricanes and Wildfires," press release, July 16, 2018, https://www.usda.gov/media/press-releases/2018/07/16/nearly-2-billion-now-available-eligible-producers-affected-2017.
39.	For additional information, see FSA, 2017 Wildfires and Hurricanes Indemnity Program (WHIP), https://www.fsa.usda.gov/programs-and-services/disaster-assistance-program/wildfires-and-hurricanes-indemnity-program/index. The FY2019 supplemental expanded eligibility under 2017 WHIP to include losses from Tropical Storm Cindy, peach and blueberry losses from extreme cold in calendar year 2017, and blueberry productivity losses from extreme cold and hurricanes in calendar year 2018.
40.	An additional $3.2 million was available for administrative expenses. FSA, "Perdue Announces Florida Citrus Hurricane Recovery Details," press release, May 1, 2018, https://www.fsa.usda.gov/news-room/news-releases/2018/nr_20180501_rel_0068.
41.	CRS In Focus IF11245, FY2019 Supplemental Appropriations for Agriculture.
42.	FSA, "USDA Announces Block Grants for Three States as Part of Broader Disaster Relief Package," press release, November 8, 2019, https://www.fsa.usda.gov/news-room/news-releases/2019/usda-announces-block-grants-for-three-states-as-part-of-broader-disaster-relief-package.
43.	The FY2020 appropriation expanded losses for WHIP+ to include quality loss, drought (D3 U.S. Drought Monitor intensity or higher), and excessive moisture. USDA opened WHIP+ sign up for the expanded set of losses on March 23, 2020. USDA, "USDA Opens Wildfires and Hurricane Indemnity Program Plus (WHIP+)," press release, February 28, 2020, https://www.usda.gov/media/press-releases/2020/02/28/usda-opens-wildfires-and-hurricane-indemnity-program-plus-whip. The FY2020 appropriation also expanded WHIP+ to losses previously eligible under 2017 WHIP, including losses from Tropical Storm Cindy, peach and blueberry losses due to freeze in 2017 and blueberry productivity losses in 2018. USDA reopened 2017 WHIP sign up for these losses on February 10, 2020. FSA, 2017 WHIP Policy Update, Notice WHIP-14, February 10, 2020, https://www.fsa.usda.gov/Internet/FSA_Notice/whip_14.pdf.
44.	For additional information, see FSA, Wildfire and Hurricane Indemnity Program-Plus (WHIP+), October 2019, https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2019/wildfire-and-hurricane-indemnity-program-plus_whip.pdf.
45.	Producers are assumed to be in the lowest payment limit category unless an exception to the payment limit is filed with USDA and documentation from a certified public accountant or attorney states that at least 75% of the person's or legal entity's average AGI was from adjusted gross farm income. Farm income includes income received or obtained from farming, ranching, and forestry operations.
46.	USDA, "Perdue Announces Florida Citrus Hurricane Recovery Details," press release, May 1, 2018, https://www.usda.gov/media/press-releases/2018/05/01/perdue-announces-florida-citrus-hurricane-recovery-details.
47.	USDA, "USDA Announces Block Grants for Three States as Part of Broader Disaster Relief Package."
48.	P.L. 116-94, Division B, §791(c).
49.	Most crop insurance policies do not cover the loss of a crop once harvested unless a supplemental policy is purchased. Trade disruptions in 2018 and 2019 resulted in higher than normal commodity stocks stored on-farm. Heavy rains and flooding in 2018 and 2019, combined with these large commodity stocks, resulted in numerous losses of on-farm stored commodities that were ineligible for indemnity payments.
50.	7 C.F.R. §760.
51.	Examples of eligible OFSLP commodities include barley, canola, chickpeas (large and small), corn, cotton, crambe, dry peas, flaxseed, grain sorghum, hay (alfalfa and all-hay), lentils, mustard seed, oats, peanuts, rapeseed, rice, safflower seed, sesame seed, soybeans, sunflower seed, and wheat.
52.	7 C.F.R. §760.
53.	7 C.F.R. §760.
54.	For additional information on PPL, see CRS Report R46180, Federal Crop Insurance: Record Prevent Plant (PPL) Acres and Payments in 2019.
55.	USDA, "USDA Announces Block Grants for Three States as Part of Broader Disaster Relief Package."
56.	P.L. 116-94, Division B, §791(c).
57.	USDA, "USDA Opens Wildfires and Hurricane Indemnity Program Plus (WHIP+)."
58.	As of April 14, 2020, approved sugar beet processors include American Crystal Sugar Company, Michigan Sugar Company, Minn-Dak Farmers Cooperative, Snake River/Amalgamated Sugar Company, Southern Minnesota Beet Sugar Cooperative, Western Sugar Cooperative, and Wyoming Sugar Company.