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New disaster program may help flooded Midwest farms

Agriculture.com Staff 06/18/2008 @ 6:30am

Iowa's U.S. Senators, Republican Chuck Grassley and Democrat Tom Harkin, said Tuesday that when crop losses become known to the USDA, the state's farmers could be among the first in the nation to benefit from a new permanent disaster program that will cover part of the losses that aren't protected by crop insurance.

Both have been in contact with USDA about the so-called Supplemental Revenue (SURE) Assistance Payments that potentially can apply to 2008 crops.

"The Department has assured me that 2008 losses will be eligible," Grassley said Tuesday. "It's just a matter of getting the program up and running."

The amount of income guaranteed under the SURE program depends on the level of crop insurance coverage a farmer has. But SURE will guarantee up to 90% of a farm's income, then pay on 60% of the loss below that guarantee.

Farmers who've purchased crop insurance are automatically in the program, and Grassley said that all but 8% of Iowa's farmers have some level of insurance. Those who don't will have to sign up for the program when USDA has issues regulations. And unless a farm has more than a 50% loss, it has to be in a county declared a disaster by the Secretary of Agriculture.

Grassley said the best thing to do now is to have crop insurance adjusters assess the damage.

The exact payment will be based on a farm's yields and national average prices for the crop.

"You can qualify right away but you aren't going to know how much you're going to get until 2009," Grassley said.

Harkin's staff said Tuesday that "For corn and soybeans, that price will be available five months into the marketing year, which for crops planted this spring would be in February or March 2009," according to an e-mail message from his press aide, Kate Cyrul.

"The major source of help for Iowa farmers is going to be the existing crop insurance and non-insured assistance programs. The new disaster program will likely add something to the payout under present programs," Cyrul said.

Here's an example from Harkin's staff of how SURE would work:

  • Assume a 500-acre Iowa farm with 55% corn and 45% soybeans. Both crops have a 75% of yield and 100% of price revenue crop insurance coverage.
  • The farm, with 50% loss in both crops, would receive $98, 442 in crop insurance indemnity and $21,373 in supplemental disaster relief indemnity under new program in 2008 farm bill.
  • The farm, with total loss in both crops, would receive $246,732 in crop insurance indemnity, $21,373 in supplemental disaster relief indemnity under new program in 2008 farm bill.

Iowa's U.S. Senators, Republican Chuck Grassley and Democrat Tom Harkin, said Tuesday that when crop losses become known to the USDA, the state's farmers could be among the first in the nation to benefit from a new permanent disaster program that will cover part of the losses that aren't protected by crop insurance.

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