The U.S. Department of Agriculture (USDA) offers several programs to help farmers recover financially from natural disasters, including drought and floods. All the programs have permanent authorization, and only one requires a federal disaster designation (the emergency loan program). Most programs receive mandatory funding amounts that are “such sums as necessary” and are not subject to annual discretionary appropriations.
The federal crop insurance program offers subsidized policies designed to protect crop producers from unavoidable risks associated with adverse weather and weather-related plant diseases and insect infestations. Policies must be purchased prior to the planting season. Eligible commodities include most major crops and many specialty crops (including fruit, tree nut, vegetable, and nursery crops), as well as forage and pastureland for livestock producers. The Agricultural Act of 2014 (2014 farm bill; P.L. 113-79) enhances the crop insurance program by expanding its scope, covering a greater share of farm losses, and making other modifications that broaden policy coverage. Producers who grow a crop that is currently ineligible for crop insurance may apply for the Noninsured Crop Disaster Assistance Program (NAP).
The 2014 farm bill also permanently reauthorizes three disaster programs for livestock and one for fruit trees, making nearly all parts of the U.S. farm sector covered by a standing disaster program. Producers do not pay a fee to participate. The programs are:
- the Livestock Indemnity Program (LIP), which provides payments to eligible livestock owners and contract growers at a rate of 75% of market value for livestock deaths in excess of normal mortality caused by adverse weather;
- the Livestock Forage Disaster Program (LFP), which makes payments to eligible livestock producers who have suffered grazing losses on drought-affected pasture or grazing land or on rangeland managed by a federal agency due to a qualifying fire;
- the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP), which provides payments (capped at $20 million per year) to producers of livestock, honey bees, and farm-raised fish as compensation for losses due to disease, adverse weather, and feed or water shortages; and
- the Tree Assistance Program (TAP), which makes payments to orchardists/nursery tree growers for losses in excess of 15% to replant trees, bushes, and vines damaged by natural disasters.
Separately, for all types of farms and ranches, when a county has been declared a disaster area by either the President or the Secretary of Agriculture, producers in that county may become eligible for low-interest emergency disaster loans.
USDA has several permanent disaster assistance programs that help producers repair damaged land following natural disasters. It also has authority (though prohibited in FY2016) to issue disaster payments to farmers with funds from “Section 32” or the Commodity Credit Corporation (CCC). Finally, USDA can use a variety of existing programs to address disaster issues as they arise, such as allowing emergency grazing on land enrolled in the Conservation Reserve Program.