Federal Crop Insurance
Secretary Vilsack announced today that crop insurance companies have agreed to provide a short grace period for farmers on insurance premiums in 2012. To help producers who may have cash flow problems due to natural disasters, Secretary Vilsack sent a letter to crop insurance companies asking them to voluntarily defer the accrual of any interest on unpaid spring crop premiums by producers until November 1, 2012. In turn, to assist the crop insurance companies, USDA will not require crop insurance companies to pay uncollected producer premiums until one month later.
During the 2012 crop year, USDA has designated 1,584 unduplicated counties across 32 states as disaster areas—1,452 due to drought—making all qualified farm operators in the areas eligible for low-interest emergency loans. The U.S. Drought Monitor indicates that 66 percent of the nation's hay acreage is in an area experiencing drought, while approximately 73 percent of the nation's cattle acreage is in an area experiencing drought. During the week ending July 29, USDA's National Agricultural Statistics Service reported that U.S. soybeans rated 37 percent very poor to poor, matching the lowest conditions observed during the drought of 1988. NASS also reported that 48 percent of the U.S. corn crop was rated very poor to poor, while 57 percent of the nation's pastures and rangeland are rated very poor or poor condition.
Last week, President Obama met with Secretary Vilsack and members of his Cabinet to discuss additional steps the Administration could take to help farmers, ranchers and business owners manage and recover from the current drought. Later in the week, President Obama directed Secretary Vilsack to convene a meeting of the White House Rural Council to update members and stakeholders on the Administration response to the drought. Vilsack will update Rural Council members and stakeholders again next week on new steps taken by the Administration to combat the drought.
Under Secretary Vilsack's leadership, USDA has announced a variety of steps to get assistance to producers impacted by the worsening drought, including:
- Allowing additional acres under CRP to be used for emergency haying or grazing. The action allows lands that are not yet classified as "under severe drought" but that are "abnormally dry" to be used for haying and grazing.
- Allowing producers to modify current Environmental Quality Incentives Program (EQIP) contracts to allow for grazing, livestock watering, and other conservation activities to address drought conditions.
- Authorizing haying and grazing of Wetlands Reserve Program (WRP) easement areas in drought-affected areas where haying and grazing is consistent with conservation of wildlife habitat and wetlands. USDA has expedited its authorization process for this haying and grazing.
- Encouraging crop insurance companies to provide a short grace period for farmers on unpaid insurance premiums, as some farming families can be expected to struggle to make ends meet at the close of the crop year.
- Reducing the emergency loan interest rate from 3.75 percent to 2.25 percent.
- Lowering the reduction in the annual rental payment to producers on CRP acres used for emergency haying or grazing from 25 percent to 10 percent in 2012.
- Simplifying the Secretarial disaster designation process and reduced the time it takes to designate counties affected by disasters by 40 percent.