Disaster Program

Here's an interesting article on the subject of disaster payments and the push for a permanent disaster fund. Author cites the EWG study on frequency of payments. I think I've commented before--one of my early assignments on the program side of ASCS was to follow up an OIG or GAO study on the disaster payments under the law in effect in the late 70's. They'd found recurring payments in some sample counties, so management agreed to do a review of the whole country.

Anyhow, the unanticipated consequences thing may be operating now.

At some point in the past (Freedom to Farm, maybe?) farm legislation started "freezing" the yields. There were two rationales: (1) allowing farmers to prove their actual yields (as they do under crop insurance) was encouragement to increase production and (2) freezing the yields saved money. (Apparently there was opportunity for a one-time change of yield under the 2002 farm bill.)

In the 1970's we could instruct counties to adjust the yields on farms that got recurrent disaster payments as part of the regular yearly process of adjusting yields. (Without getting into much detail, in theory the farm yields would weight back to the county yield, so a farm that got payments every year had its yield set too high.) But because of the freezing of payment yields for PFC and counter-cyclical payments, that process seems not to be available these days, which leaves FSA out on a limb in justifying/rationalizing the disaster payments.