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Nov. 6, 2023 Source: National Sorghum Producers (NSP) USDA this week announced the Emergency Relief Program (ERP) for 2022 - 10 months after funding was initially signed into law in the 2022 Consolidated Appropriations Act. Congress provided roughly $3.23 billion to address natural disasters that occurred during the 2022 calendar year for crop losses and an additional $470 million for livestock losses, which has already been programmed. However, there are two major flaws in the program that make it a disaster in and of itself. First, USDA has established a "progressive" payment factor - or backdoor payment limitation - to fit total payments within budget that will severely harm full time farm families. Ironically, this "progressive" factor cuts deepest those who faced the largest losses. Customarily, when a factor is required to fit payments within budget, one uniform factor is applied. But, in this case, there are six separate factors, based on the amount of losses, which look a lot more like payment limitations rewarding smaller losses (and impliedly smaller producers) and punishing larger losses (and full-time farmers). Second, although the law requires producer paid premiums to be netted out for all producers, USDA's new ERP only nets out such premiums for "underserved" farmers. The results are stark. For example, a farmer with a calculated loss of $100,000 in 2020 would have received $75,000, plus a refund of some portion of the crop insurance premium paid for the farm so as not to punish producers for buying insurance. For 2022, the same farmer with a $100,000 calculated loss will receive $11,250 after applying the progressive factor and the limitations on premium refunds. On a $500,000 calculated loss, the ERP payment would be $41,250 - just 8% of the loss. Although called by another name, the backdoor pay limit violates both the intent of Congress and the plain letter of the law. The confinement of the netting out of crop insurance premiums to "underserved" farmers is a direct affront to the statute. A one-pager with all the details you may need can be Second, although the law requires producer paid premiums to be netted out for all producers, USDA's new ERP only nets out such premiums for "underserved" farmers. The results are stark. For example, a farmer with a calculated loss of $100,000 in 2020 would have received $75,000, plus a refund of some portion of the crop insurance premium paid for the farm so as not to punish producers for buying insurance. For 2022, the same farmer with a $100,000 calculated loss will receive $11,250 after applying the progressive factor and the limitations on premium refunds. On a $500,000 calculated loss, the ERP payment would be $41,250 - just 8% of the loss. Although called by another name, the backdoor pay limit violates both the intent of Congress and the plain letter of the law. The confinement of the netting out of crop insurance premiums to "underserved" farmers is a direct affront to the statute. A one-pager with all the details you may need can be accessed here, further showing the immense harm the program would do to full time farm families. Unless remedied, this change will not only harm producers suffering losses in 2022 but farmers under future programs if this becomes the precedent. NSP continues to work with those on Capitol Hill as we explore all potential avenues to ensure the nation's farm economy is prioritized, setting aside the political aspects that have influenced the development of farm programs, which is unprecedented and detrimental. ">accessed here, further showing the immense harm the program would do to full time farm families. Unless remedied, this change will not only harm producers suffering losses in 2022 but farmers under future programs if this becomes the precedent. NSP continues to work with those on Capitol Hill as we explore all potential avenues to ensure the nation's farm economy is prioritized, setting aside the political aspects that have influenced the development of farm programs, which is unprecedented and detrimental. Tweet |
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