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Congressman: Farmers hit by Michael face severe liquidity issue, ‘19 crop at risk

High winds from Hurricane Michael in Turner County, Ga., blew cotton to the ground. Photo provided by UGA CAES.
If farmers hit by Hurricane Michael have to wait until October 2019 for federal disaster payments, they won’t be farming in October 2019.

If farmers heavily damaged by Hurricane Michael don’t get financial assistance soon, they will not be planting a crop in 2019.

U.S. Congressman Austin Scott (R-GA) took the podium and faced a friendly but pensive crowd of around 550 Georgia farmers, lenders and agribusiness professionals who had gathered at the University of Georgia Tifton Campus in Tifton, Ga., Oct. 22 to hear USDA officials explain currently available disaster programs to help them recover from what is estimated to be up to $3 billion in agricultural damages in Georgia alone caused by Hurricane Michael.

The storm hit Oct. 10.

“It obviously matters how close you were to the storm and what the loss is and what the crop is (or was). Cotton in our area (south-central Georgia) really took it on the chin. … But as you move southwest, I don’t think it really matters what you had, whether it was pine trees or pecan trees or cotton (or any other commodity), the losses down there in some cases are total no matter what. I want you to know that I know you are hurting,” he said, adding congressional leadership in impacted areas remain in contact with each other, trying to figure out what they can do for growers.

Immediate Assistance

“The one thing that I can tell you is that I have a real sense of urgency about, and that is liquidity, and how we get money, especially to our traditional row crop farmers, as fast as possible. I’ve heard it from lenders; we’ve talked to bankers as well as producers, and I want to tell you what I think will happen as we go back into Washington,” he said.

One option to get money in the hands of growers sooner rather than later is to use the 2017 Wildfires and Hurricanes Indemnity Program, or WHIP, a $2.3 billion package created by Congress to help producers impacted by hurricanes and wildfires during 2017. There is still a balance in that fund, he said.

“It doesn’t mean we won’t have to do another appropriation for this disaster but, and I will tell you somewhere between Nov. 13 and Dec. 7, I expect that we will take the last disaster bill (WHIP) that was for the 2017, and we’ll strike the date 2017 and insert 2018. Now that won’t be the end of it,” he said.

The WHIP payment schedule for the 2017 disasters hasn’t gone well so far and won’t work for the scale of losses Michael brought, he said. As of mid-October 2018, only 6 percent of the WHIP payments for 2017 losses have made it to growers. The reason? A Farm Service Agency faulty software system failed to automatically load data, and FSA personnel are having to manually input information. He hoped FSA never does business again with the person who developed the software and sues to get its money back.

“Our losses in 2017 were not as great as they are now; our losses are so big now that if our farmers don’t get payment until October of ’19, they won’t be farming in October of ’19, and that is the message that I have conveyed to the leadership of this country, to our president and to the leadership of the House. It is the message that we are carrying to the Senate, that we have to have the payments sooner rather than later because we weren’t only going to get hit for ’17, which we had losses from storms, we are going to lose the majority of the ’18 cotton crop certainly, but we’ll lose the 2019 crop, too, because it won’t ever be planted.”

Funding to Growers

As crop insurance adjusters visit affected farms, he advised growers to provide adjusters with all the specific data they can and to receive all the data they can get from adjusters in return. “The more data they can give you, the better off you’ll be in the long run,” he said.

An option being discussed to get funding to growers faster is through those crop insurance adjusters, who can calculate the WHIP payment when visiting the farm, “and (we) can either pay it through them or take that calculation and allow our FSA, with an audit trail, to go ahead and make the payment at that stage,” he said.

Payments may not be as simple for timber and pecan producers, he said. “I’m still open to suggestions, and USDA today has done a good job explaining some options, and forestry (officials) have given good advice on what to do. But we are going to find a way for those types of production where it takes longer to start gathering production,” he said.

“I heard a lot in this meeting. We know you are hurting, and we are hurting with you and a lot of people up there (in Washington) are working to make this thing happen sooner rather than later on disaster payments. We need to get you liquidity as fast as we can,” he said.

Some key points of the 2017 WHIP include:

  • USDA is determining compensation by a producer’s individual losses rather than an average of losses in the area. Producers are subject to a $125,000 payment limitation, meaning a producer can’t receive more than $125,000 for losses. But a producer can receive a higher payment if three-fourths or more of their income is derived from farming or another agricultural-based business. Producers who derived 75 percent of their income in tax years 2013, 2014 and 2015 will be subject to a $900,000 payment limitation.
  • Both insured and uninsured producers are eligible to apply for WHIP. But all producers receiving 2017 WHIP payments will be required to purchase risk management coverage, either crop insurance at the 60 percent coverage level or Noninsured Crop Disaster Assistance Program (NAP) coverage if crop insurance is not available. The program requires producers to have coverage for the next two crop years. 
  • Producers are required to file acreage reports and report production for the applicable crop years.

During the meeting in Tifton, Brett Martin, chief of farm programs for the Farm Service Agency, highlighted current FSA programs that can help growers, including:

  • Noninsured Crop Disaster Assistance Program
  • Livestock Indemnity Program
  • Emergency Assistance for Livestock, Honeybees and Farm Raised Fish Program
  • Tree Assistance Program
  • Emergency Conservation Program
  • Emergency Forest Restoration Program

The Georgia Peanut Commission recorded the disaster session in Tifton, and it can be viewed at the GPC website.

U.S. Congressman Austin Scott speaks in Tifton, Ga., Oct. 22 at a disaster assistance meeting attended by about 550 Georgia farmers damaged by Hurricane Michael.

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