2014 Farm Bill Relief for Drought and Fire Conditions

by | Jul 29, 2014 | Agribusiness, Blog

Drought or abnormally dry conditions are affecting every state West of the Mississippi River and many on the East Coast, with much of the Southwest under long-term severe, extreme or exceptional drought conditions.   In response, The Agricultural Act of 2014 (2014 Farm Bill) provides some relief to producers that suffer loss from drought, grazing losses, disease and fire.    Ranchers and farmers need to report these losses within 30 days of discovering the loss.  

The following is a summary of the various programs from the 2014 Farm Bill

Livestock Indemnity Program (LIP)

droughtProvides benefits to producers for livestock deaths in excess of normal mortality rates caused by adverse weather.

Program Requirements

  • Payments are equal to 75% of the market value of the applicable livestock on the day before the date of death as determined by the Secretary
  • The producer must have legally owned the eligible livestock on the day the livestock dies
  • The livestock must
    • have died on or after October 1, 2011, and;
    • No later than 60 calendar days from the ending date of the applicable adverse weather event, and;
    • In the calendar year for which benefits are paid
  • Livestock maintained for commercial use as part of a farming operation
  • Contract growers (LIP eligibility for contract growers is limited to poultry and swine); must have possession and control of the eligible livestock on the day the livestock died and possess a written agreement with the eligible livestock owner setting the specific terms, conditions and obligations of parties involved.

Payments and Limitations

  • LIP Payments are calculated by multiplying the national payment rate for each livestock category by the number of eligible livestock in each category
  • National payment rate = 75% of the average fair market value of the livestock
    • A contract grower’s LIP payment will be reduced by the amount of monetary compensation received from their contractor for the loss of income suffered from the death of livestock under contract
  • For 2012 and subsequent years, no person or legal entity, excluding a joint venture or general partnership, may receive directly or indirectly, more than $125,000 total in payments under LFP, ELAP, and LIP combined.
  • In applying the limitation on average adjusted gross income (AGI), an individual or entity is ineligible for payment under LIP if the average AGI of the individual or entity exceeds $900,000

Sign-up Deadlines

For losses that occurred between October 1, 2011 through December 31, 2014, sign-up began on April 15, 2014 and will end on January 30, 2015.

For losses incurred in 2015 and subsequent years, to be eligible, the notice of loss must be submitted within 30 days after the death is apparent and the application for payment must be submitted by January 30th of each year.

Livestock Forage Disaster Program (LFP)

The Livestock Forage Disaster Program provides compensation to eligible livestock producers that have suffered grazing losses for covered livestock on land that is native or improved pasture land with permanent vegetative range land firecover or is planted specifically for grazing.  The grazing losses must be due to a quality drought condition during the normal grazing period for the county.  It also provides compensation for producers that have suffered grazing losses on  range land managed by a federal agency if the producer is prohibited by the federal agency from grazing the normal permitted livestock on the managed range land due to a qualifying fire.

Program Requirements

  • Losses must have occurred on or after October 1, 2011
  • Must own or lease grazing land or pasture land that is physically located in a county rated D2 – D4 by the US drought monitor
  • Eligible Livestock includes:  Beef cattle, alpacas, buffalo, beefalo, dairy cattle, deer, elk, emus, equine, goats, llamas, poultry, reindeer, sheep or swine that have been, or would have been grazing the eligible land
  • Must have been owned, purchased, or entered into a contract to purchase during the 60 days prior to the beginning date of a qualifying drought or fire condition
  • Have been held by a contract grower or sold, or otherwise disposed of due to a qualifying  drought condition during the current production year, or up to two years preceding current production year
  • Have been maintained for commercial use
  • Livestock not on feedlot on the beginning date of a qualifying drought
  • Own, cash or share lease, or be a contract grower of eligible livestock during the 60 calendar days before a qualifying drought or fire
  • Provide pasture land or grazing land for covered livestock affected by drought or prohibited use of range land managed by federal agency because of a qualifying fire
  • Certification of suffering of grazing loss
  • Timely file an acreage report for all grazing land for which a loss of grazing is being claimed

Payments and Limitations

  • FSA will calculate LFP payments for an eligible livestock producer for grazing losses equal to 1, 3, 4, or 5 times the LFP monthly payment rate
  • LFP monthly payment rate for drought is equal to 60% of the lesser of the monthly feed cost;
  • LFP payments to an eligible livestock producer in a calendar year for grazing losses will not exceed 5 monthly payments for the same livestock
  • In the case of fire on federally managed range land, the payment begins on the first day the livestock are prohibited from grazing the eligible range land and ending on the earlier of the last day of the federal lease or the day that would make the period a 180 calendar day period.  The payment rate is 50% of the monthly feed cost
  • For 2012 and subsequent years, no person or legal entity, excluding a joint venture or general partnership, may receive directly or indirectly more than $125,000 total in payments under LFP, ELAP and LIP combined

Sign-up Deadlines

For grazing losses that occurred between October 1, 2011 through December 31, 2014, sign-up began on April 15, 2014 and will end on January 30, 2015.  For subsequent years, producers must provide a completed application for payment and required supporting documentation within 30 days after the end of the calendar year in which the grazing loss occurred.

Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program (ELAP)

This program provides payments to eligible producers of livestock, honeybees, and farm-raised fish to help to compensate for losses due to disease, adverse weather, or other conditions such as blizzards and wild fires.  This program provides assistance for losses not covered by LFP and LIP.  Enrollment began on April 15, 2014 at all local Farm Service Agencies.

 How to Apply for Relief

To seek relief assistance, contact your local Farm Service Agency Office, or visit FSA online at www.fsa.usda.gov.

 

Source:  USDA Farm Service Agency