Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Wednesday 12/23/09

USDA Disaster Rules Back From White House

Since I'm on vacation --- literally watching a Star Wars marathon with my son --- we're not going to share the following with my wife.

But I have BREAKING NEWS!!!

The White House Office of Management and Budget on Tuesday released the rules for the permanent disaster program, the Supplemental Revenue Assistance Payments program, or SURE, back to USDA. DTN/The Progressive Farmer received a copy of the final SURE rule that USDA is expected to post in the Federal Register on Monday.

Here are a few of the details from the expected Federal Register posting, and just a few details because the details are nearly 80 pages long.

First, to collect a SURE payment, farmers must have a qualifying loss, including at least a 10 percent lost of one crop of economic assistance due to disaster on either:

A farm in or contiguous to county declared a disaster by the secretary of agriculture,

Or a farm anywhere with a loss of at least 50 percent of normal production --- expected revenue for all crops on the farm, due to a disaster.

A crop of "economic significance is one with at least 5 percent of total expected revenue for all crops on the farm.

Farmers must also have purchased crop insurance for their economically significant crops. "Producers who do not purchase required crop coverage are not eligible for benefits unless an exception applies," the Federal Register notice states. There are exceptions for socially disadvantaged or beginning farmers. In 2008, USDA also allowed a buy-in fee to meet the insurance requirements.

Payments for SURE are capped at $100,000 and there will be rules regarding payment treatment for corporations.

Production losses are generally determined by calendar year of harvest, but the payment limitation is for a crop year.

Under new payment rules for crops in 2009-2011, a farmer would not be eligible to receive a SURE payment if their non-farming adjusted gross income exceeds $500,000 a year for "the three taxable years preceding the most immediate preceding complete taxable year."

The SURE payment is based on the sum of all revenues for the farm. The payment also limited to 90 percent of the sum of the expected crop revenue for each crop on the farm. Another key paragraph in the rules: "The SURE guarantee cannot exceed 90 percent of the total expected revenue for the crops on the farm. Depending on the level of insurance coverage the participant elects, the SURE guarantee for a specific participant may be less than 90 percent of the expected revenue. In general, the higher the level of insurance coverage purchased, the higher the SURE guarantee. A participant who purchases the minimum insurance required by this part and meets all other eligibility requirements will be eligible for SURE, but the SURE guarantee will reflect that minimal level of coverage."

USDA should have quick announcement in early January for signup to pay for 2008 disaster losses. Losses for the 2009 crop year likely will not lead to payments until early 2011.

I can be found on Twitter at chrisclaytonDTN.

Posted at 2:32PM CST 12/23/09 by Chris Clayton
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