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Strain recommends crop replanting loan program

December 18, 2008

Agriculture and Forestry Commissioner Mike Strain, D.V.M., told the Louisiana Recovery Authority Board of Directors Wednesday, December 17 that he is planning to use community development block grants (CDBGs) to fund low-interest loans to help farmers affected by the 2008 hurricanes replant their crops.
The money will be administered through the Louisiana Agriculture Finance Authority.
“We cannot allow our agriculture industries to plant markedly less acreage or cease to exist because we can’t get them some loans or assistance in a timely fashion,” Strain said. “Farmers were at harvest time and hit with a perfect three-storm system over a month’s time with continual rain. Tropical Storm Faye and hurricanes Gustav and Ike hit us with a billion dollar loss at the farm level.”
Strain said he expected $30 million to be available for the program in March 2009 if the plan is approved the State Legislature and the United States Department of Housing and Urban Development.
The money will come from CDBG funding the U.S. Congress approved for Louisiana and other states hit with natural disasters in 2008, Strain said.
HUD recently approved more than $2 billion in CDBGs to all states affected by the 2008 droughts, wildfires, tropical storms and hurricanes in October. Louisiana is expected to receive $438.2 million of the $2 billion.
More than 65 percent of the cotton crop, 12 to 15 percent of sugarcane crop and 75 percent of the sweet potato crop was lost due to the storms, Strain said.
“Farmers put every nickel they had or could borrow into their crops only to lose half their investment,” Strain said.
The majority of grain crops were pre-contracted to grain elevators but farmers will have trouble meeting obligations to their buyers, Strain explained.
“If you make a contract and can’t deliver, you have to pay the difference,” Strain said. “Farmers could be looking at owing $5 to $8 a bushel to the grain elevators for grain they cannot deliver.”
Strain said farmers would not be able to take advantage of any aid programs provided by the Farm Bill until October of 2009 because the disaster claim rules have yet to be written for the program.
“If we don’t get some funds available to the famer, our entire agricultural infrastructure is at risk,” Strain said. “We’re trying to get money in the farmers’ hands immediately.
“We’re asking to use CDBG money to set up a loan program that can be borrowed by the farmer and agribusiness professional at a very low interest rate so we may get some capital into the system to try to keep our infrastructure in place.”
Strain said his plan, which is endorsed by the LRA, would only be used for 2009 crop replanting and would not interfere with Farm Bill provisions that prohibit duplicate aid programs.
Strain credited Governor Bobby Jindal, LRA Director Paul Rainwater and LRA Infrastructure Policy Director Kris Orsdel for supporting the plan.
“This is the first time the LRA has assigned a contact person to help us with our plan to get money to the farmers,” Strain said. “Kris Orsdel has been our go-to guy.”