The Louisiana Department of Agriculture and Forestry (LDAF) recently announced the availability of the 2016 Louisiana Farm Recovery Grant Program. This program is designed to provide financial assistance to agricultural producers that suffered economic losses associated with the two flooding events in the state in 2016 (March 2016 and August 2016).
This program will be very similar to the program LDAF administered in response to Hurricanes Gustav and Ike with the exception that it will be a 100% grant program rather than a loan program. The following provides a brief summary of some of the more important components of the program:
Damages associated with the following commodities are eligible: Cattle, Corn, Cotton, Crawfish, Grain Sorghum, Hay, Rice, Soybeans, Strawberries, Sugarcane, Sweet Potatoes, and Wheat.
Fifty-one (51) parishes in Louisiana are eligible. Those parishes NOT eligible include: Assumption, Cameron, Concordia, Jefferson, Lafourche, Orleans, Plaquemines, St. Bernard, St. Charles, St. John, St. Mary, Tensas, and Terrebonne.
Since funds for this program come from the US Department of Housing and Urban Development (HUD) and not from USDA, eligibility is set by HUD which requires the parish to have been declared a disaster area by FEMA to be eligible. Being declared a disaster area by the Secretary of Agriculture DOES NOT qualify the parish.
The location requirement refers to the farming operation and not where the producer lives. As such, producers who live in an ineligible parish but who have a portion of their farming operation located in an eligible parish would be able to claim losses associated with just that portion of the operation located in the eligible parish.
For example, a producer who lives in Cameron parish (an ineligible parish) but has 400 acres of his 1,000 acre rice operation located in Calcasieu parish (an eligible parish) would be able to claim losses on those 400 acres under this program.
Producer Eligibility Requirements
- Producer must have been farming prior to March 1, 2016 and must be in business and farming in 2017
- Producer must have had gross farm revenue of at least $25,000 in at least one of the three preceding years (2014, 2015, or 2016)
- Producer must show economic losses of at least $10,000
- Producer must not currently be in bankruptcy
How are losses estimated?
Producers must use a crop loss calculator developed by LDAF in determining the estimated losses suffered on their farming operation. Only losses determined by the calculator are eligible.
What losses are eligible?
Losses calculated by the crop loss calculator include:
- Revenue Losses – the calculator estimates revenues losses as the difference between “Expected Revenue” and “Actual Revenue”. “Expected Revenue” is calculated by using the producer’s acreage, 5 year average parish yield, and the estimated 2016 commodity price. “Actual Revenue” is provided by the producer. Since the calculator estimates revenue losses, it accounts for both yield losses and quality losses (i.e. discounted crop prices received because of quality damage).
- Increased Planting Costs – The calculator estimates increased production costs associated with having to replant due to flooding. The producer certifies the number of acres of the commodity that had to be replanted and the calculator applies a cost per acre value to estimate total increased planting costs.
- Increased Harvest Costs – The calculator estimates increased harvest costs associated with those crop acres harvested under extremely wet conditions or with severely lodged crops. The producer certifies the number of acres with adverse harvest conditions and the calculator applies a cost per acre value to estimate total increased harvest costs.
- Increased Tillage and Land Preparation Costs – The calculator estimates increased costs associated with those crop acres that experienced abnormally high land preparation costs due to excessive land disruption caused by harvesting under excessively wet field conditions or to impacts from flooding. The producer certifies the number of acres with increased tillage costs and the calculator applies a cost per acre value to estimate total increased tillage and land preparation costs.
- Animal Deaths – The calculator estimates the market value of calves and breeding animals that died due to the floods. The producer certifies the number of cattle loss and the calculator applies a value per head to estimate the total estimated losses.
- Stored Hay Losses – The calculator estimates the market value of stored hay that was loss due to the floods. The producer certifies the number of bales that were loss and the calculator applies a value per bale to estimate the total estimated losses.
- Loss Grazing Days – The calculator estimates the value of forage made unavailable due to flooded pastures. The producer certifies the number of acres of pastures impacted, the number of days impacted, and the number of animals normally grazed on the acreage. The calculator then determines the total estimated losses as the market value of the estimated amount of hay that would be needed to replace the forage lost from the flooded pastures.
Total Estimated Losses
The calculator sums the estimated loss from each eligible commodity to determine the total estimated loss for the farm. If an eligible commodity had actual revenues that were higher than expected revenues, the calculator sets revenue losses to zero. As such, estimated losses for one commodity are not reduced by another commodity that had positive revenues (i.e. actual revenue was higher than expected revenue).
Net Estimated Losses
Producers receiving assistance under the 2016 Farm Recovery Grant Program cannot receive assistance from other sources or agencies for the same purpose. As such, the producer must certify any other financial assistance received from other agencies like FSA, NRCS, or Crop Insurance.
The calculator subtracts the assistance received from other sources or agencies from the total estimated losses to determine the net estimated losses. The estimate of net estimated losses is the maximum level of assistance available to the producer under the program.
Maximum Assistance Available
The maximum assistance available to a producer is the lower of the Net Estimated Losses determined by the crop loss calculator or $100,000. The total amount of funds available for the program is $9.5 million. If the total amount of eligible requests exceeds $9.5 million, awards will be made on a pro rata share basis.
Use of Funds
Grant proceeds may only be used for working capital expenses used to pay 2017 planting year expenses that are related to preparation, planting, management, and harvesting the 2017 crop.
- Complete Federal Tax Returns, including all schedules for 2014, 2015, and 2016 for the producer business and/or the owners, depending on how the owner files.
- Completed Application, including all attached forms
- Completed Crop Loss Calculator
- Completed FSA Verification Authorization Form
- Completed RMA Verification Authorization Form
- Copy of Government Issued ID
- Proof of Use of Funds (2017 receipts and invoices) for eligible expenses for the total grant amount
- Copies of current payroll registers, payroll forms, or federal form 941
- Completed LMI form
Applications will be accepted starting on July 26, 2017. The application period will remain open from approximately 36 days with a closing date around August 31, 2017. More information as well as the application packets can be found here.