Disaster Aid Package Signed into Law, Few Details

June 6, 2019
Kristine A. Tidgren

Update: On June 10, USDA issued this Q & A.

President Trump has just signed H.R., 2157, the $19.1 billion disaster relief bill recently passed by Congress. This package should provide much-needed relief for producers most impacted by recent natural disasters. Below is a summary of provisions within this new law. As discussed, a number of questions remain regarding how this aid will be distributed and its potential impact on specific farmers.

USDA-Administered

The law provides $3,005,442,000 in direct farm disaster assistance for:

Necessary expenses related to losses of crops (including milk, on-farm stored commodities, crops prevented from planting in 2019, and harvested adulterated wine grapes), trees, bushes, and vines, as a consequence of Hurricanes Michael and Florence, other hurricanes, floods, tornadoes, typhoons, volcanic activity, snowstorms, and wildfires occurring in calendar years 2018 and 2019 under such terms and conditions as determined by the Secretary.

This is general language with many potential recipients and much USDA discretion. The law is written to cover losses to stored grain (which is not eligible for crop insurance) and losses arising from prevented planting. Until we receive guidance, however, it is unclear how these dollars will be distributed. Specifically, the law provides that the USDA Secretary may provide assistance for losses in the form of block grants to eligible states and territories and that such assistance may include compensation for forest restoration and poultry and livestock losses. The law specifies:

  • Tree assistance payments may be made to eligible orchardists or nursery tree growers of pecan trees with a tree mortality rate that exceeds 7.5 percent (adjusted for normal mortality) and is less than 15 percent (adjusted for normal mortality), for losses incurred during calendar year 2018.  
  • In the case of producers impacted by volcanic activity that resulted in the loss of crop land, or access to crop land, the Secretary shall consider all measures available, as appropriate, to bring replacement land into production.
  • Not more than $7,000,000 shall be available for payments to agricultural producers whose Whole Farm Revenue Protection indemnity payments were reduced following 2018 crop year losses due to assistance received through state-legislated agriculture disaster assistance programs.
  • The total amount of payments received through disaster aid and the Federal Crop Insurance Act or the Noninsured Crop Disaster Assistance Programs (NAP) shall not exceed 90 percent of the loss. Payments to producers not covered by these programs shall not exceed 70 percent of the loss.
    • In the case of a crop for which FCIC offers a revenue insurance policy, the expected value of the crop is to be determined using the greater of the projected price or the harvest price
      • The law does not detail how prevented planting claims would be compensated.
  • Producers receiving payments shall be required to purchase crop insurance where crop insurance is available for the next two available crop years, excluding tree insurance policies.
    • Producers receiving payments under this heading shall be required to purchase coverage under NAP where crop insurance is not available in the next two available crop years.

In addition to the above aid, the law tasks USDA with administering the following:

  • $480 million in emergency forest restoration expenses related to natural disasters in 2018 and 2019. (FSA)
  • $558 million for an emergency conservation program to cover expenses arising from natural disasters in 2018 and 2019. (FSA)
  • $435 million for watershed and flood prevention operations related to the consequences of natural disasters in 2018 and 2019. (NRCS)
  • $150 million for small rural communities impacted by natural disasters in 2018 and 2019. (RDCF)

U.S. Army Corps of Engineers

The law provides $575 million in the Mississippi River and Tributaries account and $908 million in the Operation and Maintenance account to repair damages to Corps’ projects arising from natural disasters.

Federal Emergency Management Agency

The law includes a provision encouraging FEMA to use a stricter, more rigid methodology when determining whether to repair or rebuild facilities damaged by certain storms.

Substance Abuse and Mental Health Services

The law earmarks $100 million for the Substance Abuse and Mental Health Services Administration to increase access to mental health and substance abuse treatment and prevention for those impacted by the covered disasters.

Non-Disaster Aid Provisions

The law also includes several non-disaster provisions. Generally, the new Market Facility Program payments (those payments made to farmers to compensate them for damages from trade disputes) are limited to $125,000 per operator and restricted to those producers with average adjusted gross income at or below $900,000. The law inserts a waiver to make producers with more than $900,000 in gross income eligible for MFP payments if at least 75 percent of their average AGI is derived from farming, ranching, or forestry related activities. This waiver applies to individuals and entities. The $125,000 payment limitation remains.

The law also includes a non-disaster provision requiring FCIC to offer whole farm revenue protection insurance for hemp in 2020.

What’s Ahead?

This package should provide some much-needed relief for producers most impacted by recent natural disasters. Until details are released, however, its impact on specific producers is unclear. Secretary Perdue has expressed concern that farmers not base planting decisions on potential government program payments or disaster aid. We remain hopeful that more details regarding both the recently-announced 2019 Market Facilitation Program and the new disaster aid package will issue shortly. We will continue to monitor developments, particularly any new guidance released by USDA.

CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

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