Program supposed to help mitigate disaster is a disaster itself
A farmer from Ohio commented on a topic during a Signal to Noise podcast on Friday, Oct. 2 (link). He as well as other farmers mentioned they had already received their CFAP 2 payments, a development that speaks well of USDA and specifically the Farm Service Agency (FSA). But the Ohio farmer wrote the following regarding WHIP+:
“The WHIP+ payment that [USDA Secretary] Sonny Perdue said we could sign up for Sept. 11, 2019 covering our near 100% crop loss due to excessive rain has not been distributed. The local FSA office claims the rules continue to change. My Representative Bob Latta (R-Ohio) expressed frustration that the funding was not in our hands during the fall of 2019. The Fulton County, Ohio office did not accept applications until late March, 2020, three days after closing for Covid-19. The completed documents have been in staff hands for months. Some applications have been sent to the district for review. If the blogs can be believed, there is a huge difference in how this program is handled from state to state. Some claim all they did was sign a document and staff filled the forms in and distributed the funds. The list of requirements has changed locally from time to time. I have been asked for weather/rainfall reports for every field. Pictures... production records including every load for six years were provided. Aug. 12 they said there may be another signature required, but they didn’t know. Aug. 20 they felt the funds would hit my account in a few weeks. It is now Oct. 3 more than one year past the original signup date for a program that was touted as an answer to cash flow needs related to a historical weather event. I don’t care for government programs any more than the next person, but if one qualifies, the funding should be distributed within a reasonable time frame. I do not know where the truth lies in regards to failure to distribute WHIP+ funding, but I do feel neglected.
“It would appear WHIP+ was put on the back burner again so a broader program of CFAP 2 could be distributed prior to the election. What do you feel Jim? Signal or Noise? Some claim the current administration did not fill key positions and the locals are left without leadership in multiple levels, County, State and Federal FSA offices.
“I do not believe the issue is in the local office. The staff seems to do what they can with the rules they are provided. Like all offices, the farmers seem to receive details on the programs long before the local staff has official notice.
“Any idea when I might see my WHIP+ funding? It certainly would have been nice to receive it in the year there was a near zero crop rather than a year of full production. In 2019 I was able to plant 58 acres of soybeans on my 886 acres. I never should have done that, but felt I needed to make an effort. I planted up to the edge of the water that evening before the rain started again. 2019 was a very unusual year. Crops planted the first few days of July made maturity and yielded well. The odds of this occurring are extremely rare.”
“On a state level, Ohio launched the H2Ohio program (link) with more effort than any program I have seen. Many of us accepted the contract which was promised to be a three-year program. We invested in equipment, software, soil testing and performed the required tasks only to have Ohio back out and refuse to pay. We have been forced to accept new contracts with the promise of payment for the 2021 season. It is anyone’s guess what will happen in 2022 or possibly 2023. Some invested six figure amounts to meet program requirements. I acknowledge Ohio is not the federal government. Ohio has no license to print money. They must balance a budget. What good is their word if they will not honor a contract?”
Comments: Well, the above email and others I have received on WHIP+ definitely mean there has been a lot of noise from USDA regarding this well-intentioned program. I have been checking with USDA on this some of my findings are detailed below and they provide a clear signal that something major is wrong with the execution of this program. Meanwhile, I participated during a virtual meeting last week in which one of the participants addressed WHIP+. The following are the general program points highlighted during a webinar by the Southwest Council of Agribusiness annual meeting by Dr. Bart L. Fischer, Research Assistant Professor, Co-Director of the AFPC (Agricultural and Food Policy Center):
• FY 2020 appropriations added “quality losses of crops, drought, and excessive moisture” to WHIP+.
• Drought losses only qualify in counties with D3 or higher for the 2018 and/or 2019 crop years.
• Payment limit is $125,000 for 2018, 2019, and 2020 (combined). If >75% of income is from farming/ranching/forestry, $250,000 limit for each crop year with overall limit of $500,000 per person or legal entity.
• Signup began on March 23, 2020, but has been incredibly slow.
• Extraordinarily complicated application: FSA workload in responding to Covid-19 has further complicated matters.
• Stacked Income Protection Plan (STAX): While STAX raises the WHIP+ factor up to 95%, indemnities also count against the WHIP+ Payment. In counties with large STAX payments, WHIP+ Payments are smaller.
• Payment factor: Unharvested (UH) payment factor significantly reduces WHIP+ Payments.
