Jim Callan of James Callan and Associates in Washington D.C. has developed the following Washington, D.C. update focusing on the recent federal actions – both in Congress and USDA – that are important to NDGGA.
Ag Disaster Assistance Legislation:
H.R. 267, 2020 WHIP+ Reauthorization Act, approved July 27: The bill that passed in the House Agriculture Committee July 29, H.R. 267, 2020 WHIP+ Reauthorization Act, included an Amendment in the Nature of a Substitute (ANS) that will extend WHIP+ for both 2020 and 2021. The bill also includes key reforms to improve the overly burdensome application process that delayed the program in 2018 and 2019.
Summary of H.R. 267 —
- Causes of loss:
- Maintains the causes of loss that were included for 2018 and 2019
- Specifically refers to: smoke taint in wine grapes due to wildfires; high winds; derechos; excessive heat; freeze (including a polar vortex).
- Expands the drought trigger from D3 on the drought monitor to a Secretarial drought designation (which is D2 for eight consecutive weeks), or more severe, and contiguous counties.
- Includes losses due to other disruptions (including power outages or curtailments) associated with the effects of a qualifying disaster event.
- Administrative Improvements:
- Continues the requirement that participants in this program must purchase crop insurance coverage of at least 60%, or NAP where insurance isn’t available, for two years after receiving assistance.
- Includes language intended to simplify the program, including by directing USDA to streamline the application process and to reduce the workload of county offices.
- Use of net indemnities – under the existing WHIP+ rules, the payment calculation accounts for the actual value received and any gross crop insurance indemnity. The bill would account for the producer-paid premium in the calculation.
- Unharvested acres are treated in the same manner as under NAP.
- Clarifies that all insured acreage shall be eligible, regardless of whether such acreage is the initial acreage or not.
- On payment limitations, the bill maintains the existing regulations, with some exceptions:
- Specialty crops or higher value crops are subject to the 2017 WHIP payment limitations;
- Average Adjusted Gross Income is based on the 2017 – 2019 tax years;
- Limits are renewed for each of 2020 and 2021; and
- CFAP specialty entity rules apply for operations structured as corporations, LLCs, limited partnerships, trusts, and estates.
- Includes a mechanism for payments to be made to producers through sugar processors and dairy coops.
- Continues the authority for USDA to provide payments in the form of block grants.
- Provides for an authorization of appropriations of $8.5 billion over the 2020 and 2021 timeframe, along with a set aside of funds for administration of the program.
Senate Consideration of WHIP+ enhancements in the FY2022 Agriculture Appropriations Bill:
- The Senate Appropriations Committee also approved August 4, its version of ag disaster relief, within the FY2022 Agriculture Appropriations Bill. Here are a few key details.
According to Sen. Hoeven’s office, the bill includes more than $7 billion in disaster assistance to help farmers and ranchers with losses due to drought and other natural disasters as part of the Senate’s Fiscal Year (FY) 2022 Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations bill.
- $6.28 billion for disaster assistance to aid producers who suffered losses due to droughts, hurricanes, wildfires, floods, and other qualifying disasters in calendar years 2020 and 2021.
- $750 million for livestock producers for losses incurred during 2021 due to drought or wildfire. This disaster assistance will build on top of existing farm bill programs for livestock producers.
- Funding to meet demand for farm direct, guaranteed and emergency loans, which provide farmers and ranchers with access to capital.
Other Highlights of the FY2022 Ag Appropriations Bill:
- $5 million for the Wetland Mitigation Banking program, providing an important resource for farmers to remain conservation compliant.
- Directs the National Agricultural Statistics Service (NASS) to provide information on how the agency can improve the accuracy of their reports.
Agriculture Research in FY2022 Ag Appropriations Bill:
- Additional $9 million for maintenance and repair of the Agriculture Research Service (ARS) facilities, like the Edward T. Schafer Agricultural Research Center.
- Maintains formula research funding for land-grant universities, including NDSU.
- Increases the following research funding:
- $1 million increase for the Barley Pest Initiative.
- $1 million increase for the Healthy Soils Initiative.
- Also maintains funding for the Wheat and Barley Scab Initiative.
Strengthening Rural America in FY 2022 Ag Appropriations Bill:
- $700 million for the ReConnect Program, a rural broadband loan and grant pilot program.
