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October 11, 2004   Email to Friend 

HOUSE AND SENATE REACH AGREEMENT ON DISASTER RELIEF AID
Keith Gray
(202) 434-8212
October 11, 2004

WASHINGTON, D.C. Congress has passed a $14 billion bill that will aid victims in hurricane-stricken states, including Alabama farmers. In a rare weekend session, Congress completed work on the supplemental bill that contained $2.9 billion for farmers who had experienced weather-related losses in either 2003 or 2004.

"Thanks to efforts in part from the Alabama delegation and particularly Sen. (Richard) Shelby, a member of the conference committee, we were pleased that several provisions were added that would aid Alabama farmers specifically," said Alabama Farmers Federation President Jerry Newby. "These include $8.5 million for farmers in the pecan industry to help cover costs for pruning, rehabilitation, and replanting. The bill also contains $10 million for private forest landowners in declared disaster areas to help pay for debris removal, reseeding, and replanting of timber. There is also a $10 million program for cottonseed loss assistance in counties that were covered by a Presidential disaster declaration."

The bill had earlier been attached to the Department of Homeland Security Bill and later was attached to the Military Construction Bill in an effort to speed action on the measure and get President Bush's signature. The House had passed the bill earlier in the weekend, and the Senate approved the legislation on Monday after a protracted delay by Sen. Tom Harkin (D-IA) who opposed how the drought aid was paid for by spending cuts in the Farm Bill.

The bill specifically contains $150 million for the Emergency Conservation Program for clean up and rehabilitation of farmland and pasture damaged by the hurricane, $9 million for oyster bed reseeding and rehabilitation of the Gulf Coast, $25 million for rural housing assistance grants and housing repair loans by USDA and $68 million for the Rural Community Advancement Program of which $50 million would be available for water and waste disposal grants.

Payments would be available to farmers that experienced weather-related losses in either 2003 or 2004. Farmers would be eligible for a supplemental payment that would cover quality and quantity losses and benefits would be limited to 95 percent of what the crop would have been worth absent the disaster. Additionally, there is an $80,000 payment limit per person or entity, and a means test of $2.5 million overall for persons engaged in agriculture production. The payment rate would be at 65 percent of the covered crop insurance price or at 65 percent of the state average price if crop insurance were not available. If the producer was eligible to purchase crop insurance for the crop and failed to do so, they would receive a payment at 60 percent of the crop insurance policy price, and would be required to purchase crop insurance for the next two years.

The supplemental spending bill that contained the hurricane aid did not contain spending offsets, but the drought aid was offset by capping the Conservation Security Program (CSP) at $6 billion. Currently the CSP program is an uncapped entitlement, and its estimated 10-year cost is $9 billion. This cap is not expected to decrease producer participation.

The Alabama Farmers Federation had worked with other agriculture groups to insist that the Farm Bill not be reopened to pay for the drought aid, and the cuts to the CSP will be addressed when the Farm Bill is reauthorized in 2007. USDA will be implementing these regulations for this disaster aid in the next 30-60 days.

Click here to download the House Ag Committee's summary of the disaster provisions


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