Drought Aid To Come From Ag Funds

Congressional negotiators on Thursday finalized an agreement to include $3.1 billion in disaster aid for U.S. producers in the final federal budget bill for fiscal 2003, but conservation spending will suffer as a result.

Under the House-Senate compromise, disaster aid will be paid for with offsetting cuts in other agricultural spending, rather than across-the-board budget cuts as the Senate proposed in its budget bill.

Specifically, that will mean almost halving funding for the highly-publicized new Conservation Security Program created by the 2002 Farm Bill.

Needless to say, that upset supporters of the CSP program, especially Iowa Sen. Tom Harkin, the plan’s leading sponsor in Congress, who called the budget move an "anti-environmental assault."

The drought aid will also be targeted differently than in the package passed by the Senate last month. Crop producers will have to show a 35% crop loss to qualify for disaster relief.

Payment rates will also be higher for growers with crop insurance than those without, who would be required to buy crop insurance for the next two years to be eligible for aid. Also, producers and ranchers will be able to apply for aid to offset losses in 2001 or 2002, but not both years.

The final disaster aid package will include $2.115 billion for row-crop producers, $365 million in additional aid for livestock producers and $250 million for specialty crop producers, along with a number of smaller expenditures.

Editors note: Richard Brock, Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.