NDGGA, MAWG urge fix for restructured farm business

By Tracy Sayler

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Prairie Grains is the official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain Growers Association,
South Dakota Wheat, Inc., and the Minnesota Barley Growers Association.

Producers will receive assistance for documented scab-related losses. Producers can also receive payments under single year or multi-year provisions of the program, but not both.

Under the single-year loss provision, producers will be compensated if losses in 1998 exceeded 35% of historic yields. Insured crops and non-insurable crops will be compensated at 65% of crop insurance price elections, and uninsured crops will be compensated at 60%.

Rules for the multi-year loss provision: producers who carried federal crop insurance, or who grow non-insurable crops, and had indemnifying losses in three or more years from 1994 through 1998, will receive an extra payment equal to 25% of insurance claim payments made during that period.

However, The North Dakota Grain Growers Association and the Minnesota Association of Wheat Growers have pointed out to federal lawmakers and administration officials that some producers may not qualify for the program, simply because they have changed their business or ownership structure since 1994.

A change in business or ownership structure— producers who have formed a partnership, became incorporated, or became sole proprietor of a farm that was formerly incorporated or under partnership— can change a producer’s taxpayer federal identification number. This number is used in the determination of disaster program eligibility.

Therein lies the potential problem: for example, a person who farmed as a sole proprietor through 1996, has farmed in a partnership with his son since 1997, and had indemnifying losses 1994, 1995, and 1997, would not be eligible for the multi-year provision of the disaster program, because of this technicality.

One remedy, the NDGGA and MAWG have suggested, might be to refer these cases to FSA county committees for eligibility determinations. Or, to correlate changes in federal identification numbers, perhaps through documentation that an affected individual producer would bring before his or her county committee.

Affected producers should keep in contact with their local FSA offices in the event of a rule change. More information on the Crop Loss Disaster Program may be found on the FSA’s web site: www.fsa.usda.gov/pas/disaster/cldap/default.htm.