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WASHINGTON - U.S. Representative Jo Ann Emerson (MO-08) today asked President Bush to instruct the U.S. Department of Agriculture to reconsider the Loan Deficiency Payment program and work to resolve the barge shortage facing Southern Missouri farmers at harvest. Hurricane Katrina and Hurricane Rita have left producers with stores of crops normally exported through New Orleans.
“Transportation and storage costs to our producers have skyrocketed,” Emerson said. “Farmers who rely upon the Mississippi River to transport their harvest to port have been directly affected by these disasters.”
In Southern Missouri’s Eighth Congressional District, the supply of agricultural products has exceeded storage capacity, causing grain elevators to turn customers away and forcing farmers to store their harvested crops outdoors on the ground in some cases. Barge transportation, ordinarily a reliable and affordable means of getting product to market, is expensive and uncertain in the wake of the hurricanes.
“We normally would be sending these crops down-river to a thriving, active port. Right now, however, New Orleans is at a fraction of its capacity and barges are at a premium,” Emerson said. Her letter to the president asks him to work with barge companies to send more barges upriver to handle demand, empty, if necessary.
Emerson’s letter also asks that farmers, in addition to grain elevator operators, be compensated for alternative storage methods for grain which they are unable to ship. This arrangement would also ease the burden on river traffic, she argues.
“In a time of acute hardship for our region’s farmers, it is important to reach out and make use of programs such as LDP. Right now, the cost-basis that the Farm Service Administration relies upon to issue appropriate payments does not account for the high costs of transportation and storage, not to mention the fact that some crops are literally rotting on our farmers’ doorsteps,” Emerson said. “This is a matter that requires flexibility and a creative solution, and I hope the administration gives its fullest attention to helping these farmers in their time of need.”
A copy of Emerson’s letter is attached.
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Dear Mr. President:
Hurricanes Katrina and Rita have posed difficult and unforseen problems for our country. The residents of affected areas face a long uphill fight to normalcy. As you know, this fight is also being fought on farms across the Mid-West and Mid-South as well.
The Mississippi River is the critical leg of our transportation system for agricultural commodities and supplies. For over 200 years our nations farmers have relied on the Mississippi Rive for reliable, affordable transportation. Today, the river transports 92 percent of the nation’s agricultural exports. In calendar year 2002, 1.1 billion bushels of corn, 389 million bushels of soybeans, and 32 million bushels of wheat were transported to the Gulf via the Mississippi River. The reliability and cost advantage of
river transportation draws shipping customers from as far as 180 miles on either side of the river. However, the devastation and disruption brought by Hurricanes Katrina and Rita have diminished the effectiveness of this valuable resource. The temporary loss of this resource and the high transportation cost which followed exposed significant gaps in the structure of our services to our farmers, particularly the calculation of loan deficiency payments.
Transportation costs on the river have skyrocketed. According to the USDA’s Agricultural Marketing Service, barge rates are falling, however, they remain double the rate of October 2004. These increased costs have been passed along to farmers throughout the Mid-West and Mid-South. In spite of the high prices currently being paid for grain at the Gulf, farmers along the river continue to receive prices well below the loan rate. In addition, due to the high prices at the Gulf and difficultly in estimating the high
transportation costs, the Farm Service Agency’s daily calculation of the posted county price has often overshot local prices. These errors have added to the farmers’ burden by precluding any Loan Deficiency Payments. The historic reliability of river transportation has made both on-farm and commercial storage facilities largely redundant in these areas. This severe lack of storage combined with the large carryover
of last year’s stocks has resulted in many farmers being forced to seek alternative storage, even going so far as to store grain on the ground.
I understand that the Farm Service Agency is aware of these concerns and has taken some action to address the storage and transportation problems. These actions include compensating large grain elevators for alternative grain storage methods and assisting in the removal of spoiled grain from barges in an effort to ease shortage problems. However, I believe that more could be done. I request that the Farm Service Agency’s compensation for alternative storage be expanded to include individual farmers, particularly smaller farms that have been hit particularly hard by the storage crisis. I would also request that USDA consider providing assistance to barge companies for the transportation of much-needed barges upriver, empty if necessary. In addition, the unprecedented transportation costs that accompanied Hurricane’s Katrina and Rita exposed a significant flaw in the Farm Service Agency’s calculation of local county prices and loan deficiency payments. I would request that USDA honor their commitment to provide a stable farm safety net and develop a program to compensate producers who sold grain at below market loan prices and either did not receive a loan deficiency payment or received an artificially low payment. We have a long way to go before we can begin to think about normality, both along the coast and along the banks of the Mississippi River. These efforts would be a much needed start.
Sincerely,
JO ANN EMERSON
Member of Congress
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