USDA will buy $170 million worth of pork, lamb, chicken, and catfish for various federal food nutrition assistance programs, including food banks.
Hopefully by boosting their prices received, the purchases are intended to help relieve cost pressures in keeping livestock fed and watered during the drought, while also helping the poor handle the higher costs of these products, according to Agriculture Secretary Tom Vilsack in making the announcement.
The breakdown of purchases will be as follows:
- $100 million for pork purchases
- $50 million for chicken product purchases
- $10 million each for lamb and catfish products
How the products will be distributed: USDA's Agricultural Marketing Service (AMS) will distribute the purchases via the National School Lunch Program, the School Breakfast Program, the Summer Food Service Program, the Food Distribution Program on Indian Reservations, the Commodity Supplemental Food Program and the Emergency Food Assistance Program.
Government food experts work to ensure that all purchased food is healthful and nutritious. Food items are required to be low in fat, sugar and sodium.
The commodities must meet specified requirements and be certified to ensure quality. (And for those who may wonder, AMS purchases only products of 100% domestic origin.) Within the last month, USDA has opened the Conservation Reserve Program to emergency haying and grazing, has lowered the borrower interest rate for emergency loans, and has worked with crop insurance companies to provide more flexibility to farmers.
USDA has also announced the following: Authorized $16 million in existing funds from its Wildlife Habitat Incentive Program (WHIP) and Environmental Quality Incentives Program (EQIP) to target states experiencing exceptional and extreme drought.
- Authorized the transfer of $14 million in unobligated program funds into the Emergency Conservation Program (ECP) to help farmers and ranchers rehabilitate farmland damaged by natural disasters and for carrying out emergency water conservation measures in periods of severe drought.
- Authorized haying and grazing of Wetlands Reserve Program (WRP) easement areas in drought-affected areas where haying and grazing is consistent with conservation of wildlife habitat and wetlands.
- Lowered the reduction in the annual rental payment to producers on CRP acres used for emergency haying or grazing from 25 percent to 10 percent in 2012. Simplified the Secretarial disaster designation process and reduced the time it takes to designate counties affected by disasters by 40 percent.
Non-Ag Program drought-related measures in play: Last week President Obama convened his White House Rural Council to review progress on Executive Branch response actions just listed and to develop additional policy initiatives to assist any Americans hurt by drought; not just farmers.
Among such measures:
- Increasing capacity for the National Credit Union Administration's capacity for lending to farmers as well as non-farmers.
- U.S. Department of Transportation emergency waivers for federal truck weight regulations and hours of service requirements to drought-stricken communities. Visit www.usda.gov/drought for the latest information regarding USDA's drought response and assistance.
Crop insurance payments may be late, but will be there. In seminars this week we picked up an undercurrent of worry among farmers that U.S. budget constraints may short-change them on crop insurance indemnities.
USDA's crop insurance program currently insures 264 million acres, 1.14 million policies, and $110 billion worth of liability on about 500,000 farms. But USDA insists availability of funds is not an issue; only their ability to process claims and get funds out in a timely manner. Some claims may not get paid until first quarter, 2013.