Agriculture Secretary Vilsack Announces New Help for Livestock Producers with Changes to Emergency Loans, Crop Insurance | USDA Newsroom
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News Release

Release No. 0282.12
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Office of Communication (202) 720-4623

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Agriculture Secretary Vilsack Announces New Help for Livestock Producers with Changes to Emergency Loans, Crop Insurance

Secretary Designates 23 Additional Counties Due to Drought

WASHINGTON, Aug. 22, 2012—Agriculture Secretary Tom Vilsack today made a series of announcements that continue to underscore the Obama Administration's ongoing work to help farmers, ranchers and businesses impacted by the most severe drought in 50 years. The Secretary said the U.S. Department of Agriculture (USDA) intends to file special provisions with the federal crop insurance program to allow haying or grazing of cover crops without impacting the insurability of planted 2013 spring crops, a move that can help provide much needed forage and feed this fall and winter for livestock producers. In a separate step, Vilsack will modify emergency loans, allowing loans to be made earlier in the season helping livestock producers to offset increased feed costs and those who have liquidated herds.

"At the direction of the President, USDA continues to work as swiftly as possible to get help to America's farmers and ranchers by providing flexibility within existing programs, particularly those that assist livestock producers," said Vilsack. "In the weeks ahead, the Obama Administration will continue to stand with and support our farmers, ranchers and business as they recover from this drought. Still, it is important that Congress pass a Food, Farm and Jobs Bill as soon as possible, to give USDA more tools to help and to give more certainty to producers in this difficult time."

Earlier today, Vilsack also designated 33 additional counties in 8 states as natural disaster areas—23 counties due to drought. In the past six weeks, USDA has designated 1,821 counties in 35 states as disaster areas—1,692 due to drought—while USDA officials have fanned out to more than a dozen drought-affected states as part of a total U.S. government effort to offer support and assistance to those impacted by the drought.

The changes announced today by Secretary Vilsack will benefit America's livestock and crop producers alike by improving procedures and lessening requirements during a time of disaster.

For the 2013 crop year, USDA's Risk Management Agency (RMA)—which manages and operates the Federal Crop Insurance Corporation—intends to file special provisions statements to allow haying or grazing of cover crops without impacting the insurability of planted 2013 spring crops. This flexibility will help farmers, if they choose, plant a cover crop without risking crop insurance coverage in 2013, providing much needed forage and feed this fall and winter.

In a separate announcement, USDA's Farm Service Agency (FSA) will make changes to the emergency loan program that will help producers obtain the loans earlier in the season. Previous to this change, emergency loan eligibility was based on crop losses that were determined after the production cycle; loan amounts were based on production during normal years. With these changes, producers no longer are required to wait until the end of the production cycle to obtain a loan, benefiting livestock producers who need assistance today to help offset increased feed costs, as well as producers liquidating herds as a result of the drought.

At the direction of the President, Secretary Vilsack is helping coordinate an Administration-wide response that has included: the National Credit Union Administration's increased capacity for lending to customers including farmers; the U.S. Department of Transportation's emergency waivers for federal truck weight regulations and hours of service requirements to get help to drought-stricken communities; and the Small Business Administration's issuance of 71 agency declarations in 32 states covering 1,636 counties, providing a pathway for small businesses, small agricultural cooperatives and non-farm small businesses that are economically affected by the drought in their community to apply for Economic Injury Disaster Loans (EIDL). President Obama also stressed the need for the entire Administration to continue to look at further steps it can take to ease the pain of this historic drought.

Last week, President Obama announced USDA's intent to purchase up to $170 million of pork, lamb, chicken, and catfish for federal food nutrition assistance programs, including food banks, which will help relieve pressure on American livestock producers and bring the nation's meat supply in line with demand. In addition, within the last six weeks, USDA has opened the Conservation Reserve Program to emergency haying and grazing, lowered the borrower interest rate for emergency loans, and worked with crop insurance companies to provide flexibility to farmers. USDA has also announced:

  • Authorized up to $5 million in grants to evaluate and demonstrate agricultural practices that help farmers and ranchers adapt to drought.
  • Granted a temporary variance from the National Organic Program's pasture practice standards for organic ruminant livestock producers in 16 states in 2012.
  • Authorized $16 million in existing funds from its Wildlife Habitat Incentive Program (WHIP) and Environmental Quality Incentives Program (EQIP) to target states experiencing exceptional and extreme drought.
  • Initiated transfer of $14 million in unobligated program funds into the Emergency Conservation Program (ECP) to help farmers and ranchers rehabilitate farmland damaged by natural disasters and for carrying out emergency water conservation measures in periods of severe drought.
  • Authorized 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.
  • Lowered the reduction in the annual rental payment to producers on CRP acres used for emergency haying or grazing from 25 percent to 10 percent in 2012.
  • Simplified the Secretarial disaster designation process and reduced the time it takes to designate counties affected by disasters by 40 percent.

The U.S. Drought Monitor indicates that 63 percent of the nation's hay acreage is in an area experiencing drought, while approximately 71 percent of the nation's cattle acreage is in an area experiencing drought. Approximately 85 percent of the U.S. corn is within an area experiencing drought, down from a peak of 89 percent on July 24, and 83 percent of the U.S. soybeans are in a drought area, down from a high of 88 percent on July 24. On Aug. 10, USDA estimated the 2012 U.S. corn crop to be the eighth largest in history, at roughly 10.8 billion bushels. In 1988, when U.S. farmers were impacted by another serious drought, total production was 4.9 billion bushels.

During the week ending August 19, USDA's National Agricultural Statistics Service reported that 51 percent of U.S. corn and 37 percent of the soybeans were rated in very poor to poor condition, while rangeland and pastures rated very poor to poor remained at 59 percent for the third consecutive week.

Visit www.usda.gov/drought for the latest information regarding USDA's drought response and assistance.

The Obama Administration, with Agriculture Secretary Vilsack's leadership, has worked tirelessly to strengthen rural America, maintain a strong farm safety net, and create opportunities for America's farmers and ranchers. U.S. agriculture is currently experiencing one of its most productive periods in American history thanks to the productivity, resiliency, and resourcefulness of our producers. A strong farm safety net is important to sustain the success of American agriculture. USDA's crop insurance program currently insures 264 million acres, 1.14 million policies, and $110 billion worth of liability on about 500,000 farms. In response to tighter financial markets, USDA has expanded the availability of farm credit, helping struggling farmers refinance loans. Since 2009, USDA has provided more than 128,000 loans to family farmers totaling more than $18 billion. Over 50 percent of the loans went to beginning and socially disadvantaged farmers and ranchers.

Primary counties and corresponding states designated as disaster areas today for drought and other reasons:

California [drought]

Alpine

Georgia [drought]

Forsyth

Hall

Idaho [drought]

Bannock

Bear Lake

Cassia

Fremont

Oneida

[other]

Bannock

Camas

Fremont

Nez Perce

Payette

Bonneville

Cassia

Gem

Oneida

Teton

Indiana [drought]

Randolph

Kansas [drought]

Marshall

Nebraska [drought]

Gage

Johnson

Nuckolls

Richardson

Jefferson

Nemaha

Pawnee

Thayer

Tennessee [drought]

Dickson

Henderson

Utah [drought]

Beaver

Iron

Piute

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