No ARC-CO Fix for ’14 Says Farm Service Agency Leader06/14/2016
The head of the federal Farm Service Agency says he sees no fix for a farm program that farmers in some counties in the Dakotas say short-changed them by tens of thousands of dollars for the 2014 crops because other farmers failed to fill out voluntary yield surveys.
Val Dolcini, administrator of the U.S. Department of Agriculture’s Farm Service Agency, visited farms in Traill and Steele counties in North Dakota on June 3 to analyze his agency’s facility loan programs, and to answer questions about policy. FSA has 2,124 offices throughout the country, including 51 in North Dakota.
Dolcini says while some farmers felt cheated out of their payments, about $200 million was paid out on Agriculture Risk Coverage-County for the 2014 crop year. He says the “nature of county-based programs” is payments might be triggered in one county, but not the next.
He says the data is compiled at the Risk Management Agency, then to National Agricultural Statistics Service districts and then finally back to state FSA committees.
“We were missing data in just a handful of the counties where we made payments all over the nation,” Dolcini says. “It didn’t really happen in very many places.”
Logan, LaMoure and Steele counties in North Dakota experienced problems with a new program that paid about $4 billion across the nation.
Sen. John Hoeven, R-N.D., has offered an amendment to the USDA appropriation that would affect the 2017 fiscal year, and would provide a pilot program for calculating the 2016 crop year payments. “If Congress passes that law, we’ll certainly implement it to the best of our ability,” Dolcini says.
But Dolcini reiterated he doesn’t want FSA to retroactively change anything for farmers who felt short-changed in 2014. “I would have to open up the entire nation again to review data where folks might come forward to say, ‘Take a look at our data, as well,’” he says. “I can’t focus on one, two or more counties. I’ve got to do it for everybody if I’m going to do it for one.”
Aaron Krauter, state FSA director for North Dakota, traveling with Dolcini, says there are “fiscal, financial consequences” for failing to fill out NASS surveys, but they are voluntary, and if farmers don’t do it “we’ll have to live with that.” Krauter says he hasn’t seen the aggregate non-official crop insurance data that indicates the yields in Logan and LaMoure counties, collected by Progressive Ag Law of Fargo, which is part of a pro-bono lobbying effort to restore payments for 2014.
Dolcini says Logan County didn’t get sufficient survey response again in 2015. His agency is looking at helping NASS publicize its surveys so response levels are better. He says he doesn’t know if the importance of the NASS survey data was highlighted in educational meetings on the new program.
Erik Gerlach, NASS state statistician for South Dakota, at the South Dakota Governor’s Ag Summit in Brookings, says the ARC-CO issue has also been a “pretty heavy problem” for some producers in South Dakota. South Dakota and North Dakota are “well in the bottom half” of the country in returning NASS surveys. The Office of Management and Budget standards are 80 percent, and South Dakota is well below that — 60 percent or less.
“While we see these directs results in the ARC, there are so many other decisions and things going in our markets and our policy that rely on data,” Gerlach says.
The NASS data is also important for keeping track of environmental efforts and chemical use, to “go ahead and document the great job that our producers do in applying chemicals appropriately and responsibly, and applying fertilizers appropriately and responsibly.” Any information provided to NASS, when published for the public, is all aggregated.
Dolcini says with the softer farm economy demand for loans and loan guarantees are 22 percent higher this summer. He’s telling farmers to visit their FSA offices about loan servicing or restructuring options, or even new loans. “We’ll likely be in a situation where we’ll run low on moneys in the summertime as we often do,” he says. The agency continues to approve loans and when Congress approves new funds, the agency can obligate the loans.
North Dakota credit requests for FSA direct farm loans and guarantees are almost triple what they were last year, Krauter says. “We are projecting to do over $270 million this fiscal year in credit. The most interest is in the guarantees,” he says.
Compared to the 1980s, federal loan limits are higher and interest rates are a lot lower, Krauter says. “We haven’t seen that collapse in land prices and we don’t expect that,” he says, noting some recent upticks in corn and bean markets, and sunflower marketing contracts.
Dolcini met with farmers at a bin site and grain handling facility built five years ago by the Leslie Amb, family near Portland, N.D., in Traill County. The Amb family uses the $2.5 million facility to store about 280,000 bushels and can dry up to 3,500 bushels an hour. The FSA loans allowed the Ambs to stretch loans to five to seven years, rather than the three- to five-year loans available through conventional lenders. “That’s pretty important if you lived through the 1980s with the high interest rates, to know what your payments will be, five to ten years down the road,” Amb says.