Reimbursement for Grain Lost in Flooding May be Question for Congress

The government has an indemnity program for livestock killed by storms and flood, but nothing to compensate growers for grain lost to flooding. The issue took center stage Monday at an agriculture roundtable confronting the blizzard and flooding losses in Nebraska, a leading corn, cattle, and soybean state. Governor Pete Ricketts opened the meeting on Monday by saying, "We've never seen a natural disaster of this scope."

President Trump issued disaster declarations covering most of Iowa and Nebraska last week because of widespread storms and flooding. Federal forecasters say there is potential for moderate or major flooding in 25 states with the Northern Plains and upper Mississippi River basin at greatest risk this spring. Ricketts said 15 bridges were destroyed by floods and more than 250 miles of roadway need repair in Nebraska. Losses were unofficially estimated at more than $1.3 billion, two thirds of it in agriculture.

"(For) privately stored grain, we don't have anything in place at USDA," said Agriculture Undersecretary Greg Ibach at the roundtable. "If Congress passes a disaster package, that may or may not be part of that." Due to a string of bumper crops and low commodity prices, billions of bushels of grain are stored in bins on farms and at commercial elevators and warehouses. Some of the stockpile was caught in flooding, but the amount was not immediately known.

The Senate was expected to vote on a $13.5 billion disaster bill this week that was drafted to address last year's wildfires in California and hurricanes in the South.

"We think…it's going to include authorization for whatever we might need," said Iowa Senator Charles Grassley when asked if aid for Iowa and Nebraska would be part of the bill. The final wording of the bill was under discussion on Monday. "We don't know if the money in the bill will be enough to cover; we don't know what we need yet." A supplemental appropriation could be sought if needs outrun the relief package, he said.

USDA's Livestock Indemnity Program aids producers with payments set at 75% of the average market value of commercial livestock, such as cattle, poultry, and swine. Pets, recreational animals, and show animals are not eligible for payments.

Crops contaminated by flooding cannot be sold for food because it is considered adulterated, says the FDA. Flood waters may contain sewage, pesticides, pathogens, and other toxic substances. Mold may appear. "Sometimes, crops that have been harvested and then subsequently deemed unsuitable for human use can be salvaged for animal food."

Ibach said USDA would allow farmers and ranchers to move livestock to graze on land enrolled in the long-term Conservation Reserve Program as a way to provide feed for the animals and to get them on dry land. Nearly 1.1 million acres of land in Nebraska are enrolled in the reserve, which holds 22.4 million acres nationwide. The reserve pays an annual rent to landowners who idle environmentally sensitive land for 10 years or longer.

The USDA fact sheet on the Livestock Indemnity Program is available here.

A list of USDA disaster relief programs is available here.