AGRICULTURAL DISASTER ASSISTANCE 2004

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AGRICULTURAL DISASTER ASSISTANCE2004

• Wes Harris
• Special Projects Coordinator
• Center for Agribusiness and Economic Development

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FRANCES
BONNIE
IVAN
CHARLEY
JEANNE
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(No Transcript)
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USDA Disaster Assistance Programs for Georgia 2004

• Emergency Conservation Program (ECP)
• Emergency Loan Program
• Agricultural Disaster Assistance
• Mil Con Approps Conference Report (H.R. 4837)

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Emergency Conservation Program (ECP)

• Emergency funding and TA to rehabilitate farmland
  damaged by natural disasters
• Funds appropriated by Congress
• Administered by local and state FSA committees
• Local committee authorized to implement ECP for
  all disasters except drought subject to
  availability of funds

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ECP

• COCs determine land eligibility physical
  assessment of damage
• Land eligibility - if untreated
• impair or endanger the land
• materially affect the lands productive
  capability
• represent unusual damage (recurrence)
• be so costly to repair, Fed assistance only
  means to return land to
  productive ag use

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ECP

• Program participants receive cost share up to 75
  for approved practice by COC
• 50,000 or less per person per disaster approved
  by COC
• 50,001 - 100,000 approved at SOC
• TA from USDA-NRCS

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ECP Rehabilitation of Farmland

• Remove debris
• Restore fences and conservation structures
• Provide water for livestock in drought situations
  (emergency water conservation)
• Other measures as approved by SOC and USDA-FSA
  National office

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ECP Availability

• Producers check with local FSA office regarding
  ECP sign-up periods
• Sign-up periods are set by the COC

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Emergency Loan Program (EM)

• Helps producers recover from production and
  physical losses due to drought, flooding or other
  natural disaster or quarantine.

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EM Loan Uses

• Restore or replace essential property
• Pay all or part of production costs associated
  with the disaster year
• Pay essential family living expenses
• Reorganize the farming operation
• Refinance certain debts

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EM Loan Eligibility

• Must own or operate land located in a county
  declared by the president as a disaster area or
  designated by the secretary of Agriculture as a
  disaster or quarantine area
• Experienced family farm operators
• US citizens
• Suffered at least 30 loss crop, livestock,
  property

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EM Loan Eligibility

• Acceptable credit history
• Collateral for security
• Repayment ability
• Unable to receive credit from commercial sources

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EM Loan Requirements

• Must keep acceptable farm records
• Operate with farm plan approved by FSA
• May require financial management training program
• Obtain crop insurance

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EM Loan Limit

• Borrow up to 100 of actual production or
  physical losses
• Maximum amount 500,000

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EM Loan Terms

• Crop, livestock, and non-real estate losses from
  1 7 years
• Physical loss to real estate 30 40 years

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EM Interest Rate

• Current annual interest rate for Emergency Loans
  3.75

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EM Misc.

• Applications within 8 months of the countys
  disaster designation date
• Emergency Loans are a temporary source of credit,
  and borrowers are reviewed periodically to
  determine ability to return to commercial credit

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Emergency Disaster Designations and Declaration
Process

• Presidential major disaster declaration
• USDA Secretarial disaster designation

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Presidential Declaration

• Must be requested by Governor
• Administered through Federal Emergency Management
  Agency (FEMA)
• FEMA notifies FSA of the primary counties named
  in Presidential Declaration

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Secretarial Designation

• Must be requested by Governor or authorized
  representative (Ag Commissioner)
• Must be due to a natural disaster
• Can be within three months of the ending date of
  the disaster
• Minimum 30 production loss to on crop in the
  county

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Eligible Natural Disasters

• Blizzard
• Cyclone
• Earthquake
• Hurricane
• Tornado
• Severe hail
• Excessive rain
• Heavy snow

• Ice and/or high wind
• Electrical storms
• Sustained drought
• Sustained high/low temps
• Related pests
• Epidemics
• Fires

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Secretarial Designation Steps

• Notify Governors office
• FSA county office assembles information for
  Disaster Assessment Report (DAR)
• FSA NHQ notifies SED SED instructs county
  offices named to convene County Emergency Board
  (CEB) and complete the DAR

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Secy Designation Steps

1. DAR submitted to State Emergency Board (SEB) for
   review and processing
2. SEB, upon approval, submits DAR to NHQ
3. Emergency Preparedness and Programs Branch (EPPB)
   approves and sends to Secy
4. Secretary approves or declines

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SD - Information Requirements