• Irrigation: Excess heat and hot/dry wind (in lieu of drought) are typical causes of loss on irrigated crops in some states. USDA now considers those causes of loss to be drought-related, which makes losses on irrigated land eligible for WHIP+.
• Insurable cotton following wheat: Insurable cotton following wheat (non-insured or short-rated) is a standard practice, but USDA continues to deny eligibility for WHIP+ (apart from approved double-cropping).
• 2020 losses: Will WHIP+ be extended to cover 2020 losses (e.g. ongoing drought, August Midwest Derecho, etc)?
• Improvements: If Congress chooses to extend WHIP+, will they make additional improvements? Will they address any of the previously mentioned concerns?
Now what? This topic is searching for a bottom line and not a bottomless list of excuses. USDA needs to officially update on this topic. As for the H2Ohio program, if a contract was signed, the state should deliver... period. If that is not the signal, I hope impacted Ohio farmers keep making noise about it.
Here is what I found out regarding the WHIP+ snags: If a farmer is qualifying on a cause of loss that had been covered under the June 2019 supplemental from Congress, then it certainly shouldn’t have taken this long, although 2019 losses have taken a back seat at USDA as detailed below.
But if a farmer qualifies under the December 2019 omnibus, that could help explain the lengthy delay. Why? The omnibus added “quality losses of crops, drought, and excessive soil moisture” to WHIP+. USDA finally rolled out the signup for drought and excessive moisture (but not quality loss) on March 23, 2020. Covid-19 hit and USDA largely shut down. Then, USDA started taking CFAP 1 applications. And, throughout, they were trying to take ARC/PLC enrollment and PLC yield updates remotely. In the interim, USDA started taking WHIP+ applications. They have been making a big push to catch up.
In most cases, from what I can gather from sources, USDA is still taking applications for 2018 losses due to drought and excess moisture and haven’t even started on 2019. Again, USDA in large part is working on this stuff from home.
USDA to my knowledge still hasn’t released any details on covering quality losses from 2018 or 2019. They haven’t taken any applications on quality losses, at least according to contacts. I will be checking with Sen. John Hoeven’s (R-N.D.) office on this as he was a big supporter of WHIP+.
Response from Senator Hoeven: “As chair of the Agriculture Appropriations Committee, I worked to secure additional funding for WHIP+, along with expanded eligibility to cover more producers, given the challenges North Dakota producers faced from excess moisture, early season snowfall and other natural disasters last year. I have voiced my concerns to USDA about the slow signup and delay in dispersing funds, and they have assured me that the program remains a priority. In fact, FSA Administrator Richard Fordyce joined a virtual roundtable I conducted with commodity groups on Friday and told us he felt USDA was close to providing funding on the quality loss program. COVID-19 has placed tremendous demands on the department and we appreciate their work to support farmers and ranchers during these difficult times. We continue working to get USDA to distribute these much-needed disaster relief funds as soon as possible.”
Once USDA takes applications, it has been extraordinarily frustrating: The application itself is crazy. While FSA downloads the data from RMA in what is called a WHIPPIR report, FSA staff pretty much goes through everything by hand to actually put it in the application. It is fraught with opportunity for error (matching up farm serial numbers, farm units, using codes, etc). From chats with FSA staff on the ground, it takes 5-6 hours to fill out the application for a single producer (longer for more complicated ones). Other farmers have indicated examples how complicated FSA made the whole thing. Again, the FSA employees are/were all working from home and in many cases the offices are way understaffed.
If a farmer lost a crop, FSA applies these “payment factors” which account for the fact that if the producer didn’t incur harvest expense (i.e. didn’t have to pay to harvest so USDA is not going to pay as much). But in many cases, those factors are outdated. And, USDA applies it to the WHIP guarantee rather than the payment. So, for the producer that lost everything, in many cases these “payment factors” end up meaning that the producer gets no payment at all.
Conclusions: This program is designed to help people who lost their crop… and USDA as made the program useless for the people that actually lost their crop. One can suspect this is why the program never spends anything. It is constantly under budget.
The WHIP+ program has been an unmitigated disaster — ironic considering it’s supposed to help mitigate disaster.
When Congress extends WHIP+ it to cover the Midwest derecho (and there are high odds that will occur), they really need to (1) demand that USDA simplify the program and (2) demand that USDA stop punishing those who lost their crop.
Bottom line: Congress needs to hit the reset button on WHIP+ when they extend it during the lame-duck session to cover the derecho.
