Crop Damage from Fire, Flood, Drought in 2020 and 2021 Covered

Kansas farmers who sustained damage to commodity and specialty crops due to drought, wildfires and other natural disasters in 2020 and 2021 could qualify for  significant relief payments under a program announced last week by the USDA. The $6 billion crop relief program is part of the Extending Government Funding and Delivering Emergency Assistance Act signed by President Biden last fall. In total, it provides $10 billion in assistance to agricultural producers impacted by wildfires, droughts, hurricanes, winter storms and other eligible disasters.

The relief payments will be processed through the Farm Service Agency’s (FSA) new Emergency Relief Program (ERP).

Maximum $125,000 Payments

The program entitles eligible producers to receive up to $125,000 for loss of general commodity crops, or up to $125,000 for losses of specialty crops. Farmers who raise both types of crops may qualify for relief awards on both. Additionally, an extra 15% in relief funds can be tacked on if you are considered a beginning farmer, a socially disadvantaged producer or a military veteran. To claim a special status, applicants must obtain certification.

For impacted producers, initial payments will be calculated using existing data from the Federal Crop Insurance or Noninsured Crop Disaster Assistance Program (NAP). USDA estimates that phase one ERP benefits will reach more than 220,000 producers nationwide who received indemnities for losses covered by federal crop insurance and more than 4,000 producers who obtained NAP coverage for 2020 and 2021 crop losses.

To streamline delivery of phase one benefits, FSA will send pre-filled application forms to producers where crop insurance and NAP data are already on file. This form includes eligibility requirements, outlines the application process and provides ERP payment calculations. Producers will receive a separate application form for each program year in which an eligible loss occurred. Receipt of a pre-filled application is not confirmation that a producer is eligible to receive an ERP phase one payment.

Additional forms will be required within 60 days of the phase one deadline, as detailed in the USDA announcement.

If you do not receive a form or letter of initiation from the FSA and believe you qualify, contact your FSA office to inquire about eligibility.

Future Insurance Coverage Requirement

All producers who receive ERP phase one payments will be required to purchase crop insurance (or NAP coverage where crop insurance is not available) for the next two years. The coverage must be:

  • At a coverage level equal to or greater than 60% for insurable crops; or
  • At the catastrophic level or higher for NAP crops.

Qualifying natural disaster events include wildfires, hurricanes, floods, derechos, excessive heat, winter storms, freeze (including a polar vortex), smoke exposure, excessive moisture, qualifying drought and related conditions.

For drought, ERP assistance is available if any area within the county in which the loss occurred was rated by the U.S. Drought Monitor as having a:

  • D2 (severe drought) for eight consecutive weeks; or
  • D3 (extreme drought) or higher level of drought intensity.

Phase two ERP benefits will be extended to producers who did not participate in or receive payments through the existing programs that are being leveraged for phase one implementation.

We will keep you informed as more details about this new federal relief program become known. In the meantime, feel free to contact your Adams Brown advisor.