• Previous 5 year avg production history for the
  crops listed on the DAR
• Farm price avg for previous 3 years
• Dates crops suffered damage and causal conditions
• DAR signed by CEB and SEB chairs
• CEB and SEB meeting minutes

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FSA Programs Initiated by Declarations/Designation
s

• Either will trigger low interest FSA Emergency
  Loans to eligible producers in all primary and
  contiguous counties

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FSA Programs Initiated by Declarations/Designation
s

• Other programs initiated by Declaration or
  Designation for primary counties only
• Livestock Compensation Program (LCP)
• Livestock Assistance Program (LAP)
• Livestock Indemnity Program (LIP)
• Flood Compensation Program (FCP)

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(No Transcript)
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Secretarial Designation

• 127 counties in Georgia have received Secretarial
  Disaster Designation for 2004
• as primary or contiguous

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Agricultural Disaster Assistance H.R. 4837

• Crop Disaster Assistance
• Livestock Assistance Program
• Tree Assistance Program
• Dairy Assistance Program
• Cottonseed Assistance Program
• Private forest land assistance program (TAP II)
• Pecan producers assistance (TAP III)

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Agricultural Disaster Assistance

• 2.9 Billion Program
• Offset by reduction in Conservation Security
  Program budget
• Funds Emergency Conservation Program
• 50 million current 100 million future

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Crop Disaster Assistance

• Same loss calculations as 2001 program
• 65 of historic yields
• 65 of crop insurance market price elections
  w/ins
• 60 of price without insurance
• Quality loss program

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Crop Disaster Assistance

• Elect 2003 or 2004
• No declaration/designation necessary
• 80,000 payment limit per entity
• No proration of benefits

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Crop Disaster Assistance

• If non-insured 2003 or 2004 election must
  obtain buy-up for next two years for insurable
  crops or NAP coverage for two years
• 2.5 million AGI Limit (1985 Bill)
• 95 Limit of value of crop absent of loss
• (CDA)(crop ins)(sales)lt(.95)Normal year sales

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Source USDA-FSA modified by WH UGA
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Crop Disaster Program Example

• Cotton insured at 70 with .63 and 650 APH
• Actual yield 200 lbs/acre
• (.65)(650) 422.5 lbs/acre
• CDP prod422.5-200222.5 lbs/acre
• (222.5)(.63)(.65) 91.11 per acre

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Crop Disaster Program Example

• Crop insurance payment
• (.70)(650) 455 lbs/acre guarantee
• 455 200 255 lbs indemnity
• (255)(.63) 160.65 per acre
• 160.65 Premium payment
• 160.65 12.00 148.65 crop insurance payment

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Crop Disaster Program Example

• Normal value
• (APH)(NASS or APH)
• (650)(.63) 409.50
• Sales (200 lbs prod)(.63) 126.00
• 95 CAP
• CDP Crop Ins Sales lt (.95) Normal Value
• 91.11 148.65 126.00 365.76 total
  revenue
• (.95)(409.50) 389.03 gt 365.76 no cap

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Quality Loss Program

• Eligible crops suffering minimum of 20 quality
  reduction (price)
• Exclusive of production loss
• All crops except ornamental nursery, Christmas
  trees, aquaculture, honey, turf grass, maple sap,
  and ginseng
• Must provide receipts

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QLP - Calculations

• Multiply 65 of affected production times 65 of
  the loss in value due to quality

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QLP - Example

• 100,000 lbs cotton 0.52 co avg loan value
• 20 minimum (.80)(.52) 0.416/lb
• 0.36 received on cotton produced
• (100,000 lbs)(.65) 65,000 lbs allowable
  prod.
• (.52 .36)(.65) 0.104 /lb factor
• (65,000 lbs ap)(.104 factor) 6,760

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Livestock Assistance Program

• Provides financial assistance for loss of grazing
  to livestock producers for either years 2003 or
  2004
• County must have received a Presidential
  Declaration or Secretarial Designation of
  disaster after January 1, 2003
• 40,000 payment limit

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Livestock Assistance Program

• Must suffer at least a 40 or greater loss of
  grazing for minimum of 3 consecutive months
• COC will determine loss from producers
  certification and type of pasture
• Percentage of loss cannot exceed the maximum
  percentage loss for the county as determined by
  COC with cap of 80

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Livestock Assistance Program

• Must be owner of livestock for 3 months prior to
  eligible disaster period and provide the pasture
  or grazing lands
• Value of assistance not to exceed 50 of the
  lesser of the total value of lost feed needs or
  the total value of lost eligible pasture

