Disaster loans a possibility for farmers, insurance still an unknown
August 15, 2019
TORRINGTON – A pair of stakeholder meetings held by the Goshen Irrigation District in Wyoming and the Gering-Fort Laramie Irrigation District in Nebraska helped shed some light on some of the lingering questions local producers may have concerning the collapse of an irrigation tunnel along the Fort Laramie Canal on July 17, but there is still a lot of questions about the situation that haven’t been answered – and most of those questions concern money.
Chief among those is if the loss of crops along the ditch will be covered by crop insurance. A press release issued by the University of Nebraska Panhandle Research Center earlier this month stated that hinged on whether or not the factors that led to the collapse occurred by natural causes. Extension Educator Jessica Groskopf reiterated that to the assembly in Scottsbluff.
“There have been a couple of questions about crop insurance, and the answer to that is that we do not know whether or not your crop loss will be covered by crop insurance,” Groskopf said. “There has to be a determination about the cause of the loss. That loss must be from an unavoidable natural event.
“When they say unavoidable, the doesn’t necessarily mean from your perspective. That has to mean the loss as a total. We are working channels the best that we can.
“Regardless of the agent, it may not be covered. Once we have that cause, we will ask if it wil be covered.”
And even more unfortunately for farmers, insurance may be their best chance at recouping lost dollars.
“Crop insurance, at this point, is the only federal program that we’re aware of that covers crop loss,” she said. “There are no Federal Emergency Management dollars, none of those cover crop loss at this point.”
There was better news for farmers at the meeting in Wyoming. During the GID meeting, which was held at Eastern Wyoming College, Wyoming Business Council CEO Shawn Reese said the WBC could possibly allow farmers to apply for special loans.
“We have been evaluation the resources that the business council can bring to the table,” Reese said. “We still need to find ways to work on the infrastructure, the canal and the irrigation system, but where we think have a possibility to play a role would be to help the producers with economic disaster loans.”
In order for the economic disaster loans to be a possibility, Reese said there would have to be more than $1 million in economic losses, and the WBC Board of Directors would need to declare a state of emergency. If those things happen, farmers can apply for up to $500,000. The interest rate on the loan would be for percent with a 10-year repayment term.
“I do believe that the $1 million in economic loss in Goshen County is going to be very easy to determine,” he said. “I have seen some of the work the banks have put together, and I don’t see a problem calculating that risk.”
Reese said if the loss is covered by crop insurance, that would likely disallow farmers from economic disaster loan eligibility.
If crop insurance is applicable to the situation, the loans might not be able to happen,” he said.
And whether or not farmers get crop insurance payout or economic disaster loans, it seems that at least some of the cost of repairing the tunnel and canal will fall on the farmers.
During the GID meeting, board member Shawn Booth said the GID is doing the best it can not to pass all of the costs of the repairs on the farmers, but some of that is unavoidable. It has already begun, he said, with a $5/acre special assessment fee to help pay for the construction, and it’s still impossible to figure out exactly how much the project will cost because the tunnel is still being cleared and excavated, and the damage hasn’t been evaluated.
“When you look at the big picture, I can guarantee you right now that our taxes will never be the same,” he said.
“We realize that we cannot tax the farmer to the point that they can’t make any money doing this business. It will have an impact on the value of our land, it will have an impact on the value of our community, no doubt.”
But still, Booth said, the GID is working hard to find ways to ease the burden on local producers. The United States Bureau of Reclamation was able to step up with a $4 million loan with a 50-year repayment term, but the goal is to find money they don’t have to return.
“We’re seeking all kinds of emergency help,” he said. “We’re doing everything we can to get as much money granted, not loaned, but granted.”