Vilsack: Farm bill needed now
Speaking in Iowa in late July, U.S. Secretary of Agriculture Tom Vilsack called on Congress to take action immediately to pass the 2012 Farm Bill. He said the new bill is the only way to address disaster needs.
Addressing the Iowa Farm Bureau’s economic summit in Ames July 24, Vilsack specifically called on U.S. House leaders to move on the farm bill to help farmers and ranchers hit hard by the ongoing, widespread drought.
“The House leadership has expressed the opinion that crop insurance alone is sufficient,” said Vilsack. “That leaves our livestock producers with no help at all, which affects hundreds of thousands of people. That is not acceptable.”
• U.S. Ag Secretary Tom Vilsack calls on House to act now and pass new farm bill.
• He says a new bill is the only way to effectively address disaster needs.
• USDA is taking what steps it can by using its limited discretionary authority.
USDA is doing what it can within its discretionary authority, such as allowing haying and grazing of Conservation Reserve Program acres to provide some relief, but “our tools are limited” until a new farm bill is in place, said Vilsack. An extension of the existing 2008 bill will not work because some disaster programs have expired, and they wouldn’t be restored by an extension. Only passage of a new bill can re-establish relief programs, he said.
USDA is allowing modification of EQIP contracts. Farmers in the Environmental Quality Incentives Program can have it modified to allow for prescribed grazing, livestock watering facilities, water conservation or other activities to address drought. USDA’s Natural Resources Conservation Service will work with farmers to help them implement additional practices. Vilsack also authorized haying and grazing of Wetland Reserve Program easements in drought areas, provided conservation practices for wildlife habitat and wetland preservation are maintained.
Crop insurance premiums
Vilsack has taken action on crop insurance premiums. Policyholders unable to pay their premiums in a timely manner accrue an interest penalty of 1.25% per month until payment is made. In a letter to crop insurance companies, he’s asked them to give farmers who are struggling financially because of drought extra time to pay their premiums before they are hit with a penalty.
While crop insurers have extended the deadline once to Sept. 30, Vilsack has asked for it to be extended until Nov. 1 for spring-planted crops. In turn, to assist the crop insurance companies, USDA will not require them to pay uncollected producer premiums until one month later.
To deliver assistance to those who need it most, USDA recently reduced the interest rate for emergency loans from 3.75% to 2.25%, while changing the reduction in the annual rental payment to producers on CRP acres used for emergency haying or grazing from 25% to 10%.
Vilsack has also simplified the secretarial disaster designation process and reduced the time it takes to designate counties affected by disasters by 40%.
Lack of rain and unrelenting heat this summer has left much of the country suffering through the worst drought in more than 50 years, he noted. More than 60% of the United States is affected, including the Midwest, where crops are suffering under the poorest conditions since 1988. More than 1,369 U.S. counties, about one-third of the nation’s total, have been declared disaster areas as of late July, allowing farmers access to emergency loans.
Iowa crop ratings plummet
Much of Iowa, the leading corn and soybean producer, is classified as in extreme drought; the remainder is in severe drought. As of late July, USDA rated 77% of the state’s corn in “fair to poor” condition. Harry Hillaker, state climatologist, gave a historic comparison. “This has been the hottest start for July and the summer season since 1936,” a year when most of Iowa’s hottest temperature records were set.
USDA has the authority to operate five disaster assistance programs, but its oversight expired in September, when funding for those programs ceased in the 2008 Farm Bill. Especially hard-hit by drought are livestock producers who don’t have disaster programs and cannot fall back on crop insurance to cover losses, like crop producers can.
About 90% of Iowa’s farmers are estimated to have some form of crop insurance. Federal aid pays for about 60% of the insurance premiums, based on target prices. Potential losses of this summer’s drought are unknown because farmers have the option to wait until harvest when a new target loss price will be set.
It will replace the $5.68-per-bushel corn price set by USDA this past spring. At the recent Iowa Farm Bureau summit in Ames, Jeff Plagge of Norwest Financial said preliminary estimates of the total loss for this year range widely — from $10 billion to $40 billion in Iowa, depending on if and when it rains.
For additional information and updates about USDA drought relief efforts, visit www.usda.gov/drought.
parched land: U.S. Ag Secretary Tom Vilsack (right) visited the farm of Eric Cress near Center Point to get a firsthand look at conditions in late July. The eastern half of Iowa has been classified as “extreme drought” for much of this summer; the rest of the state is in “severe drought.”
This article published in the August, 2012 edition of WALLACES FARMER.
All rights reserved. Copyright Farm Progress Cos. 2012.