Central Valley Farmers and Drought Stress

OMAHA (DTN) -- California farmers remain stressed about drought conditions and limited water that is also affecting their crop insurance protections.

Those were a few of the issues raised by farmers Thursday as Rep. Jim Costa, D-Calif., a senior member of the House Agriculture Committee, held a farm-bill listening session in his home district. Farmers talked about the prolonged impact of the drought and some of the holes in the farm safety net.

Mark McKean, a farmer from Fresno County, said reductions of both state and federal water had cut water allocations to anywhere from 10% down to zero. "Productive farmland is being fallowed. We are fallowing on our own farm," he said.

The University of California-Merced looked at the 2021 drought in the state earlier this year and estimated 395,000 acres of crops were fallowed in the state, and the agriculture sector directly lost about $1.1 billion.

"There is talk about maybe fallowing 1 million acres," said Dan Errotabere, one of the farmers who spoke.

Errotabere also noted, "There is a direct nexus between ag production and water availability." The limits on water in the state also have led to a lot of financial pressure on producers. "The stress on the family farm is pretty high here."

Right now, there is no part of California that is not in some level of drought with much of the Central Valley and Costa's congressional district in D4 "exceptional drought" conditions -- the worst level of drought intensity measured by the U.S. Drought Monitor. Most of the state has been in at least D3 "extreme drought" for at least a year.

RMA PREVENTED PLANTING

The cutbacks on irrigated water go back even further in time. That loss of irrigated water and fallowing of ground also translates into the need for maintaining prevented-planting crop insurance and building in more flexibility into Risk Management Agency rules.

McKean pointed to RMA's one-in-four rule that requires a farmer plant and harvest a crop in one out of every four years to be eligible for prevent-plant coverage on that ground.

"This is extremely problematic due to the current drought facing the West," McKean said. He added, "We have extremely productive farmland, and it has a long history of being so. If this drought lasts longer than the arbitrary number chosen by RMA, we will start losing this coverage unless changes are made for our irrigated crops."

In a reply to DTN, a spokeswoman for USDA stated Friday the one-in-four rule was expanded nationally for spring crops in 2021, and expanded to apply to all crops for the 2022 crop year. The changes also were retroactive in 2021, meaning a crop had to have been planted and harvested in one year during the 2017-2020 crop years. Drought was added as cause for loss as well.

DAIRY

Geoffrey Vanden Heuvel, director of regulatory and economic affairs at Milk Producers Council, noted the Dairy Margin Coverage (DMC) only covers about 5 million pounds of milk -- production of roughly 250 cows.

Costa noted, "Which doesn't work very well in California."

The typical dairy farm in California is significantly larger than that, but Vanden Heuvel said the Milk Producers Council recognizes the financial and political constraints of expanding DMC despite the limited protections for larger operations.

"We accept the DMC at 5 million pounds, and we would oppose raising it any further."

Vanden Heuvel said larger milk producers have found a safety net in the Dairy Revenue Protection Program (DRP), an insurance program that doesn't cap the size of the operation. Dairy farmers can get 90%-95% revenue coverage, and the policy right now has a 44% premium subsidy.

"If additional funds could be found, increasing the premium subsidy by even 5% to 10% would likely increase dairy farmer participation in the DRP," he said.

PIMA COTTON

Kirk Gilkey, a cotton farmer from Corcoran, California, also said prevented-planting insurance has been very important to growers in this area "due to the natural and legislative drought California currently endures."

Gilkey said it was important for the farm bill to continue the non-recourse marketing loan to help with marketing and cash flow.

He also said the loan rate for Extra Long Staple cotton or Pima cotton grown in California should be maintained or increased as well because of higher input costs facing farmers. The loan rate was raised in the 2018 farm bill from 82 cents to 95 cents a pound.

"This rate should be examined and potentially increased in the 2023 farm bill," Gilkey said.

Ernie Schroeder, representing the American Cotton Shippers Association, noted ELS or Pima cotton makes up about 80% of the cotton acreage in California. Unlike upland cotton grown in the Southeast, Pima cotton does not have a price support level. Schroeder said the farm bill should establish a price support to make it in unison with upland cotton.

Schroeder also added there should be some form of safety net for cotton merchandisers as well. Those merchandisers lost money both in the trade war with China and due to the COVID pandemic.

FARM BUREAU

Jamie Johansson, president of the California Farm Bureau, talked about crop insurance and disaster aid. He also pointed to prolonged drought and destruction by wildfires that are "burning more intensely and no longer limited to a season."

Ad-hoc disaster aid and insurance policies "are an essential part of keeping farmers whole," Johansson said.

On crop insurance, California farmers are often limited because only about 80 specialty crops are covered by crop insurance, but farmers in the state grow as many as 400 different crops. He noted some pilot programs, such as one for strawberries, are offered, but not that many farmers are signing up because the policies were written for other regions of the country.

"We need these resources to be adjusted for these crops, not to how they grow in the Southeast or in the Midwest, but how we farm in California," Johansson said.

Responding to others who had testified about finding ways to link conservation to crop insurance, Johansson rejected that idea. He pointed to the need for crop insurance to protect risk management, while adding that conservation programs are popular with producers as well. Those programs, however, are separate in the farm bill.

"Those two are separate titles, and they are separate titles for a reason. Going back to the crop insurance, we must preserve the integrity of the crop insurance program while expanding the conservation program," Johansson said.

See "A House GOP Group Has a Plan to Cut Farm Programs" here: https://www.dtnpf.com/….

Also see "Deadline for USDA Emergency Relief Program is July 22" here: https://www.dtnpf.com/….

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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