Implementing 2018 Farm Bill, crop insurance, disaster aid and other programs
Bill Northey, USDA Undersecretary of Farm Production and Conservation, appeared this morning before the House Ag Subcommittees on General Farm Commodities and Risk Management and Livestock and Foreign Agriculture. After noting average net cash farm income for farm businesses is forecast to increase 11.4% to $81,900 in 2019, Northey gave the following updates on various USDA farm, crop, conservation, disaster and trade mitigation programs:
2018 Farm Bill Implementation
- Dairy Margin Coverage (DMC) program: As of Sept. 16, 20,647 dairy producers have enrolled in DMC. Approximately $276.8 million has been paid out. Producers have until September 20, 2019, to sign up.
- Dairy producers who elected to participate in the Risk Management Agency’s (RMA) Livestock Gross Margin (LGM) program in 2018 were able to retroactively participate in the Margin Protection Program (MPP-Dairy) for 2018. This enrollment opportunity ended May 10. Over 400 (414) participants retroactively enrolled and nearly $8.15 million has been paid to producers through this retroactive coverage.
- RMA’s Dairy Revenue Protection (DRP) insurance product: During the several months since initial sales started, DRP has covered over 37 billion pounds of milk, which represents about 15% of total milk production.
- Federal crop insurance program: Total liability in the program is more than $105 billion on more than 372 million acres for crop year 2019.
- RMA opened its Whole-Farm Revenue Protection (WFRP) policy to cover hemp. For the 2020 crop year, hemp can be insured under this program provided the producer has a contract and meets applicable federal and state regulations. Whole-Farm Revenue Protection allows coverage of all revenue for commodities produced on a farm up to a total insured revenue of $8.5 million. To address initial concerns about developing eligible production records to include hemp under WFRP policies, RMA proactively issued guidance earlier this year that allows hemp to be grown without voiding a producer’s existing WFRP for 2019.
- 2018 Farm Bill required RMA to quickly update its Annual Forage insurance policy to offer a Dual Use Option, which the agency began offering for the 2020 crop year in May for select counties of six Great Plains states. Producers who select this option can insure their small grains crop with both an Annual Forage Policy for grazing and a multi-peril Small Grains Policy for grain.
- NRCS, RMA, and FSA also developed new guidelines and policy provisions for the treatment of cover crops, which add more flexibility in determining the date when cover crops must be terminated in order to remain eligible for crop insurance. Producers can now be assured that their insurance will take effect at time of planting the insured crop. Cover crop management practices are covered by Good Farming Practice provisions, and the guidelines are no longer a requirement for insurance take effect.
- 2018 Farm Bill also made changes to the FSA-administered Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. ARC is an income support program that provides payments on historical base acres when actual crop revenue declines below a specified guarantee level. PLC provides payments on historical base acres when the effective price for a covered commodity falls below its effective reference price, set by Congress in the farm bill. Covered commodities include wheat, oats, barley, corn, grain sorghum, rice, soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame seed, dry peas, lentils, small chickpeas, large chickpeas, peanuts and, added in 2018, seed cotton. A few mandatory and discretionary changes were made, and FSA has readily implemented those.
- The 2019 ARC/PLC enrollment began Sept. 3, 2019 and will run through March 15, 2020. The 2020 ARC/PLC enrollment will begin Oct. 7, 2019, and run through June 30, 2020. Enrollment for subsequent years (2021-2023), will begin Oct. 1 of each year and run through March 15 of the following year.
- FSA’s Marketing Assistance Loans provide producers interim financing at harvest time to meet cash flow needs without having to sell their commodities when market prices are typically at harvest-time lows. The 2018 Farm Bill increased loan rates for all loan commodities except minor oil seeds, wool, mohair, honey, peanuts and upland cotton. These loans may require producers to utilize them as a prerequisite to obtain secondary financing.
- The FSA’s Noninsured Crop Disaster Assistance Program, or NAP, provides financial assistance to producers of noninsurable crops when low yields, loss of inventory or prevented planting occur because of natural disasters. FSA implemented Farm Bill provisions to strengthen this vital option. For example, buy-up coverage under NAP is now part of permanent program authorization. Basic coverage has a payment limitation of $125,000 per person or legal entity, while the payment limitation for buy-up coverage is a separate $300,000. Service fees to apply for coverage have increased, while the premium amounts for buy-up NAP coverage remained unchanged. Beginning, limited-resource and targeted underserved producers remain eligible for a waiver of the NAP service fee, and qualified veteran farmers and ranchers are now eligible for a service fee waiver and premium reduction if they meet certain criteria.
- Beginning in 2020, NAP indemnity payments may be collected in addition to RMA’s Whole-Farm Revenue Protection indemnity payments when a producer is insured under both plans.
