BATON ROUGE, La. — The recent $3.1 billion farm aid package will provide some assistance for some Louisiana farmers, but others will probably be left out, according to experts at the LSU AgCenter.
The aid package in the 2003 omnibus appropriations passed by Congress and signed into law by President Bush provides for crop disaster assistance for losses greater than 35 percent of the normal yield, said Kurt Guidry, an economist with the LSU AgCenter's Department of Agricultural Economics and Agribusiness.
Even with the federal aid, Louisiana rice farmers probably won't be eligible for the program because their yields, even considering Tropical Storm Isidore and Hurricane Lili, won't fall below the limit, Guidry said.
"For other commodities, most producers who had damage probably have more than a 35 percent loss," Guidry said, adding that the law gives producers the option of applying for assistance on either their 2001 or 2002 yield.
Sugarcane farmers are covered by a separate section of the bill, which provides an estimated $60 million for disaster assistance for losses resulting from hurricanes in 2002.
For rice farmers, who are facing poor prices, the disaster assistance won't help.
"The problem with rice is not a production problem. We had good yields," Guidry said. "The problem with rice is a marketing problem — a price problem. The disaster payments cover yield losses, not price losses."
Guidry said disaster payments for corn, grain sorghum, cotton and soybeans will be based on actual production history — or APH. Those are the yields producers report when they sign up for federal crop insurance, which also kicks in when losses reach 35 percent.
"The payment rate for producers depends on whether they have crop insurance," Guidry said. "For all of our major row crop commodities, there is insurance available, and part of the premiums for these insurance policies is subsidized by the government. If crop insurance was available but the producer choose not to purchase the insurance, then the amount of assistance is reduced."
Guidry said that provision is an incentive for producers to sign up for at least the minimum insurance. In any instance, the 35 percent-loss level acts sort of like an automobile insurance deductible — producers are only paid for losses above that amount.
"This program should help some Louisiana producers," Guidry said, pointing out that many of the state's cotton and soybean growers suffered both quantity and quality losses as a result of heavy, persistent rains during the harvest season.
The LSU AgCenter in late November 2002 estimated as much as 40 percent of the Louisiana soybean crop was still in the fields. While some of that remaining crop was harvested, poor yields and very low quality persuaded many producers to abandon their remaining crop.
"It was similar for cotton," Guidry said. "In some areas, as much as 50 percent of the crop was still in the fields in late November. While most of this was probably harvested, there was likely up to 10 percent was abandoned due to low yields and very poor quality."
Guidry pointed out that in addition to yield losses, both crops suffered significant quality losses — which are also covered by the bill.
"With the widespread damage caused by Tropical Storm Isidore, Hurricane Lili and the excessive rains in October, it is highly unlikely that very many cotton and soybean producers escaped without having yield or quality damage or both," Guidry said. "Therefore, most of the cotton and soybean producers would be expected to receive some level of assistance from this legislation."
Rick Bogren writes for the LSU AgCenter.