NCPA - National Center for Policy Analysis

Senate Formula Turns Farm "Disaster" Aid on its Head

January 31, 2003

Last week, the Senate approved a $3.1 billion disaster-assistance package for farmers. But under the terms of the bill, most of the funds would not flow to producers who suffered disaster losses; instead, it will be handed out on the basis of where farmers live. Critics call the plan "insane."

  • Under the Senate plan, producers who live in designated disaster counties would automatically receive an extra 42 percent of the income supplement they received last year -- whether they had losses or not.
  • In other words, a farmer who lost most of his corn crop to drought, but who doesn't live in one of the nearly 2,700 counties designated as disaster areas in the past two years, would get nothing.
  • But a farmer who lived in a neighboring county designated as a disaster area could collect from the program -- even if his crops were unscathed.
  • Large Arkansas and Mississippi rice growers with healthy crops stand to reap bonus payments of more than $50,000 simply because their farms are in designated disaster counties.

That leaves much less money for drought-stricken Midwest and Great Plains producers -- who are promised a fraction of what they would otherwise get under more-traditional disaster-aid formulas.

Critics point out that the package reflects the southern roots of the Senate's Republican leadership and new Agriculture Committee Chairman Thad Cochran of Mississippi -- who is a major force as well on the Senate Appropriations Committee.

Political observers say the switch can't be rationally defended and gives agriculture programs just one more black eye. "You just make the case for everyone who doesn't like the farm program," warns Rep. Sam Graves of Missouri.

Source: David Rogers, "Disaster-Aid Bill Favors Southern Farmers," Wall Street Journal, January 31, 2003.

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http://online.wsj.com/article/0,,SB1043976262715128664-search,00.html

 

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