Transcript Drought Assistance - Oklahoma State University–Stillwater

Dr. Jody Campiche
Assistant Professor & Extension Economist
Agricultural Policy
Oklahoma State University
September 13, 2011
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CRP Emergency Haying/Grazing
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Disaster Programs
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Emergency Loans
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Crop Insurance
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Emergency grazing authorized in 32 OK counties
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Alfalfa, Beaver, Beckham, Blaine, Bryan, Caddo, Cimarron, Comanche, Cotton, Custer, Dewey,
Ellis, Grady, Grant, Greer, Harmon, Harper, Jackson, Jefferson, Kay, Kiowa, Logan, Major,
McCurtain, Osage, Roger Mills, Stephens, Texas, Tillman, Washita, Woods, and Woodward
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Emergency grazing allowed through October 31, 2011 without an additional
reduction in payment
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Producers receive a 25% reduction in annual rental payment on acres
hayed/grazed
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▪
Acres not eligible for managed grazing for 2 years
▪
Producers should file request with county FSA office prior to grazing CRP land
Option to use harvested hay from expiring CRP acres (when the acres are being
prepared for fall crops)
▪
▪
Livestock producers can use hay to feed their own livestock or can sell or donate the hay
If the haying option is utilized, producers will receive a 25% reduction in the CRP rental rate.
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Emergency Conservation Program (ECP)
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Emergency Loans
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LFP
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LIP
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SURE
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Assistance to producers to rehabilitate farmland
damaged by a natural disaster (tornado, wildfire,
flooding, drought, etc.)
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Assists producers with providing water for livestock
during drought
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Cost share program
 up to 75% of the cost to provide water to livestock during a
drought
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Producers should contact their local FSA office for
more information
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Emergency loan assistance to producers for production losses due
to drought, flooding, other natural disasters, or quarantine
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Restore/replace essential property
Pay production costs associated with the disaster year
Pay essential family living expenses
Reorganize the farming operation
Refinance certain debts
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Current interest rate - 3.75%
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Check eligibility requirements
 Complete application at local FSA office within 8 months of the
county’s disaster designation date
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Provides assistance to producers who suffered grazing
losses due to drought or fire occurring between Jan. 1,
2008 and Oct. 1, 2011
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Eligibility determined on a county basis by U.S. Drought
Monitor
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Grazing losses must be due to a qualifying drought
condition during the normal grazing period for the county
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As of August 25, 2011, almost all OK counties (excluding
Nowata, Craig, and Ottawa) are covered by a qualifying
drought condition for forage sorghum, improved pasture,
and native pasture
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Oklahoma producers have already received $35
million in payments from the LFP program in 2011
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Eligibility Requirements:
 Must have crop insurance policy or NAP policy on grazed
acres with a loss
 Only required to have insurance coverage on acres for
which benefits are requested
 Eligible farmers/ranchers who meet the definition of
“Socially Disadvantaged,” ,“Limited Resource," or
“Beginning Farmer or Rancher,” do not have to meet the
crop insurance requirement
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Provides assistance for losses due to livestock deaths in excess of normal
mortality as a result of adverse weather occurring between Jan 1, 2008
and Oct. 1, 2011
 Adverse weather events
▪ Tornados, hurricanes, floods, blizzards, disease, wildfire, extreme heat, and extreme cold
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Livestock do not have to be located in a county/contiguous county
designated as a natural disaster
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No risk management purchase requirement
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Producers receive 75% of the average fair market value for livestock
deaths in excess of normal mortality
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Losses must be reported within 30 days of the severe weather event
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As of August 23, 2011, Oklahoma producers have received $917,000 in
2011 payments from the LFP program
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Provides emergency relief to livestock producers due to blizzards,
flooding, and wildfires
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Benefits include
 pasture losses
 feed and forage losses produced on the farm or purchased prior to the
disaster event
 above normal purchase of feed and forage
 expenses to deliver feed to stranded livestock