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LAP Calculations Lost feed needs

• N number of days in payment period
• F daily feed grain equivalent per animal
• adjusted for types and weight classes
• M 5 year national average market price of
  corn
• A the number of eligible animals
• P of grazing loss
• LAP NFMAP

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Lost Feed Needs Example

• N 95 days
• F 15.7 lbs corn for mature cow
• M 0.04 per lb
• A 1 animal
• P 50 grazing loss
• LAP (95)(15.7)(.04)(1)(.5) 29.83

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LAP Calculations Lost Eligible Pasture

• T number of acres of each pasture type
• C carrying capacity of pasture type
• F daily feed grain equivalent per animal
• adjusted for types and weight classes
• M 5 year national average market price of corn
• N number of days in payment period
• P of grazing loss
• LAP (T/C)(F)(M)(N)(P)

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Lost Eligible Pasture Example

• T 1 acre
• C 1 animal/acre
• F 15.7 lbs
• M 0.04 per lb
• N 95 days
• P 50 loss of grazing
• LAP (1/1)(15.7)(.04)(95)(.5) 29.83

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LAP

• Value of assistance not to exceed 50 of the
  lesser of the total value of lost feed needs or
  the total value of lost eligible pasture
• Therefore examples would be equal and payment
  would be 50 of either
• (29.83)(.5) 14.92 per animal or per acre

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Tree Assistance Program (TAP)

• Financial assistance to replace eligible trees,
  bushes, and vines damaged by disaster
• Trees, bushes, and vines that produce an annual
  crop for commercial purpose
• Pulp, timber, Christmas trees, and nursery tree
  stock are ineligible

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TAP Qualifications

• Suffer losses of 15 or greater
• Own the plants when disaster occurred
• Be in conservation compliance
• Do not exceed 2.5 million AGI
• Replace plants within 12 months of approval

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TAP Evidence of Loss

• Plant damage must be visible and obvious to COC
  or if no evidence remains provide acceptable
  proof of existence
• Receipts for original purchase of plants
• Documentation of labor and equipment used to
  plant or remove plants
• Chemical, fertilizer, or other related receipts

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TAP Payments

• 75 of the actual costs to replant
• or
• The calculated amount using established rates
• whichever is less
• 75,000 payment limit per entity
• Each entity is limited to 500 qualifying acres

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TAP

• Trees, bushes, and vines may be replanted to a
  field different from loss field
• Replanted trees, bushes, and vines may be
  different than those damaged as long as they have
  the same general end use, as determined by FSA

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Dairy Assistance

• 10,000,000 for payments to dairies sustaining
  production and/or spoilage losses
• Only in counties with Presidential Declaration

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TAP II

• 10,000,000 assistance to private forest
  landowners with less than 5,000 acres of forested
  crop for purposes of debris removal, replanting
  of timber, and other such purposes
• Only in counties with Presidential Declaration

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TAP III

• 8,500,000 assistance under TAP to pecan
  producers provided that funds will cover costs
  associated with pruning, rehabilitating, and
  other activities as determined by Secretary
• Only in counties with Presidential Declaration

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Cottonseed Assistance

• 10,000,000 assistance to producers and first
  handlers of the 2004 cottonseed
• Only in counties with Presidential Declaration

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Provisions

• CCC will announce period that cotton gins
  representing producers in Presidential Disaster
  Declaration counties may apply for cottonseed
  payments

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Process

• Gins apply to CCC based on reported weight of
  cotton lint of bales ginned from eligible
  producers
• Upon receipt of all gin applications, CCC will
  estimate the total cottonseed for payment
• The payment rate will be determined by dividing
  the available 10 million by the total cottonseed
  for payment

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Payment Sequence

• CCC provides cottonseed payments to cotton gins
• CCC requires gins to share payments with
  producers (as in past programs)
• The effect of low cottonseed prices absorbed by
  producer not gin

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Calculating Applicants Payment Quantity

• Multiply
• the applicants weight of eligible lint
• by
• national Olympic avg of estimated cottonseed
  per lb of ginned lint for the past 5 years

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Calculating Payment Rate

• Divide
• the total available program funds
• by
• the total eligible payment quantity
• Unless the calculation creates an excess rate of
  payment in which case an alternative method will
  be used as determined appropriate by CCC

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Emergency Conservation Program ECP

• Provides 50 million for assistance to
  participants in the ECP
• Provides additional 100 million for expenses
  resulting from natural disasters

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www.fsa.usda.gov

• wlharris_at_uga.edu
• 912.871.6130