Congress passes disaster aid package

Colleen Kottke
Wisconsin State Farmer
There is no residue after harvesting corn, making it a great place to use cover crops to help control erosion.

The U.S. House of Representatives passed a disaster assistance package this week that will provide $3 billion to USDA to assist farmers confronting weather-related losses.

House lawmakers voted 354-58 late Monday to approve the oft delayed $19.1 billion disaster aid package that will respond to flooding that besieged the Midwest flooding, but will also help those in southeastern states recover from hurricanes last year and those impacted by the California wildfires. 

Farmers will benefit from the disaster aid which will help cover losses from disasters in 2018 and 2019.  Language in the bill “losses of crops” includes on-farm stored commodities and increases prevented-planting coverage up to 90% of potential losses in 2019.

Trump hailed passage of the bill, tweeting, "Farmers, Puerto Rico and all will be very happy."

The legislation gives the Secretary of Agriculture Sonny Perdue and USDA discretion to decide where and how to spend the $3 billion.

Farmers in the Midwest and in the Corn Belt hope that Perdue revamps the planting guidelines in the latest trade-aid deal. Due to record rainfall and flooding, farmers have fallen weeks behind in their spring planting. 

Many producers are keeping an eye on both the weather forecast and the calendar as USDA officials announced last week that the next round of trade-aid payments are tied to planted acres. In many cases, crop insurance deadlines for corn have come and gone, leaving farmers to wrestle with decisions on whether to risk planting or leave fields unplanted.

Thanks to wet weather, it has been decades since Midwest farmers were so far behind in planting their expected corn and soybean crops. The USDA reported that the planting of the corn crop in Iowa was three weeks behind the five-year average.

Farmers can receive insurance when the weather keeps them from growing a crop, called prevented planting.

According to a recent Farm Journal Pulse poll, 34% of growers surveyed responded that they plan to file for prevent plant payments on some of their acres this year. Around 45 percent are refraining from filing for prevent plant funds, with 21% still undecided.

USDA last week announced a second round of aid designed to offset losses caused by ongoing trade disputes with China, Canada, Mexico and other countries.

Ag Secretary Sonny Perdue said trade assistance would be provided only on acres that have been planted.

That appears to close the door on farmers who have been inundated by rain.

"In order to qualify for trade aid, I have to plant a crop. But in many cases, Mother Nature isn't allowing me to," said Chad Hart, an Iowa State University ag economist.

"It really throws a monkey wrench in what a farmer should do," Hart said. "It adds to the financial stress that farmers are feeling."

U.S. farm income this year is projected to be $69.4 billion, about 45% below a 2013 high.

"Many farmers are banking on the government support to get through this year," he said.

Perdue told reporters earlier this week that a decision on whether unplanted crop acres could be covered under USDA’s $16 billion MFP 2 package would be coming soon.

“I don’t know, frankly, whether we can legally do it or not,” he said. “We are investigating that as we speak. You have to have something to sell or to trade for a tariff impact. I hope to have a definite answer to those producers very soon, hopefully by the end of the week.”

Perdue said the agency is trying to avoid influencing farmers' planting decisions. The agency withheld how much farmers might get in assistance

Mike Naig, Iowa's agricultural secretary, said he doubts cover crops will qualify for trade aid, but he is asking USDA for clarification.

"We believe there needs to be a recognition of the fact" that farmers harmed by weather are further hurt by not qualifying for trade assistance, Naig said.

American Farm Bureau Federation Chief Economist John Newton said farmers are on the front lines at a time when farm income's already pretty low.

"I think without these trade assistance packages we'd see a crisis across farm country," he said.

The Associated Press and Donnelle Eller of the DesMoines Register contributed to this report