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Producers must have a crop insurance policy or NAP coverage on
every farm and commodity (excluding grazed acres)
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Provides compensation for losses that are not covered through
other disaster programs
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Financial assistance for crop losses due to a natural disaster
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To receive SURE payments, an eligible producer must have a
qualifying loss
 qualifying loss - at least a 10% production loss affecting one crop of
economic significance due to a disaster on a farm in a disaster county
 Producers outside a declared disaster county, but with production
losses >= 50% of the normal production on the farm qualify
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Must have insurance to qualify for SURE
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Can’t apply for 2011 losses until end of 2011/12 marketing year (so
November 2012)
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Provides financial assistance for low yields, loss of
inventory or prevented planting occur due to natural
disasters, such as drought
 Noninsurable crops
▪ catastrophic risk protection crop insurance is not available
▪ crops planted and grown for livestock consumption, such as grain and
forage crops (including native forage)
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Natural disaster must occur before or during harvest and
must directly affect the eligible crop
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Producers must apply for coverage at their local FSA office
& notify FSA if crop was affected by drought or other
natural disasters and complete the Notice of Loss and
Application for Payment
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November 30, 2011 deadline
 NAP coverage for perennial crops, including
pecans or native/improved grasses intended for
hay
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August 31, 2011 deadline
 Alfalfa, all small grain grazing acreages, small
grain acreages that will be harvested as forage,
small grain inter-seeded in perennial grasses, cool
season perennial or mixed grasses intended for
grazing, and value loss crops such as nurseries
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Federally-subsidized insurance programs
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Administered by Risk Management Agency
(RMA) and sold through private crop
insurance agents
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Sales closing date: September 30, 2011
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Federally-subsidized insurance programs
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Producers sign up w/private crop insurance companies
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For the 2012 crop year, the sales closing date is September
30, 2011
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Allows forage/livestock producers to protect losses of
forage harvested for hay or produced for grazing due to
lack of rainfall
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All counties in OK eligible for the Rainfall Index PRF
 Last year, OK only had the vegetation index
 Rainfall index is much better for OK
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Rainfall Index
 National Oceanic and Atmospheric Administration Climate Prediction Center
(NOAA CPC) data used
▪ each grid is 12 by 12 miles
 Producers select at least two, 2-month time periods where rain is important
to the operation, called index intervals
 Insurance payments calculated using NOAA CPC data for the grid(s) and index
interval(s) chosen by the producer
 If the final grid index falls below the trigger, producers may receive a loss
payment
 Coverage based on the experience of the entire grid
▪ not based on individual farms/ranches or specific weather stations in the general area
 Not required to insure all acres
▪ Can insure acres that are important to the grazing program or hay operation
•Select at least two 2month time periods when
rain is important to your
operation. Index
Intervals
•Coverage Level
•Select a Protection
Factor between 60-150
percent of the County
Base Value.
Payments will be calculated
using NOAA CPC rainfall data
for the grid(s) and index
interval(s) you have chosen to
insure.
When the final grid index falls
below your “trigger grid
index”, there may be a loss.
Livestock Risk Protection
• Protects cattle producers against price declines
during an established insurance period
•Coverage prices and premiums change daily
•No other peril is covered
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Key benefits
 customizable contracts
 Do not have to prove loss to receive payments
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Producers pick the time period or periods they want
covered, temperature and/or precipitation levels and
the coverage
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Can choose which weather station they want to use to
record data
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Issues payment when weather conditions specified in
the policy occur
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Automatically sends payments and requires no
proof of loss
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Collects premiums, minus any payouts, in
November after harvest
unpredictable weather conditions
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Uses an algorithm to calculate risk and sell
insurance online against unpredictable weather
Jody Campiche
Assistant Professor & Extension Economist
Ag Policy
528 Ag Hall
Stillwater, OK
[email protected]
405-744-9811
Ag Policy Newsletters
http://www.agecon.okstate.edu/agpolicy/index.as
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