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Senate Passes Drought Aid Legislation

posted on January 24, 2003


Hello, I'm Mark Pearson.

The nation's financial community spent most of the week in a funk. Worries over the prospect of war in the Middle East and concerns over the ability of U.S. companies to profit amid continued caution from American consumers led to steep sell-offs on Wall Street.

More immediately, in farm country the weather this year has rapidly become the dominant economic worry.

Storms and freakish cold in the South and East are exacting a serious toll on fruit producers. Most growers fear trees, as well as fruit, could be casualties. For farmers in the north the question is how much damage the cold dry weather has done to the winter wheat crop. Longer-term, farmers worry about sub-soil moisture levels that are critical to crops planted in the Spring. For many the drought is a continuing condition. Many farmers are now finding that the multi-billion dollar safety net, also known as the 2002 Farm bill, has some serious holes in it. Farm state lawmakers are scrambling to shore up the holes with disaster assistance packages.

 

Senate Passes Drought Aid Legislation

Last summer, a 752 million dollar assistance package was passed to compensate livestock producers for drought-related losses. That Republican package, supported by the President, was much smaller than a multi-billion dollar relief bill previously proposed by the Democrats.

This week, after a good deal of legislative wrangling, a three-point-one billion dollar agriculture disaster assistance package came out of the Senate as part of a larger general spending bill. This current aid legislation is again much less than democrats had wanted.

The aid package would provide funds to drought-stricken farmers who grew crops in any county declared a disaster area. Affected farmers could receive up to 42 percent of the subsidies that would be expected in a year of down markets. But, there is a caveat: farmers applying for the aid must agree to purchase federal crop insurance to guard against further disasters. Failure to purchase the insurance would mean paying the government back for any aid money received.

The bill provides 50 million dollars to cotton growers, 80 million to sugar beat growers, and 100 million to fruit growers, in addition to funds for major crops such as corn, beans, peanuts and tobacco.

While republicans claim the structure of the assistance package will speed payments to farmers in need, democrats are concerned that farmers who suffered no crop damage will be able to claim thousands of dollars simply because their farms were in counties with disaster declarations. The aid bill still must pass the scrutiny of lawmakers in the House.

Even a small payment could be helpful in farm country. The 2002 farm bill has provisions offering financial relief in years of low prices, but current tight commodity supplies have generated a non-counter-cyclical year and thus no government money. Years where supply and demand rewards producers with high prices are little consolation to those without a crop.

 


Tags: agriculture Congress disaster relief drought livestock news weather