Disaster Programs in the Farm Bill NRevisiting evada Farm Bureau Contact: Daniel Munch, Economist (202) 406-3669 dmunch@fb.org
Going back almost 100 years, the history of the farm bill largely tracks the history of food production in the United States as the legislation evolves to meet the needs of its modern-day constituents – farmers and consumers. Agriculture’s role in providing food security, and in turn national security, to the United States is more important than ever. And now, work on the next farm bill has started during a period of volatility on every front – political, economic, weather and beyond.
In 2021 alone, farmers and ranchers faced over $12.5 billion in crop and rangeland losses associated with events including extreme drought, wildfires, hurricanes, derechos, freezes and flooding. Of that figure, over $6.5 billion in losses were not covered by existing Risk Management Agency (RMA) programs. To help address these losses and others, the farm bill generally authorizes a range of disaster assistance programs to help producers recover from natural disasters. Understanding these existing programs and the ad hoc disaster assistance that has supplemented farm bill programs will provide clarity as 2023 farm bill discussions ramp up.
The 2014 farm bill permanently authorized four agricultural disaster programs for livestock and trees: the Livestock Indemnity Program (LIP); the Livestock Forage Disaster Program (LFP), the Emergency Assistance for Livestock, Honey Bees, and FarmRaised Fish Program (ELAP) and the Tree Assistance Program (TAP). Producers do not pay a fee to participate in these programs and advanced sign-up is not required. They are all administered through the Farm Service Agency (FSA) and funded via the Commodity Credit Corporation (CCC). In fiscal year 2021, $544 million was paid through LFP, $76 million was paid through ELAP, $16 million was paid through LIP and $9 million was paid to producers through TAP. Program expenditures in fiscal year 2022 are expected to increase by 195% across the four programs, with LFP estimated to pay $1.65 billion, ELAP estimated to pay $211 million, LIP estimated to pay $35 million and TAP estimated to pay $8 million. Payments cannot exceed $125,000 per year through LFP. There are no limits on payments for LIP, 24 NOVEMBER/DECEMBER 2022
ELAP or TAP, though to be eligible a producer’s average adjusted gross income over three recent taxable years cannot exceed $900,000.
ELAP). The Bipartisan Budget Act of 2018 removed LIP from the $125,000 payment limitation; the limitation now only applies to LFP.
LIP provides payments to eligible livestock owners and contract growers for livestock deaths in excess of normal mortality caused by extreme or abnormal damaging weather, disease, and attacks from wild animals reintroduced or protected by the federal government. The program also compensates producers when an animal is injured as a direct result of an eligible loss condition but is not killed and is sold at a lower price. Covered livestock includes beef and dairy cattle, bison, hogs, sheep, goats, alpacas, deer, elk, llamas, reindeer, caribou, horses, emus, chickens, ducks, geese and turkeys. LIP does not cover wild roaming animals, pets or livestock used for recreational purposes. The payment rate is 75% of the average fair market value of the deceased animal. Rates are reported by the USDA for each type of livestock annually (for example $1,077.94 for adult beef bull, $21.72 for a tom turkey, and $108.52 for a boar 451 pounds or more). A complete list of 2022 payment rates can be found here: www.fsa.usda.gov/Assets/USDA-FSAPublic/usdafiles/FactSheets/2022/ fsa_lip_livestockimdemnityprogram_ factsheet_2022.pdf.
LFP makes payments to eligible producers who have experienced grazing losses on drought-affected pastureland or on rangeland managed by a federal agency due to a qualifying fire. Producers must own, cash or share lease, or be a contract grower of covered livestock (beef and dairy cattle, bison, deer, elk, emus, horses, goats, llamas, reindeer, and sheep) during the 60 days prior to the beginning date of a qualifying drought or fire. They must also provide pastureland for livestock that is physically located in a county affected by a qualifying drought during the normal grazing period for the county or is managed by a federal agency where grazing is not permitted due to fire. For drought, payments are 60% of the estimated monthly feed cost. For producers who sold livestock because of drought the payment is equal to 80% of the estimated monthly feed cost. Payment frequencies are dependent on drought intensity levels published weekly for a specific county by the U.S. Drought Monitor. Categories are displayed in Table 1. No changes were made to LFP in the 2018 farm bill.
The 2018 farm bill amended certain parts of the LIP program; these changes went into effect in 2019. They provided eligibility flexibility to unweaned livestock losses from extreme cold regardless of vaccine protocol or management practice. They also expanded coverage for livestock losses due to disease cause or transmission by a vector that is not controlled by vaccination or an acceptable management practice (diseases previously covered under
ELAP provides payments to producers of livestock, honeybees and farm-raised fish and 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. Since honeybees and fish are not covered by LIP or LFP, ELAP provides assistance for losses in colonies and fish in excess of normal mortality due to eligible adverse weather or conditions such as colony collapse disorder. For livestock losses ELAP covers livestock feed and grazing losses not due to drought or wildfires on federally managed land and losses resulting from the additional cost of transporting water to livestock due to an eligible drought.
Livestock Indemnity Program (LIP):
For eligible contract growers the payment is based on 75% of the natural average input cost for the applicable livestock. Payments for livestock sold at reduced prices 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):
Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP)
The Progressive Rancher
The 2018 farm bill expanded ELAP to assist for costs related to inspection for cattle tick fever regardless of findings. It also provided that payments made to veteran farmers and ranchers will be based on a national payment rate of 90%. As mentioned earlier, livestock losses due to diseases transmitted by vectors that cannot be controlled by vaccines were moved from ELAP to LIP. Lastly, the 2018 farm bill removed the $125,000 payment limitation for ELAP. In September 2021, USDA updated ELAP to cover feed transportation costs for drought-impacted ranchers. Many ranchers who transported livestock to new feed sources were left out in the original policy, so transporting livestock to feed was added in a later version. The policy allows reimbursements of 60% (90% for socially disadvantaged, beginning, or veteran farmers or ranchers) of feed transportation costs above what would have been incurred in a normal year. This rate is then multiplied by the national average price per mile to transport a truckload of eligible livestock or livestock feed, multiplied by the actual number of additional miles the feed or livestock was transported by the producer in excess of 25 miles per truckload of livestock or livestock feed and for no more than 1,000 miles per truckload of livestock or feed during the program year. The restriction on providing assistance for transportation of water to animals on Conservation Reserve Program land was removed. It also amended “eligible drought” to cover situations in which any area of a county has been rated by the drought monitor as D2 (severe drought) or worse for at least eight consecutive weeks. 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 are generally covered by crop insurance or the Noninsured Crop Disaster Assistance Program (NAP). Nursery trees include ornamental, fruit, nut and Christmas trees produced for commercial sale. Trees used for pulp or timber are ineligible. Producers must incur a mortality loss in www.progressiverancher.com