- Signups for continuous Conservation Reserve Program (CRP) and Conservation Reserve Enhancement Program were held June 3 to August 23, 2019. FSA is still planning a CRP general signup in December 2019, with a CRP Grasslands signup to follow.
- NRCS’ Environmental Quality Incentives Program, Conservation Stewardship Program and Agricultural Conservation Easement Program have continued operating under current regulations consistent with new Farm Bill provisions, ensuring customers had no lapse in service. Interim rules and associated policies are under development in preparation for fall (tentatively October) publication and fiscal 2020 program delivery.
- NRCS has made progress on implementing new provisions under the farm bill, including the Feral Swine Eradication and Control Pilot Program, a joint project with the Animal and Plant Health Inspection Service (APHIS) that directs $75 million to help control the runaway feral swine population plaguing much of the country. NRCS accepted project proposals June 20 to Aug. 19. NRCS also announced $25 million available for On-Farm Conservation Innovation Trials, including a Soil Health Demonstration Trial. Through On-Farm Trials, NRCS and partners will collaborate to encourage the adoption of innovative practices and systems on agricultural lands. Signups ran from May 15 to July 15, 2019.
- NRCS announced that it is accepting proposals for the Regional Conservation Partnership Program. Currently, there are 375 active RCPP projects with close to 2,000 partners. Partners are leveraging nearly $1 billion in NRCS investment with close to $2 billion in non-NRCS dollars.
- On August 27, FSA published its first crop acreage data report for 2019, which includes information on crops planted, prevented from planting and failed acres through August 22, 2019. Agricultural producers reported they were not able to plant crops on 19.56 million acres in 2019, which marks the most prevented plant acres reported since FSA began releasing the report in 2007.
- USDA is increasing flexibility in both program rules and delivery, including: Deferring interest charges on crop insurance premiums for two months; extending the deadline to file acreage reports in 13 states that were heavily impacted; updating the haying and grazing date for producers who planted cover crops on prevented plant acres; offering special sign-ups in 10 states through the Environmental Quality Incentives Program for assistance to plant cover crops; and providing a minimal payment through MFP for cover crops with the potential to harvest.
- More than 8,900 applications were received in the 10 states that offered a special sign-up through the Environmental Quality Incentives Program for assistance to plant cover crops or implement other disaster recovery practices. Of those, it is anticipated that over 2,200 contracts will be funded on over 300,000 acres with an investment of over $13 million.
- As of Sept. 2, RMA has paid roughly $2.2 billion in claims related to prevented planting for the 2019 crop year.
- Congress provided a total of $19 billion in assistance through the Disaster Relief Bill, including $3 billion to address agricultural losses.
Disaster Relief Act of 2019
- USDA’s WHIP+ builds on the 2017 Wildfires and Hurricanes Indemnity Program (WHIP), authorized by the Bipartisan Budget Act of 2018. It will provide payments to eligible producers who suffered eligible crop, tree, bush and vine losses resulting from hurricanes, floods, tornadoes, typhoons, volcanic activity, snowstorms and wildfires that occurred in the 2018 and 2019 calendar years. In addition, assistance will be provided to producers who experienced milk losses, on-farm stored commodity losses, were prevented from planting in 2019, or whose harvested wine grapes were adulterated.
- Congress also provided nearly $1.5 billion in funding for the Emergency Conservation Program (ECP), the Emergency Forest Restoration Program (EFRP) and the Emergency Watershed Protection Program (EWP.) ECP and EFRP, administered by FSA, provide financial and technical assistance to agricultural producers, ranchers and forest landowners with farmland (ECP) and nonindustrial private forestland (EFRP) for rehabilitation expenses when damaged by natural disaster events, such as flooding, hurricanes, tornados, wildfire and drought.
- Congress provided $558 million for ECP and $480 million for EFRP. As of August 2019, $276.8 million in ECP assistance and $19.2 million in EFRP assistance was provided to help landowners recover from natural disasters.
- EWP, administered by NRCS, helps local communities recover after a natural disaster strikes. The program offers technical and financial assistance to help local communities relieve imminent threats to life and property caused by floods, fires, windstorms and other natural disasters that impair a watershed. As of July 2019, over $528 million in assistance was provided to states to help communities recover from disasters. In late July, NRCS announced an additional $200 million in funding for 11 weather-affected states.
- The Market Facilitation Program (MFP-2) will provide up to $14.5 billion in direct payments to agricultural producers who have been affected by retaliatory tariffs on U.S. farm goods. FSA opened signup July 29, 2019 and it runs through Dec. 6, 2019. As of Sept. 16, nearly 260,000 applications have been filed, $3.81 billion has been paid to producers and the webpage had 194,000 visits. In the 2018 MFP, USDA helped more than 590,000 producers with $8.6 billion in assistance provided.