- $5 million for the Rural Innovation Stronger Economy (RISE) Grant Program, which supports innovation clusters in rural regions.
- RISE aligns with Sen. Hoeven’s ongoing work to advance the development and adoption of the next generation of precision agriculture technologies.
- To this end, Sen. Hoeven worked to previously provide $10 million across FY2020 and FY2021 for RISE, secured language to prioritize projects like Grand Farm and pressed USDA to finish implementing the program, an effort which was successfully completed in June.
What Happens Next in Congress?:
- Note: The House bill is authorizing legislation, while the Senate bill is through the appropriations process. These relief measures will need to be reconciled by the House and Senate, and Congress will have to agree upon a final vehicle. This would occur after the current August recess and will take time to finish, with no guarantee all provisions would become law.
RMA Extends Deadlines, Waives Interest Deferral for Emergency Drought Relief:
- The U.S. Department of Agriculture (USDA) announced, July 27, its Risk Management Agency (RMA) will authorize Approved Insurance Providers (AIPs) to extend deadlines for premium and administrative fee payments, defer and waive the resulting interest accrual and allow other flexibilities to help farmers and ranchers through widespread drought conditions in many parts of the nation. Learn More
RMA Authorizes Emergency Procedures to Help Drought-Impacted Producers:
- RMA said the new crop insurance flexibilities (announced last month) are part of USDA’s broader response to help producers impacted by drought, in the West, Northern Great Plains, Caribbean and other areas. Emergency procedures allow insurance companies to accept delayed notices of loss in certain situations, streamline paperwork, and reduce the number of required representative samples when damage is consistent. These flexibilities will reduce burdens on both insurance companies and producers to help mitigate drought effects.
- Producers should contact their crop insurance agent as soon as they notice damage. The insurance company must have an opportunity to inspect the crop before the producer puts their crop acres to another use. If the company cannot make an accurate appraisal, or the producer disagrees with the appraisal at the time the acreage is to be destroyed or no longer cared for, the insurance company and producer can determine representative sample areas to be left intact and maintained for future appraisal purposes. Once an insured crop has been appraised and released, or representative strips have been authorized for later appraisal, the producer may cut the crop for silage, destroy it, or take any other action on the land including planting a cover crop.
- Additional information on these emergency procedures is available on RMA’s Crop Insurance and Drought Damaged Crop webpage.
Producers Can Now Hay, Graze and Chop Cover Crops Anytime and Still Receive Full Prevented Planting Payment:
- In welcome news for producers, especially in North Dakota in the future, RMA announced on July 6, that “Agricultural producers with crop insurance can hay, graze or chop cover crops for silage, haylage or baleage at any time and still receive 100% of the prevented planting payment. Previously, cover crops could only be hayed, grazed, or chopped after November 1, otherwise the prevented planting payment was reduced by 65%.” This was a change long sought by NDCGA and other ND ag groups, and Sen. Hoeven’s office said we can take a lot of the credit for RMA’s action.
Further background from RMA —
- The U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) added this flexibility as part of a broader effort to encourage producers to use cover crops, an important conservation and good farming practice. Cover crops are especially important on fields prevented from planting as they help reduce soil erosion and boost soil health. “We work diligently to ensure the Federal crop insurance program helps producers effectively manage risk on their farms while also conserving natural resources,” said Acting RMA Administrator Richard Flournoy. “We are dedicated to responding to the needs of producers, and this flexibility is good for agriculture and promotes climate smart agricultural practices. We are glad we can better support producers who use cover crops.”
- RMA recognizes that cover crops are not planted as an agricultural commodity but rather with the primary purpose for conservation benefits. For the 2021 crop year and beyond, RMA will not consider a cover crop planted following a prevented planting claim to be a second crop. But RMA will continue to consider a cover crop harvested for grain or seed to be a second crop, and it remains subject to a reduction in the prevented planting indemnity in accordance with the policy.
- This decision to allow flexibility for the 2021 crop year and to make the change permanent for future years builds on the advanced research and identified benefits cover crops have supporting healthy soils and cropland sustainability efforts. Additionally, this decision aligns with the 2018 Farm Bill’s designation of cover crops as a good farming practice.