DisasterAssistance Passes Senate Test
Friday,January 24, 2003 By ShawnWade
DisasterAmendment approved by U.S. Senate will provide crop loss assistance to growers,just not the way they might have expected.
Senate actionJanuary 22 saw the approval of a revised Republican disaster assistance plandeveloped by Senate Agriculture Committee Chairman Thad Cochran (R-MS). TheSenate approved the Amendment by a vote of 59-36. The Senate defeated asubsequent attempt to replace the Republican plan with a Democratic alternativethat was projected to cost significantly more.
Final approval ofthe FY03 Omnibus Appropriations Bill occurred late January 23 and puts the fateof the disaster program in the hands of a House-Senate Conference Committee.How the disaster language will fair in the Conference is unknown, althoughAdministration support should work in its favor. The key will be whether or notHouse leaders accept the proposed cuts included in the Senate Budget Bill.
So the bigquestion remains, which plan would have been more beneficial to producers. ThePros and Cons are not all that easy to identify but each approach had its goodand bad points.
Playing a bigrole in the debate was the fact that only $2.5 Billion was truly available topay for crop losses covered by a disaster assistance plan.
Plains CottonGrowers members made it very clear that they preferred implementation of atraditional disaster assistance program and that is the message taken toWashington by PCG Officers and Staff earlier this week.
Several thingsworked against the approval of a traditional disaster assistance program asoffered by Democrats. Among the bigger issues were the higher cost(approximately twice the amount of available funds), a lack of appropriatebudget offsets, and the inability of the Farm Service Agency to conduct the sign-up in a timely manner.
The upside of atraditional disaster program to producers would have been better targeting offunds to farms that suffered qualifying losses.
The Republicanplan has warts of its own, specifically the broader scope of producers that areeligible to receive funds due to no specific requirement that an actual loss beidentified. Residence of an operation in a county designated as a PrimaryDisaster county is all that is necessary to receive a payment. Producers in all25 PCG counties are eligible for payments under the program.
Another knock onthe Republican plan is that the level of assistance is perceived to be far lessthan producers need to offset the affects of poor crops in 2001 and/or 2002.
On the plus sidefor the Republican plan is the fact that assistance can be delivered quickly,payments received will be based on TOTAL direct payments an operation iseligible for under the Farm Security and Rural Investment Act in 2002, and thatbudget offsets paying for the program were included and appear to satisfy theprevious objections of the Bush Administration for fiscal responsibilitywithout opening up provisions of the FSRI Act to revision.
So how does theplan approved compare to a traditional disaster program? The answer couldsurprise people.
The catch for thetraditional approach is that the higher payment amount would have first beenreduced to conform to a specific payment limitation (as has been standardprocedure in past programs) and then further reduced by an estimated 50 percentpro-rata factor to keep costs in line with available funds. It can be assumedthat language requiring a pro-ration of payments would have been insisted on tokeep costs within the savings made available through budget off-sets.
This means thatassuming an $80,000 payment limitation a producer with a loss that exceeded$80,000 would have first been cut back to that level and then further reducedby one-half of that amount (assuming a 50 percent pro-rata), down to $40,000per entity maximum.
Under theRepublican plan a producer who qualifies will be eligible to receive a lump-sumpayment equal to approximately 42 percent of the TOTAL direct payments receivedon all crops for 2002 including ALL enrolled farms, not just farms that hadindividual losses.
This broadens thepot of payments significantly if other crops or farms did not have losses thatwould have increased program eligibility under a traditional approach.
All that remainsis the completion of the Conference Committee before the program could go intoeffect.
PCG will continueto work to improve the final plan wherever possible. Key areas to be emphasizedinclude finding ways to further target funds to those that need it the most andworking to get higher payment levels to those that had greater than 35 percentlosses.
HighPlains Cotton Conference Schedule
HighPlains cotton producers can update their crop production, marketing, andmanagement skills, and learn more about irrigation, fertility, pest managementand farm legislation at several regional Texas Cooperative Extensionagriculture conferences slated in February.
Thisyear’s conference dates and locations are:
Feb. 5 – Sandyland AgConference, Gaines County Community Building, Seminole, 8:30 a.m.
Feb. 7 – SouthwestPanhandle Cotton Conference, Hereford Community Center, Hereford.
Feb 25 – SouthwestCrops Production Conference & Expo, Lubbock memorial Civic Center,registration begins at 7:45 a.m.