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Published October 26, 2010, 09:06 AM

FSA touts farm program success in ND stop

FARGO, N.D. — Two weeks before the Nov. 2 election in a region with close congressional races, a top U.S. Department of Agriculture administrator made a stop in North Dakota to visit staff to underscore the financial benefits of farm programs.

By: Mikkel Pates, Agweek

FARGO, N.D. — Two weeks before the Nov. 2 election in a region with close congressional races, a top U.S. Department of Agriculture administrator made a stop in North Dakota to visit staff to underscore the financial benefits of farm programs.

Jonathan Coppess, administrator of the U.S. Department of Agriculture’s Farm Service Administration, hit Fargo, N.D., on Oct. 19 for a whirlwind of public appearances. At age 36, Coppess is a political appointee with lots of credentials — Ohio farm native, former Archer Daniels Midland grain merchandiser, former legislative aide to Sen. Ben Nelson, D-Neb., and former Chicago lawyer.

He held a news conference in Fargo, N.D., and made appearances on various talk show and interviews. His biggest selling points to farmers — the FSA’s beginning farmer loan programs and its permanent disaster program. The political subtext of the visit was that those benefits were delivered recently by Congress and the Obama administration — with an extra kick from the sometimes maligned “stimulus package.”

The permanent disaster program, titled the Supplemental Revenue Assistance Program, has had a big effect, Coppess says. North Dakota led the nation in payments from SURE, a program that the region’s congressional delegation pushed as a way to avoid ad hoc disaster efforts in Congress whenever there is a weather disaster.

In a related kick, Coppess highlighted the effects of the 2009 American Reinvestment and Recovery Act, a signature Obama initiative known as the “stimulus package.” That included extra SURE payment.

Coppess says SURE has been one of the “great successes” of the administration. He says it helps an ag economy remain healthy and a “big part” of an economic recovery, even as it provides food to Americans at less than 10 percent of their incomes.

Coppess says the SURE payments are important because they are revenue-based, meaning they compensate farmers for low market value as well as low yields. State FSA Director Aaron Krauter notes that the programs offer “more reward” if the farmer accepts some of the risk.

In a news conference at state FSA headquarters in Fargo, the agency officials brought in two farmers as examples of their success.

Larry Hoffmann, a farmer from Wheatland, N.D., in west-central Cass County and a former county FSA county committeeman, says the stimulus shifted his payments from the 75 percent level he would have been, to a 90 percent “factor” maximum. That effectively doubled the payments he received for the 2008 disaster on a 3,000-acre farm he operates with a son and a brother. His crops suffered from untimely cold and wet conditions in both 2008 and 2009, causing poor-quality grain and resulting in financial discounts at the elevator.

Hoffmann acknowledges he “would have made it” without the SURE program and the stimulus, but that he wouldn’t have been able to upgrade his machinery without it.

“In 40 years I’ve farmed, these programs are the best I’ve ever had to work with,” he says, both in being “farmer-friendly” and “friendly to the agency” that administers them.

Nationally, $1.6 billion have been delivered through SURE recipients, across the entire country, Coppess says.

ND leads the way

North Dakota was the top state, so far, with $259.3 million so far for 2008 SURE payments as of Oct. 18. That includes $164 million under the regular SURE program and another $95 million under the “stimulus” payment. Some 9,000 producers have received payments and another 4,000 applications are pending.

Among the counties so far with the largest SURE payments are Cass, Richland, Sargent and Dickey, in the southeast, each with more than $6 million in payments. In the west, a string of seven counties from Bottineau in the north to Hettinger in the southwest, each received more than $6 million in SURE payments.

Top counties for total SURE payments are McLean, $17.3 million; Hettinger, $16.6 million; and Stutsman, $12.2 million. Top payments on the stimulus SURE payment piece of the program were McLean, $6.4 million; Hettinger, $4.2 million; and Stark, $4.2 million.

The SURE payments are designed to complement crop insurance, which paid out more than $20 million each in 15 counties, led by Stark, $50.7 million; McLean, $43.4 million; and Hettinger, $41.9 million.

Coppess and Krauter note that beginning farmer loan programs are a sign of success.

Spreading the word

They say the programs themselves have not changed significantly in the Obama administration, but that the administration is working harder to publicize them, promoting them with commercial lenders, and has instituted computer monitoring programs that help shift loan dollars to where they’re needed much more quickly than in the past.

Jeremy Johnson, 30, of Sharon, N.D., says the FSA’s Beginning Farm Loan program helped him start farming in 2005, and — buying out an uncle’s operation and coming alongside his father and a brother — to take on his piece of a grain and cattle operation he’s been working with since he was a kid.

“I don’t think I’d be operating if he didn’t have the program,” Johnson says. “I think I’d be in an office job.”

The 2003 farm business management graduate of North Dakota State University in Fargo says the operating loans started at $300,000 per year but doubled to $600,000 a year to make the same margin of profit to live on. The FSA loans cover some of his real estate machinery. The government programs involve a “major hassle” of paperwork, but that the hassle actually is worth it because it forces young operators to do what they should be doing anyway.

Johnson says a local lender had declined to take on the risk of his loans without FSA participation. One criticism Johnson has of the FSA loans is that grain storage loans that are not mortgage-backed remain limited to $50,000, which was half of one storage bin he built last year. Meanwhile, mortgage-backed loans limits have increased from $250,000 to $500,000.

The state has funded 931 loans in 2010, which is up 127 from the previous year. Those loans totaled $148 million. Of those, 59 percent were for direct operating and direct farm ownership loans for beginning farmers and ranchers. Coppess notes that the loans are more than money, but help borrowers with business plans. Unsubsidized loan guarantees are up $26.8 million in the state, totaling $61.4 million so far in 2010.