Disaster Assistance

Farmers do not have access to the same types of federal assistance as other businesses following a natural disaster.  Emergency loans are provided to help cover production and physical losses in counties declared as disaster areas by the President or the Secretary of Agriculture.  Unfortunately, the emergency loan program has not been an effective tool for most farmers.  Generally, in order to be eligible for an emergency loan, producers must have suffered a qualifying physical loss, or a production loss of at least 30 percent.  Producers are only eligible for an emergency loan if they cannot obtain commercial credit.  The loan limit is 80 percent of actual loss with a maximum loan amount of $500,000. 

NASDA urges a revised FSA emergency loan program, similar to assistance provided to small businesses, that provides measurable assistance to agricultural producers in disaster situations.  We recommend that appropriate loan amount caps be provided in the new program and that eligibility for the program be expanded to producers who may not currently be eligible for Farm Service Agency (FSA) emergency loans.  Further, NASDA recommends that the entire amount of actual loss demonstrated by the farmer be covered up to the limit of repayment capability, and that the program’s review process for both producer qualifications and agency screening/loan determinations be simplified.

When a federal natural disaster has been declared, we recommend that the Federal Emergency Management Agency (FEMA) be given the authority to make grants immediately available to agricultural producers in order for them to make emergency repairs.  In addition, farmers should be eligible for low interest loans from the Small Business Administration and other appropriate agencies for assistance following the disaster.

Disaster situations in agriculture are inevitable.  The challenge for lawmakers and the federal government is to develop a program or plan to lessen the impact of such disasters.  However, until crop insurance/risk management programs are established that are capable of totally replacing ad hoc disaster assistance, producers and the federal government should have a consistent way of coping with disasters through a permanent disaster assistance program.  Federal disaster assistance should not undermine the intent of crop insurance programs. 

Disaster assistance should be designed in a fashion that does not cause disincentives to purchase buy-up insurance coverage or NAP policies.  Limits should be established to prevent producers from receiving more in crop sales, insurance indemnities, and disaster assistance than would be expected in a normal production year.  However, producers must not be financially penalized for carrying higher insurance coverage.  Disaster assistance eligibility should be premised on carrying buy-up insurance if available, excluding participation in pilot insurance programs. 

NAP insurance coverage should be improved with buy-up coverage available for additional premiums.  The buy-up level for NAP should be capped at 65% of yield and 65% of price.  NAP coverage for grazing must be improved to be commensurate with similar coverage on annual planted crops.

Eligibility for disaster assistance should be triggered by evidence of producer loss based upon total farm revenue.  Disaster assistance should focus on the gap between expected farm revenue (including insurance indemnities) and the farm’s insurance guarantee. 

NASDA supports planning for emergencies involving states, together with any legislative changes.  In the event of a federally declared disaster under which the Robert T. Stafford Disaster Relief and Emergency Assistance Act is invoked, NASDA recommends that the USDA be required to deploy disaster liaisons to coordinate appropriate resources within USDA and with other agencies.  

NASDA urges the USDA to designate Section 32 funds for natural disasters that would be available for immediate dispersion. Agricultural producers need immediate response in the event of a natural disaster so that they can remain in business.  NASDA will support administrative changes that would provide agricultural producers, commercial fishermen, farm- and fishing-related businesses an opportunity to receive an immediate response to natural disasters in order to return to and continue providing food, fuel, and fiber for our people.

NASDA believes the USDA and the United States Congress should review the effectiveness of risk management tools and explore all options to provide farmers with improved risk management tools.


Staff Contact: Jennifer Yezak; (202)296-9680

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