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Help for Flooded Farmers: USDA Programs, Online Resources, and More

The recent catastrophic floods laid waste to much of Midwest farm country. Nebraska and Iowa are hardest hit, but damage dollars are piling up in Missouri, South Dakota, Illinois, and Wisconsin, with floodwaters still heading south and more to come from melting snow in the north and a rainy spring weather forecast.

Flood damage across the Midwest is expected to top $3 billion. Yet, much is still unknown, like livestock losses. In Nebraska, cattle are washing up on riverbanks, and in Iowa, flooded hog barns are still inaccessible.

In Iowa, more than 100,000 acres of cropland are under water, and grain bins, filled with last year’s crop waiting for commodity prices to improve, are now filled with unusable contaminated grain. State officials already estimate at least $150 million in ag building and machinery losses.

The devastation comes at a bad time for farmers already struggling financially from years of low commodity prices and the fallout from the trade war. The American Farm Bureau estimates Midwestern farm bankruptcies were up 19% in 2018 from 2017, the highest level in 10 years. Those farm debt figures have some conjuring up bad memories of the 1980s farm crisis.

Along with the loss of physical assets, farmers are facing a skeptical spring planting season. Some won’t even get a 2019 crop in the ground.

In Iowa, around 90% of tillable acres are covered by producer-purchased Federal Crop Insurance. A typical policy will pay 55% to 60% of covered revenue when planting is prevented. Prevented-planting provisions in crop insurance policies can provide coverage with specific planting dates that vary by crop and area, with coverage determined on a case-by-case basis according to each farmer’s specific policy. Crop insurance does not cover loss of already harvested grain stored in now-flooded bins.

There are two types of insurance: crop hail and multi-peril Crop Insurance (MPCI). Crop hail does not cover flood. MPCI must be purchased each growing season, and in tough economic times, many Nebraska farmers had opted out of the program.

USDA programs

For losses not covered by crop insurance, USDA-FSA offers a Noninsured Crop Disaster Assistance Program (NAP) for eligible producers, defined as a “landowner, tenant, or sharecropper who shares in the risk of producing an eligible crop and is entitled to an ownership share of that crop.” Adjusted gross income for any entity or individual is capped at $900,000. The program applies to low yields, loss of inventory or prevented planting due to natural disaster, and covers commodity crops for which the catastrophic risk protection level of crop insurance is not available, as well as livestock feed and forage, fiber crops, and some specialty crops.

For farmers to qualify, the area must be part of a declared major disaster declaration, or in a contiguous county to the disaster area. In Nebraska, 65 counties are under emergency declaration, and 56 counties in Iowa.

Farmers in the declared areas may qualify for emergency loans through FSA. The maximum loan amount is $500,000 with interest rates revised monthly. Application requires significant paperwork and stipulations that the farmer intends to continue farming and a promise to purchase crop insurance the following year. Emergency loans for annual operating expenses must be repaid within 12 months.

Loan funds can be used to repair or replace damaged property as well as provide working capital, pay essential family living expenses, reorganize the farming operation, or refinance certain debts.

The FSA also offers a disaster set-aside program, which authorizes the agency to set aside one payment on any FSA debt. Borrowers have eight months from the date of disaster designation to apply by providing a written request signed by all parties liable for the debt; actual production, income, and expense records for the production and marketing period in which the disaster occurred; and the ability to develop a positive cash-flow projection for the coming year. The producer must be current or not more than 90 days past due on any FSA loan or in nonmonetary default.

Conservation restoration

The USDA Emergency Conservation Program (EPC) offers emergency funding on a cost-share basis and technical assistance to rehabilitate damaged farmland. EPC can help with debris removal, grading or leveling, and restoring conservation structures such as waterways, terraces, ditching systems, buried irrigation mainlines, and certain types of fencing.

County FSA offices determine eligibility based on on-site inspections, and conservation issues that existed prior to the disaster are ineligible. Both farm and pasturelands are part of the program.

FSA also has a related program for emergency forest restoration.

If your farmland was designated as a wetland prior to the flooding, you will need to contact your Natural Resources Conservation Service (NRCS) office prior to moving sand in that field. Specific regulations may apply.

Recouping livestock losses

The Livestock Indemnity Program offers help for livestock losses. The USDA offers seven pages of details on the program that cover eligible owners and types of livestock, eligible loss conditions, and payment schedules including income limitations.

Livestock has to be on the farm for commercial use, and with the exception of swine and poultry on the farm on a contract grower basis, must be owned by the owner applying for the loss. Application must be made in the county where the physical loss occurred. Injured livestock sold at a reduced price may also be covered if the owner can prove the injury is a direct result of the disaster. Of course, all losses must be verified by ample documentation.

To add further assistance, the USDA has allowed grazing on Conservation Reserve Program (CRP) acres in Nebraska. At this point, the window for haying and grazing runs until April 30, and producers need to contact their local FSA office before moving cattle onto CRP ground.

Housing

FEMA Individual Disaster Assistance may be of use if you have lost your home. FEMA housing assistance cannot duplicate any private insurance coverage and will only cover the loss of the primary residence. It may help with other disaster-related expenses like moving, storage, childcare, or funeral expense.

FEMA claims it will set up an appointment for a visit from a FEMA inspector within 10 days of application, but depending on the volume of need, the agency makes no time-related promises as to when that inspection might occur. Documentation of your insurance settlement or denial must be submitted before a FEMA inspection can occur.

Small business losses are the domain of the Small Business Administration, which offers low-interest loans to help cover losses and comes with its own bureaucratic stipulations.

Online resources

There are numerous online resources available to help navigate assistance for flood victims.

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