Mike Strain, Louisiana commissioner of agriculture, has been a busy man since hurricanes ruined much of his state’s crops and infrastructure. Between meetings, phone calls and traveling the state to assess damage and offer encouragement, Strain spoke with Delta Farm Press. Among his Oct. 4 comments:
What’s happened since your testimony before the Senate Agriculture Committee in late September (to read that testimony, visit http://deltafarmpress.com/hurricane/ike/hurricane-devastation-1003/)?
“In the last week, a number of authors signed onto (Louisiana) Sen. Mary Landrieu’s bill (to help with the agriculture disaster). However, Oklahoma Sen. Coburn blocked it. It was going to be passed by unanimous consent and then be sent to the House where (the Louisiana) delegation would carry it.
“But Coburn blocked it … and wouldn’t budge. That means it is dead for the current session. It’ll be put forward again in the lame-duck session, probably in November after the election.”
Please explain what the bill would do.
“The bill would place $1.12 billion into a fund. We’d basically waive the SURE provisions — the disaster relief provisions of the 2008 farm bill. Those haven’t been written and would take one to two years to take effect. Instead, we’d go back to the disaster provisions in the 2005 farm bill to get immediate relief to (the agriculture sector).
“If the bill isn’t passed, it could be one or two years before there’s any relief for agriculture. We need (funds) now!
“This is the largest agricultural disaster this state has ever faced. You could argue we’ve come through the perfect set of storms with Fay, Gustav and Ike right at harvest time. Maximum money had been spent (growing the crops), farmers are leveraged as far as they can be, they’d begun harvesting and the majority of their crops had been booked, the farm bill was signed late, many growers didn’t have insurance — or adequate insurance.
“All these factors taken together, along with the fact that elevators had sold grain downstream, means there’s a severe lack of capital in the system.
“We must bring that to bear. If not, our entire rural and agricultural economies will be severely impacted.”
On how the requested $1 billion would be divvied up…
“It would be for all states with disasters this year: Iowa, Texas, Arkansas, Louisiana, Georgia — even nine counties in Oklahoma, where Sen. Coburn is from.
“(Coburn) said he didn’t want farmers to be able to double-dip — take funds from this bill and also the SURE program. But if he’d read the bill, that’s clearly prohibited.
“He also doesn’t believe America should be spending money in this fashion.”
It would seem $1 billion is just a drop in the bucket of what’s needed.
“When you spend $700 billion to shore up a financial market, this bill is asking for less than two-tenths of one percent of that. One percent would be $7 billion. Less than two-tenths of one percent for the farmers, the backbone of this nation.
“We must make sure they’re able to plant next year. That’s the basis of our rural economy, right across the country.”
When considering the Wall Street bailout and reluctance to pass disaster assistance “farmers are upset and they should be. We’re asking for a hand up so we can get back to work, so the local banks can keep going, (along with) the grain elevators, the tractor dealerships, the farmers, the harvesters, everybody.
On crop insurance in Louisiana…
“Crop insurance for Louisiana farmers is three to four times higher than in other states, such as Iowa. For us, rates are higher and coverage is less.
“So when you look at strict economics, many farmers didn’t buy more coverage and bankers didn’t tell them to. For the amount of money spent, they get very little coverage.
“The second part of this is many smaller banks have 50 to 60 percent of their portfolios in agricultural loans. That money is largely tied up in grains, a third to a half of which has been lost.
“If something isn’t done, we’ll have an agriculture credit crisis on top of the crisis currently (on Wall Street). Money will be very tight and we must have the availability of credit.”
All agricultural sectors are “willing to sit down and try to come up with a reasonable solution. I was asked by a politician what our priorities should be. I replied ‘the ability for us, as a state, to back up the credit of the banks to keep farm credit available.’ So we may be discussing trying to use some internal banking mechanisms to be guarantors to the bank to help them finance next year’s crop.
“We cannot allow radical change and destruction of farm economy from this disaster. The Great Flood of 1927 changed Louisiana forever in many different ways — socially, economically, some good, some bad. The agricultural economy was devastated for many years. We won’t let that happen here.
“I’ve held 12 forums with farmers; have had meetings with bankers, with crop consultants. I met with every person in every office on Capitol Hill that would listen.
“The issues are common amongst farmers: high input costs, inadequate crop insurance, farm bill signed late, money owed by farmers to elevators for non-delivery of grain, increased damage to infrastructure, increased cost of harvest, undeliverability on contracts because of quality problems of the crop being harvested. Those, along with getting money to plant in 2009, are the big issues.
“One more: the SURE provisions in the permanent disaster portion of the new farm bill haven’t been written. And according to testimony, the rules aren’t imminent.”
“I’m very proud of our congressional delegation, of Gov. Bobby Jindal. Everyone is working very hard and we’ll continue to press the fight. We’ll be back in D.C. as soon as Congress is back in session. We won’t give up until we get some help for our farmers.
“We need to go to D.C. and explain the weaknesses in the (new) farm bill. The rest of the United States needs to know that this too can happen to you.
“Attention needs to be brought to (the bill’s coverage gaps and problems). I don’t think enough attention was being paid when it was written.”