LegiStorm

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: 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; 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; 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 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.