New rules for crop disaster assistance

May 25, 2007 | Roger McEowen

 

On May 25, 2007, the President signed into law the military funding bill - The U.S. Troop Readiness Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (Act). The bill is a major piece of legislation that does more than simply provide military funding. Included in the bill is an increase in the federal minimum wage and numerous tax provisions, among other items. One of those “other” provisions is a change in the disaster loss assistance rules for farmers. Under the legislation, farmers would be able to choose to be compensated for either 2005, 2006 or 2007 crop losses (quantity or quality-related losses) due to damaging weather or any related condition, including losses due to crop diseases, insects, and delayed planting.  For 2007 losses, the crop must have been planted before February 28, 2007. The farmer must have purchased crop insurance for the year for which compensation is requested, and must have suffered a 35 percent loss to apply for assistance. If the farmer qualifies for compensation, the payment rate is set at 42 percent of the commodity price. In addition, the combination of income from crop receipts, crop insurance, and disaster assistance cannot exceed 95 percent of what the value of the crop would have been without a loss.  Act, Sec. 9001.