Disaster Situations

Disaster Situations — Farmers do not have access to the same types of federal assistance as other businesses following a natural disaster. Farm Service Agency 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. The emergency loan program should be revised as described under Policy Section 12.4.

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. NASDA urges the USDA to designate Section 32 funds for natural disasters that would be available for immediate dispersion. Agricultural producers need an immediate response to a natural disaster to remain in business.

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.

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 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. Better coordination between the USDA and other federal, state, and local agencies is needed in developing a more inter-related program of risk management and disaster assistance for U.S. producers to deal with localized disasters.