Hurricanes, Credit Crunch Hit Louisiana, Texas Agriculture

Like farmers and ranchers across the United States, agriculture producers in Texas and Louisiana have been impacted by rising fuel and fertilizer costs, and they fear the credit squeeze gripping the nation will make it harder to get loans to plant crops next year. In addition to those worries, Hurricanes Gustav and Ike significantly raised the hurdles faced by agricultural interests in southeast Texas and all across Louisiana.

Louisiana farmers were especially devastated by Gustav, which brought heavy rains and high winds to nearly every parish in the state. Agriculture and Forestry Commissioner Mike Strain, D.V.M., recently told the U.S. Senate Committee on Agriculture, Nutrition and Forestry that Louisiana agricultural losses caused by Hurricanes Gustav and Ike were unprecedented.

“This is the largest natural disaster affecting agriculture, aquaculture, forestry and fisheries in Louisiana history,” Strain told lawmakers. “No parish or commodity was spared by these storms.” He has asked Congress for $700 million in aid for Louisiana agricultural producers.

“Many farmers did not borrow enough money to cover these exorbitant costs and have used all available credit. Since the storms occurred just prior to harvest (many) will not be able to repay their lenders and suppliers,” Strain said.

Strain met with farmers at eleven separate meetings in the aftermath of the storms, according to a statement released by his office. He says Louisiana producers will have a difficult time staying in business without help.

In Texas, Carl Anderson, an agricultural economist at Texas A&M University, told the Associated Press that farmers fear the country’s financial meltdown will make bankers reluctant to make loans to farmers. Anderson suggested lenders will want more equity and collateral before approving loans for most in the agricultural sector.

Texas Agriculture Commissioner Todd Staples has said Ike’s impact on agriculture in Texas “is staggering with the direct and indirect losses totaling several hundred million dollars. Many producers are left with croplands that will not be productive for one to possibly two years, and some have lost their entire operations, possibly forever.”

Staples has asked the U.S. Department of Agriculture for assistance with future agricultural and rural restoration.

Farm Relief Act Blocked

U.S. Senator Mary L. Landrieu, D-La., in late September introduced the Farm Relief Act of 2008, which would provide $1.12 billion in assistance to farmers impacted by hurricanes Gustav and Ike, Tropical Storm Fay, the Midwest floods, and recent tornadoes, wildfires and droughts.

However, the Senate delayed passage of the emergency disaster aid bill due to the objections of Senator Tom Coburn of Oklahoma.

“Oklahoma farmers would benefit from Senator Landrieu’s bill but Senator Coburn blocked the passage,” Louisiana’s Commissioner Strain said. “Senator Coburn said the 2008 Farm Bill disaster program would take care of the farmers.”

Landrieu believes otherwise. The 2008 Farm Bill created an agricultural disaster relief program called SURE, but regulations have not been set yet for its administration, and farmers are unable to apply for assistance until next year at the earliest, according to a statement released by Landrieu’s office. Her introduced legislation would have made funding available to farmers immediately for damage to crops including sugar, rice, cotton, wheat, corn, sugar beets, sweet potatoes and others.

The Farm Relief Act was cosponsored by Sens. Kay Bailey Hutchison, R-Texas; Blanche Lincoln, D-Ark.; Mark Pryor, D-Ark.; Roger Wicker, R-Miss.; and Thad Cochran, R-Miss.

The USDA, meanwhile, has designated 52 of Louisiana’s 64 parishes as agricultural disaster areas, making many Louisiana farmers eligible for low-interest emergency loans.

Topics Catastrophe Natural Disasters USA Texas Legislation Louisiana Hurricane Agribusiness