USDA announces drought assistance

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Agriculture Secretary Mike Johanns announced Tuesday $780 million in assistance to help farmers and ranchers manage drought and weather related production challenges. This funding includes a new $50 million program for livestock producers impacted by drought, focusing nearly $30 million in unused conservation funds on drought, and accelerating the delivery of an estimated $700 million in counter-cyclical payments.

"While some parts of the country are experiencing very good crop conditions, drought is taking a toll on farming and ranching operations in other areas of the United States this year," said Johanns. "Today's actions emphasize USDA's commitment to use every resource available to help farmers and ranchers who are impacted by drought."

Livestock Assistance. The Livestock Assistance Grant Program will provide $50 million in Section 32 to states in block grant form. States will distribute to livestock producers in counties that were designated as D3 or D4 on the Drought Monitor anytime between March 7 and August 31, 2006. The grants will help livestock producers restore their purchasing power. A list of eligibility criteria and eligible counties can be found at http://www.usda.gov by clicking on the drought spotlight.

Conservation Funds. The nearly $30 million in unused conservation funds includes almost $19 million in unused Emergency Conservation Program (ECP) funds and $11 million in unused Grassland Reserve Program (GRP). The ECP funds will go to 27 states. Information on eligibility and a list of the states and funding is also posted online. The GRP funds will help to protect drought-affected grazing lands. The funds will be distributed to 14 states. These funds will be focused on pending GRP applications for rental agreements in drought-affected areas.

Johanns also directed the Natural Resources Conservation Service (NRCS) state conservationists to work with their producers and state technical committees to focus remaining FY 2006 and a portion of FY 2007 conservation program funds on resource conservation practices related to drought response and mitigation. Programs such as the Environmental Quality Incentives Program (EQIP), the Wildlife Habitat Incentives Program (WHIP), the Agricultural Management Assistance (AMA) program, and GRP have built-in flexibility and local decision-making ability in order to encourage a focus on state-specific concerns, such as those related to drought.

Counter-Cyclical Payments. Johanns directed that 2005-crop year counter-cyclical payments be delivered as quickly as possible to expand the financial resources of farmers facing drought. An estimated $700 million in payments to upland cotton and grain sorghum producers will be made this week. This will constitute the earliest delivery of counter-cyclical payments on record. Payments to peanut producers will also be expedited, following the calculation of the final 2005 average price.

Existing USDA Disaster Assistance. Emergency loans are available to help producers in counties declared disaster areas. These low-interest loans are for producers who have suffered production or physical losses resulting from a natural disaster or quarantine in counties designated disaster areas by President Bush, or disaster or quarantine areas by Secretary Johanns.

Prior to this announcement, USDA has allocated over $30 million in emergency conservation program and emergency watershed protection program funds for 2006 disasters, including drought. The agency has released considerable Conservation Reserve Program (CRP) acreage to emergency haying and grazing and lowered the rental rate reduction to 10 percent from 25 percent.

Federal crop insurance and the Noninsured Crop Disaster Assistance Program (NAP) are also available to crop producers each year to help mitigate the risks associated with the adverse affects of heat and drought. Producers enrolled a record-high 246 million acres in crop insurance in 2005, with nearly 90 percent of acres insured at levels above the minimum catastrophic level of coverage. Similar enrollment levels are expected this year. In addition, NAP is available for producers who grow crops for which crop insurance is not available.

More information about today's drought assistance package and existing USDA disaster assistance is available at http://www.usda.gov

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