Agriculture Secretary Tom Vilsack has announced two new pieces of disaster assistance for farmers and ranchers impacted by the nation's worsening drought. First, Vilsack is expanding emergency haying and grazing on approximately 3.8 million acres of conservation land to bring greater relief to livestock producers dealing with shortages of hay and pastureland. Second, the secretary announced that crop insurance companies have agreed to provide a short grace period for farmers on insurance premiums in 2012. As a result, farming families now have an extra 30 days to make payments without incurring interest penalties on unpaid premiums.
Vilsack also signed disaster designations for an additional 218 counties in 12 states as primary natural disaster areas due to damage and losses caused by drought and excessive heat. Counties designated on Aug. 1 are in Arkansas, Georgia, Iowa, Illinois, Indiana, Kansas, Mississippi, Nebraska, Oklahoma, South Dakota, Tennessee and Wyoming. More than half (50.3%) of all counties in the United States have been designated disaster areas by USDA in 2012, mainly due to drought.
"President Obama and I will continue to take swift action to get help to America's farmers and ranchers through this difficult time," says Vilsack. "The assistance announced today (Aug. 1) will help U.S. livestock producers dealing with climbing feed prices, critical shortages of hay and deteriorating pasturelands. Responding to my request, crop insurance companies indicated that producers can forgo interest penalties to help our nation's farm families struggling with cash flow challenges. The Obama Administration intends to continue helping those who farm or ranch and live and work in rural America through this period of hardship."
Emergency Haying and Grazing
In response to the expanding drought, Secretary Vilsack announced that livestock producers and other participants in the Conservation Reserve Program (CRP) will now be able to hay and graze acres that have been ineligible in the past. Many of these additional acres have wetland-related characteristics and are likely to contain better-quality hay and forage than on other CRP acres. There are approximately 3.8 million acres that will now be eligible for emergency haying and grazing, subject to certain conditions. Haying and grazing may only occur under strict compliance rules to help minimize impacts on these sensitive specialty practices. In addition, USDA will conduct follow-up monitoring and evaluation of these opened CRP areas to study the effects of the drought and USDA's emergency haying and grazing actions. Producers should contact their local Farm Service Agency offices for additional information.
Federal Crop Insurance
Vilsack also announced that crop insurance companies have agreed to provide a short grace period for farmers on insurance premiums in 2012. To help producers who may have cash flow problems due to natural disasters, Vilsack sent a letter to crop insurance companies asking them to voluntarily defer the accrual of any interest on unpaid spring crop premiums by producers until Nov. 1, 2012. In turn, to assist the crop insurance companies, USDA will not require crop insurance companies to pay uncollected producer premiums until one month later.
During the 2012 crop year, USDA has designated 1,584 unduplicated counties across 32 states as disaster areas – 1,452 due to drought – making all qualified farm operators in the areas eligible for low-interest emergency loans. The U.S. Drought Monitor indicates that 66 percent of the nation's hay acreage is in an area experiencing drought, while approximately 73 percent of the nation's cattle acreage is in an area experiencing drought. During the week ending July 29, USDA's National Agricultural Statistics Service reported that U.S. soybeans rated 37% very poor to poor, matching the lowest conditions observed during the drought of 1988. NASS also reported that 48% of the U.S. corn crop was rated very poor to poor, while 57% of the nation's pastures and rangeland are rated very poor or poor condition.
Last week, President Obama met with Secretary Vilsack and members of his Cabinet to discuss additional steps the Administration could take to help farmers, ranchers and business owners manage and recover from the current drought. Later in the week, President Obama directed Secretary Vilsack to convene a meeting of the White House Rural Council to update members and stakeholders on the Administration response to the drought. Vilsack will update Rural Council members and stakeholders again next week on new steps taken by the Administration to combat the drought.
Under Vilsack's leadership, USDA has announced a variety of steps to get assistance to producers impacted by the worsening drought, including:
- Allowing additional acres under CRP to be used for emergency haying or grazing. The action allows lands that are not yet classified as "under severe drought" but that are "abnormally dry" to be used for haying and grazing.
- Allowing producers to modify current Environmental Quality Incentives Program (EQIP) contracts to allow for grazing, livestock watering, and other conservation activities to address drought conditions.
- Authorizing haying and grazing of Wetlands Reserve Program (WRP) easement areas in drought-affected areas where haying and grazing is consistent with conservation of wildlife habitat and wetlands. USDA has expedited its authorization process for this haying and grazing.
- Encouraging crop insurance companies to provide a short grace period for farmers on unpaid insurance premiums, as some farming families can be expected to struggle to make ends meet at the close of the crop year.
- Reducing the emergency loan interest rate from 3.75% to 2.25%.
- Lowering the reduction in the annual rental payment to producers on CRP acres used for emergency haying or grazing from 25% to 10% in 2012.
- Simplifying the Secretarial disaster designation process and reduced the time it takes to designate counties affected by disasters by 40%.
USDA agencies have been working for weeks with state and local officials, as well as individuals, businesses, farmers and ranchers, as they begin the process of helping to get people back on their feet. The U.S. Small Business Administration has also made 63 agency declarations in 33 states covering 1,675 counties, providing a pathway for those affected to apply for an Economic Injury Disaster Loan (EIDL). SBA's EIDLs are available to small, non-farm businesses and small agricultural cooperatives that are economically affected by the drought in their community.
Primary counties and corresponding states designated as disaster areas Aug. 1