Disaster aid considered crucial as harvest disappoints
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Crops in areas of Montana have had much more rain this year than in the last few years, but that might not be enough to keep all farmers and ranchers in business.
After heavy rains and snow fell in early June, ag producers and experts in some parts of north-central Montana said yields of crops could be near normal. But two weeks of extreme heat and other factors have proven them wrong.
Peggy Stringer, state agriculture statistician, said the estimate of average yields in the state for winter wheat dropped three bushels an acre to 33 bushels and spring wheat dropped six bushels an acre to 22 bushels from July 1 to Aug. 1, primarily because of the heat and wind in mid-July.
"That's significant," she said.
The spring wheat estimate is one bushel an acre lower than last year's yield, which came at the end of three years of drought.
Representatives of government agencies and agricultural groups say it's crucial for Montana ag producers that ag disaster aid passes. Discusion about disaster aid programs will resume when Congress goes back into session Tuesday.
"In my mind, they're pretty essential for Montana producers to be healthy," said Randy Johnson, state executive director of the Farm Service Agency.
The farm bill passed last spring won't really help with the problems facing Montana, he said.
"You really need to grow a crop to take advantage of the new farm bill. If you have a crop, I think it does a pretty good job," Johnson said. "Because this bill doesn't have as much in the way of direct payments, there's less support there when you're faced with poor production."
One program in the farm bill, countercyclical payments to farmers when prices are below average, won't have much effect even for people with good crops, he said. Because of bad harvests across the country, grain prices are going up and the countercyclical payments won't be used in most cases.
Bill Keller, a vice president in the Independence Bank loan department, and loan officer Lance Johnson of Wells Fargo Bank, both in Havre, said the poor crops might be more than some producers can handle and keep their operations without disaster aid. Some farmers and ranchers won't be able to take out additional loans to keep their operations running, they say.
"There is a percentage of producers that over the last four and five years of drought have exhausted the equity of their operations," Keller said.
Chuck Wimmer, president of Stockman Bank, and Adrian Doucette, branch manager of Heritage Bank, both of Havre, said some kind of assistance is definitely needed.
"They could definitely use some extra help," Wimmer said.
Ranchers are being hit from two sides, Doucette said. Cattle prices have dropped this year, on top of the fact that many producers have already reduced or eliminated their herds.
Lori Cox, spokeswoman for the Montana Grain Growers Association, said some producers will go out of business without assistance. South-central Montana, in the region around Rapelje and Harlowton, is especially bad, she said.
"The south-central portion of Montana is so wicked it's just tragic. I don't know how else to describe it," she said.
Beth Emter, spokeswoman for the Montana Stockgrowers Association, said hay production is also down, especially in the area around Havre and to the west.
"We're definitely seeing it on the livestock side as well," she said.
A fourth year of having to buy hay could be too much for many ranchers, she said. The association has heard of many producers who have reduced or liquidated their herds already, and another year without hay may keep them from coming back.
"A lot of people have been hanging on, hoping they could make it another year, but it's just gone on too long," Emter said.
Montana's senators and congressman are continuing to push for disaster relief, as they have been for a year or more.
Democratic Sen. Max Baucus attached more than $2 billion in disaster relief to the Senate version of the farm bill last winter, after attempting to attach it to other bills. The Senate passed the bill with the aid attached, but the House stripped the relief out of the bill in committee.
Republican Denny Rehberg is one of 13 representatives co-sponsoring a bill introduced July 26 that would provide disaster relief for losses in 2001 and 2002.
A similar bill was introduced in the Senate on July 25 by Baucus and Montana Republican Conrad Burns, along with Senate Majority Leader Tom Daschle of South Dakota and U.S. Sen. Tim Johnson, D-S.D. It would also provide disaster relief for both years.
Emter and Cox said their organizations have been hearing that support is growing in Congress for the aid.
More than 20 national agricultural organizations have signed on to the bill sponsored by Baucus and Burns, Cox said. She added that Rehberg needs help from his constituents to build more support in the House.
It would be most helpful for people to e-mail or fax representatives from other states, to convince them the aid is needed, Cox said. Regular mail takes too long to be processed and decontaminated for anthrax to reach Congress in time, she said.
Emter said support is growing for aid because more and more of the country is entering drought.
But that also increases the number of people needing aid, Emter said. The amount, if any, approved for disaster relief will have to spread farther, she said.
The House took the disaster aid out of the farm bill because of its potential impact on the budget, said Erik Iverson, Rehberg's chief of staff. The bill Rehberg is sponsoring would divert unused money budgeted for the farm bill, such as for countercyclical payments, to use for disaster relief.
The estimates of the surplus run as high as $4 billion, Iverson said.
"It's a creative sort of solution, middle ground, if you will," he said.
President Bush, who said after the farm bill was passed that he didn't believe additional disaster aid was needed, hasn't committed to Rehberg's bill, Iverson said. The indications are that the White House would not object if the bill was budget neutral, he said.
Baucus spokesman Bill Lombardi said the senator has been talking to many farmers and ranchers while traveling in Montana this month. He said Baucus is hopeful that when senators and representatives return to Congress, they will have a better understanding of the severity of the problem.
"It's not just in Montana anymore. This has become a national issue," Lombardi said.
Baucus will continue to work with Burns and Rehberg to persuade Congress, and the president, that the aid is needed, Lombardi said.
Johnson said the FSA has four programs available for producers that have been used during the drought.
Emergency haying and grazing of Conservation Reserve Program land has been helpful to cattle producers, he said.
The FSA has a program to help provide supplemental insurance to producers with uninsured crops, and a conservation program to help producers provide emergency water to their livestock. Those programs have been heavily used in Montana, Johnson said.
Another program, a low-interest loan available to producers who suffer at least 30 percent loss of production, hasn't been used as much in the state, he said.
"The real program the producers are waiting for, looking for, is a crop disaster program," he said.