USDA has granted a request from Georgia Gov. Sonny Perdue to declare 155 of the state's counties as primary disaster areas based on production losses due to drought and excessive temperatures. A similar designation was made earlier for the majority of counties in Alabama.
“I know personally that drought conditions are devastating to farmers and farming communities,” says Perdue. “Georgia farmers have sustained significant economic losses due to the dry conditions in Georgia, and I'm pleased that financial relief will now be available to them.”
The designation immediately triggers federal low-interest FSA Emergency loans to eligible producers in all Georgia counties. Georgia now has the second-highest number of disaster designated counties of all the states. Widespread, damaging drought and high temperatures have taken a toll this year on Georgia's crops.
“This declaration gives the opportunity for producers to take advantage of low-interest emergency loans now,” says Georgia Sen. Johnny Isakson. “This is the first step in the process for disaster assistance should Congress approve a disaster package when we reconvene.”
USDA named four Georgia counties as contiguous disaster counties. These include Fannin, Gilmer, Towns and Union counties. The disaster designation allows farm operators in both primary and contiguous counties to be eligible for low-interest emergency loans from the Farm Services Agency (FSA), provided eligibility requirements are met. FSA will consider each application for a loan on the basis of the extent of agricultural production loss.
Georgia counties that have experienced drought conditions affecting the state's agriculture since March 2006 submitted drought assessments to the Center for Agribusiness and Economic Development (CAED) at the University of Georgia in early August. These assessments indicate that counties reported agricultural production value losses totaling $819.4 million.
Cotton has the greatest production value loss at $239.5 million. Other field crop losses include peanuts at $101.4 million, corn at $40.1 million and tobacco of $25.3 million. Hay and forage losses of $107.6 million and pasture losses of $224.3 million have affected cattle production throughout the state.
Projected losses for the pecan crop are $49 million.
The balance of production losses are for vegetables, melons, fruits, and broilers.
Statewide losses are greater than 30 percent of the average production value for cotton, soybeans, sorghum and tobacco. Losses are greater than 50 percent for corn and pecans.
Production losses typically lead to additional losses when economic multiplier effects are not realized in the Georgia economy. Conditions that prevent planting cause a complete loss in economic activity because farmers do not purchase any inputs or services for the crop.
Losses that occur at the end of the season are viewed mostly as lost farmer income that is not available as household spending.
Losses occurring during the season are a combination of lost production impacts and income impacts. Losses occurring at the beginning of the season have a greater economic impact than losses occurring at the end of the season.
Combined direct losses for hay and pasture total $331.9 million and lead to total losses in output that range from $390.9 million to $572.4 million.
Direct losses for cotton cause total output losses that range from $282.1 million to $409.7 million.
Drought conditions are estimated to have total output impact losses that range from $965.0 million to $1.4 billion.
In Alabama, where drought and extreme heat also have been severe this year, officials are hopeful that several counties will qualify for emergency drought aid under a $780 million package announced in late August by U.S. Agriculture Secretary Mike Johanns.
“We're going to do all we can to help people get through the summer,” Johanns said in a press conference announcing the aid. “This program will help them very, very quickly. I can move on this right now. It doesn't require Congressional action.”
The bulk of the package is $700 million in counter-cyclical payments already due to cotton, grain sorghum and peanut producers. Another $30 million will come from unused conservation funds, and there will be $50 million in new grants for cattle and sheep ranchers. At least 740 counties in 20 states with extreme or exceptional drought conditions — the two most severe designations — will be eligible, Johanns says.
An area of south-central and southeastern Alabama was labeled as having extreme drought conditions, according to an update from the National Drought Mitigation Center in late August.
Johanns' announcement came under quick criticism from some farm group leaders and from members of Congress. A Democratic senator from North Dakota says the aid package is too small, and that most of it is money already due farmers later in the year.
“The reaction by the Bush Administration to the drought disaster gripping much of America's heartland is entirely inadequate,” says U.S. Sen. Byron Dorgan, D-ND. “I'm pleased they are finally acknowledging that farmers and ranchers need help. But given the size and severity of the drought, the amount of money Secretary Johanns is talking about is going to leave many farmers and entire counties without any help at all.”
The aid is in addition to more than $4 billion expected to be paid out in crop insurance this year, Johanns says.