The Agriculture Department will provide larger disaster-aid payments for losses in 2018 than for 2019 and will offer prevent-plant bonus payments of up to 15% for farmers who were unable to seed crops this spring due to the heavy Midwest flooding.
Farmers who lost crops to hurricanes, wildfires and other disasters in 2018 will receive 100% of their intended payments, while losses for 2019 will be covered at 50%, under rules for the disaster program that were announced Monday by USDA's Farm Service Agency.
Producers who made prevent-plant insurance claims this year will receive a 10% bonus payment, plus an additional 5% if their insurance coverage included the harvest price option, according to the agency.
The program, officially dubbed WHIP+, will begin sign-up on Wednesday and will cover losses from disasters that took place in 2018 and 2019 with some retroactive coverage to 2017 losses as well.
The disaster aid, which was authorized by a supplemental appropriations bill enacted in June, also includes payments for grain lost to flooded bins in Nebraska, Iowa, and the Dakotas earlier this year.
FSA Administrator Richard Fordyce said stored-grain payments will be based on 75% of the crop’s 2018 value, based on the assumption that the grain was harvested last year. But he also said USDA viewed the flooding as a 2019 loss, so it was unclear if producers will receive 50% or 100% of that 75% payment.
On a call with reporters to discuss the WHIP+ provisions, Fordyce declined to get into specifics about the department’s implementation of the disaster bill’s prevented planting language, saying that was still subject to further discussion with the White House Office of Management and Budget.
However, a USDA release and a department webpage on the program said all producers with “flooding or excess moisture-related prevented planting insurance claims” in the 2019 calendar year will receive a “supplemental disaster (‘bonus’) payment equal to 10 percent of their prevented planting indemnity, plus an additional 5 percent will be provided to those who purchased harvest price option coverage.”
Fordyce said he couldn’t say exactly when the PP provisions will be formally announced, “but I’ve got to think it’s soon,” potentially in the next “week or two.” WHIP+ also contains provisions to address losses from hurricanes hitting the southeast, wildfires in the west, and flooding in the Midwest. But producers will receive different payments depending on when the disaster that hit their operation took place.
Congress capped the total cost of the disaster program at $3.1 billion. To manage the funding, Fordyce said the agency would "begin" with the 50% limit for 2019 losses.
The program’s coverage extends into 2017 to cover losses to blueberries and peaches.
According to USDA, producers can enroll in both WHIP+, which covers the loss of value from the tree, bush, or vine itself, and the Tree Assistance Program, which provides cost-sharing for replanting or rehabilitating eligible trees. Payments from both programs could be made on the same acreage.
USDA altered the payment limits for this program, potentially allowing a married couple to earn as much as $500,000 in disaster payments. Each individual can qualify for up to $250,000 in disaster aid as long as $75% of his or her income comes from farming. For other producers, the limit will be $125,000 per person.
Asked for the rationale for the higher $250,000 limit, Fordyce said it was “more commensurate with some of the losses some of our producers across the country have experienced.”
Under a 2017 program, the top limit was $900,000 for producers who derived at least 75% of their income from farming.
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