WASHINGTON, March 12 2014 - Now that USDA officials are promising that new livestock disaster aid will be among the first new farm bill programs out of the shoot, ranchers are rushing to decode the language laying out the programs in the new Farm Bill to see how it differs from the aid available in the 2008.
The livestock portion of the disaster aid is packaged primarily in two initiatives. The Livestock Indemnity Program (LIP) compensates producers for death losses due to natural disasters, while the Livestock Forage Program (LFP), compensates for lost grazing. Together, they look a lot like the livestock disaster programs authored by Senators Baucus and Thune for the 2008 Farm Bill that expired in October 2011. Under that legislation, for the years 2008 through 2011, the Farm Service Agency disbursed $121 million for LIP claims, and $479 million for LFP.
Still, there are a few noteworthy changes in the new Farm Bill.
First, the programs have been made permanent, meaning producers will no longer be left in disaster assistance limbo. That’s where they sit now, as they wait for implementation -- producers haven’t seen LIP or LFP funds since the end of fiscal 2011, two and a half years ago.
The good news is that livestock disaster assistance is also retroactive. Producers will receive payments for the losses they’ve incurred since the funding under the 2008 Farm Bill expired, including those South Dakota ranchers hit hardest by a catastrophic storm last fall. The freak blizzard left nearly 43,000 cattle dead, each worth up to $2,000.
The program has also done away with insurance requirements. Under the 2008 Farm Bill, livestock owners had to invest in either NAP or other insurance product such as a Pasture, Rangeland Forage policy administered by the Risk Management Agency, to be eligible for LIP and LFP payouts. The government probably “wanted the producer to have some investment, some skin in the game,” said Eric Belasco, an agricultural economist at Montana State University. But because not all livestock producers decided to invest in insurance products, the requirement blunted the effectiveness of the program as a safety net, Belasco said.
LFP has been retooled to provide larger payouts for weather disasters, while less severe weather events – moderate drought as opposed to extreme drought, for example – will result in smaller payments. Payment limitations for LFP recipients have also been increased, from $100,000 per producer per year to $125,000. A husband/wife operation may be eligible for up to $250,000.
But aside from weedy policy issues, USDA’s directive has been clear. “Livestock disaster regulations will be ready on or before April 15,” Vilsack said at the NFU Annual Meeting in Santa Fe last week. “They sure as hell better be.”
Though FSA officials declined to provide details on its implementation process, sources close to the agency say it’s taken on more staff to ensure that it will be ready for April. According to a Hill aide familiar with the livestock disaster program, the department should be able to begin issuing payments “within a week” of sign-up.
Livestock producers, for their part, seem pleased with USDA’s emphasis on the program within the larger Farm Bill rollout. Silvia Christen, executive director of the South Dakota Stockgrowers Association, said her group was “thrilled” to see livestock disaster assistance included in the final Farm Bill. Since then, “We’ve been in contact with a lot of FSA offices, communicating back and forth between those offices and producers,” she said.
Organizations like SDSA and their members have been doing something else since livestock disaster assistance was revived in January: looking for paperwork. Documentation is an important part of LIP – USDA requires producers present some form of credible and verifiable evidence that their livestock did indeed die due to a natural disaster before paying out funds.
“With the Livestock Indemnity Program, where you get paid for death losses, the protocol for that is to provide documentation taken at the time,” Belasco said.
During the fall blizzard in South Dakota, state agencies worked hard to help producers document their record losses. “State veterinary offices created a form to be used as third-party verification” of death, Christen said, allowing producers to streamline their documentation process even as they struggled to put their businesses back together.
But producing the right paperwork has been difficult for some. Because LIP payments will be retroactive, producers are expected to hand over paperwork from 2011 onward. “There has been a little more struggle for some of those losses further back, just because so much time has lapsed,” said Christen. Some producers “gave up” on ever seeing LIP payments, and “weren’t as good” with their documentation, she said.
Congressional staff hope USDA will be more understanding about less-than-ideal paperwork from 2012 and 2013. The Agriculture Department believes the most credible documentation includes “receipts from a rendering service or a veterinarian certification. But USDA has been known to deny payments to producers with veterinarians’ sworn statements for weather related death losses that occurred after a natural disaster, concluding that the livestock loss was due to management error instead of an “act of God.” That means producers will have to be careful about what kinds of paperwork they present to USDA.
Producers will also have to work even harder to persuade the department to compensate them for post-storm losses. Livestock that develop a “weakened condition – pneumonia, or some other type of related disease – and then die a week, two weeks, a month” after a natural disaster sometimes aren’t covered by FSA under LIP. A Congressional aide commented that Members of Congress will be working closely with constituents to make certain FSA covers natural disaster related losses no matter when they occur.
Charity has also helped in South Dakota, where “wonderful donations have taken the first bite out of the (fall blizzard) recovery process,” Christen said. A Rancher Relief Fund has dispersed $3.3 million in donations to affected ranchers across the state.
“Now having the Farm Bill in place, it’s a secondary push to get other producers up on their feet,” she said.
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