July 24, 2012

 

US farmers may use environmentally fragile land for livestock feed

 

 

Facing the worst drought since the 1950s, US farmers can use environmentally fragile land for livestock feed, the US government said on Monday (July 23), as it also requested crop insurers to provide growers more time to pay premiums.

 

Agriculture Secretary Tom Vilsack announced those steps during a teleconference from Iowa and called on the House of Representatives to vote in the next two weeks on the US$491 billion farm bill. If Congress enacts a new farm law, it could revive disaster relief programmes that have lapsed.

 

"Our tools are limited," said Vilsack. "The key here is getting the House to do its work."

 

Corn and soy futures prices hit record highs last week, driven by relentlessly dry and hot weather in the Farm Belt and fears of a short crop, which could push up food prices. The US corn supply is forecast to be the smallest in 16 years at the end of the summer. Wheat prices are up 55% in a month.

 

The USDA has declared 1,297 counties in 29 states, or 42% of all US counties, as disaster areas, making them eligible for low-interest loans.

 

USDA will allow haying and grazing on Conservation Reserve and Wetlands Reserve land in counties affected by drought, said Vilsack. Until now, haying and grazing was restricted to Conservation Reserve land in harder-hit counties. Landowners will be allowed to sell hay harvested from the Conservation Reserve, he said.

 

The Conservation and Wetlands Reserves pay landowners to retire environmentally fragile land from crops. Some 32 million acres are enrolled in the programmes. Landowners give up a portion of their rent on land used for emergency forage.

 

As a step to help growers conserve their cash, Vilsack sent a letter to crop insurers asking them to allow farmers until November 1 to pay premiums without penalty. Ordinarily, payment is due August 1 with a 30-day grace period. Crop insurance is the most widely used method by farmers for risk management. Some 264 million acres are covered by 1.14 million policies with a value of US$110 billion.

 

Farmers planted nearly 326 million acres this year to the two dozen "principal" crops, ranging from corn and soy to flaxseed and sweet potatoes.

 

Analysts see little chance for a new farm law this year. Farm-state lawmakers are pressing for a House vote before the summer recess. A sizable faction in the House wants to make significant cuts in the bill and Democrats want to reduce or eliminate cuts in food stamps for the poor, so passage is not certain.