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Disaster relief money helping cash-strapped catfish growers

The catfish industry's cash-strapped producers are set to receive their first-ever federal disaster assistance, and it couldn't come soon enough.

Feed accounts for half the cost of raising catfish and was $220 per ton in Mississippi in 2002. Catfish prices are at the lowest levels in 20 years, and producers are finding themselves in financial stress.

This year, producers are getting a credit at the feed mills of $34 per ton of feed purchased in 2002 to be used to purchase more feed. Mississippi will receive $20 million of the $34 million the U.S. Department of Agriculture earmarked nationally as drought disaster relief for catfish producers. The Mississippi Department of Agriculture and Commerce began distributing these credits in late August.

Jim Steeby, Mississippi State University Extension aquaculture specialist with the National Warmwater Aquaculture Center in Stoneville, Miss., said these disaster relief feed credits will help keep smaller producers financially viable, but won't make anyone rich.

“The payments came late in the feeding year, but it helps with cash flow,” Steeby said. “It's a godsend to smaller producers, but it's barely helping them keep their heads above water.”

Under the program, feed mills certify their customer base from 2002, providing information on how many tons of feed each producer purchased. The state agricultural departments then distribute feed credits to the mills, where producers can cash them in on current feed purchases. Producers who have gone out of business or are no longer feeding their catfish can sell their vouchers.

Hugh Warren, executive vice president of the Catfish Farmers of America, said authorization for this disaster relief came several months ago when President George W. Bush signed the bill appropriating the funds. He said it was a unique, first-time program for catfish farmers.

“Thank goodness there are steps being taken to give relief to our farmers who have been under pressure to get their prices back up for their product,” Warren said.

Terry Hanson, agricultural economist with the Mississippi Agricultural and Forestry Experiment Station, said the drought hurt the production and increased the cost of the grains used in making catfish feed. The cost of feed rose while catfish prices continued down due to the economy and increased imports.

The Trade Adjustment Assistance for Farmers is possibly another relief package on the way for catfish producers. Any commodity can qualify for these federal payments if certain requirements are met. Prices must have been reduced because of foreign imports of that commodity and prices for the last year must be at least 20 percent lower than the average price for the last five years. Participating producers also must receive some type of Extension training.

“If the individual or industry meet these criteria, then it's possible for individual producers to receive this payment,” Hanson said. “This program could give each catfish farmer up to $10,000 and would certainly help distressed farmers.”

Hanson said the Trade Adjustment Assistance is a five-year program that will end in 2007. The first payments could be made in 2004 if the catfish industry is deemed eligible by the USDA Foreign Agriculture Service. Upon certification, producers would have 90 days to contact the Farm Service Agency to apply for assistance.

Warren said the Catfish Farmers of America have petitioned to see if the entire industry qualifies for assistance. If it does qualify — and Warren said CFA's calculations show that it will — each member of the organization will be eligible to receive funds. Eligibility letters will be mailed to let producers know this status.

“We're seeing the effects of what imports have done to our industry, and we're struggling to get some structure back into the trade,” Warren said. “These programs aren't going to solve any problems, but they'll certainly be a help.”

Bonnie Coblentz writes for Mississippi State University Ag Communications.

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