Monday, November 01, 2010

Unfair Description of Lincoln's Disaster Program?

Via Farm Policy, Dan Morgan writes about the budget impact of the disaster program using Section 32 funds that was pushed by Sen. Lincoln.  I'm querying this part:
"Nonetheless, farmers will be able to qualify for a check merely by certifying they had a 2009 loss of 5 percent on their rice, cotton, soybean or sweet potato crops last year. Those applying won’t need to supply new documentation to USDA, although their records could be subject to a spot check. Losses of 5 percent on a crop are within the range of normal year-to-year harvest variations, which is why previous disaster programs have generally required proof of losses of at least 20 percent."
I'm not sure the implication is right, though I can't find evidence to the contrary in a fast check of FSA. Usually a disaster program or crop insurance uses a yield, often known as an APH (standing for actual production history) which could be fairly representing an average of normal yields. But in the case of rice, cotton, and soybeans, it's possible the program uses the same yields as used for the big payment programs, which I think have been frozen for years, if not decades. Such yields, if I'm right, would represent much less than current normal production. 

[Note: just because I question the description, don't understand me to be defending the idea of the program. I'm not.]

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