As of last week, 32 states were already under some type of federal disaster declaration, with losses expected to total in the billions of dollars.
The disaster aid program (SURE) included in the 2008 Farm Bill will probably not provide enough funding to offset losses, and the program does not make payments to farmers until between 12 and 18 months after the losses, it was noted in the Doane Agricultural Report.
This type of delay requires a lot of cooperation among lending institutions, ag retailers and the farmers who are attempting to produce a crop 2011 once the wet weather and flooding subsides. As suggested, delayed disaster payments are unlikely to keep farmers financially viable without the farmers having other support.
While Congress struggles with writing a new budget and farm bill, the farming disasters of this spring and anticipated shortfall in disaster aid are sidetracking the attempts at budgets cuts.
“Funding for agriculture programs will be under pressure as Congress tries to find ways to reduce the federal budget deficit. However, the Chairs of the Senate and House Agriculture Committees say recent and ongoing natural disasters show the need for continuing farm support programs. There is even some talk about developing an ad hoc disaster aid program to help farmers deal with flooding problems or the severe drought in the southern Plains states,” wrote Rich Pottorff, Doane chief economist and Washington editor.
The 2011 farm bill debate is somewhat contentious, but “any budget agreement reached is expected to reduce or eliminate direct payments to farmers, which currently amount to more than $5 billion per year,” Pottorff also noted.