President Donald Trump on June 6 signed the $19 billion disaster aid bill, which includes about $3 billion to assist agricultural producers suffering from disasters that occurred in 2018 and 2019.
Under the bill, payments for crop insurance policies under the Federal Crop Insurance Act or the Noninsured Crop Disaster Assistance Program will cover up to 90 percent of the loss. Crops not covered under these programs can receive up to 70 percent of the loss.There is widespread confusion among growers as to how this provision may relate to crops prevented from being planted, noted the American Farm Bureau Federation.
Prevented-planting policies will be significant this year. As of June 2, USDA reported that only 67 percent of the corn was planted in the top 18 production states compared to the five-year average of 96 percent. Soybeans were 39 percent planted in the U.S. compared to the average of 79 percent.
Questions also remain about how the disaster aid provisions will intersect with the $16 billion trade-disruption assistance package the Trump administration announced on May 23, but which still is under interagency review at the White House Office of Management and Budget. The trade package includes direct payments to producers, commodity purchases and additional funds for market promotion activities. Under the program, direct payments intended to compensate producers for some economic losses sustained because of the trade disruption with China will total $14.5 billion and will be based upon 2019 reported plantings. Under the 2018 market facilitation program, payments were capped at $125,000 per operator and farmers with an adjusted gross income greater than $900,000 were not eligible for trade assistance.
However, the disaster relief bill waives the adjusted gross income eligibility requirement. But it currently is unknown if the trade-disruption assistance payments will remain capped at $125,000 per operator.
The NGFA is continuing to communicate with the USDA about how the trade-disruption and disaster relief programs may interact with planting and marketing decisions.