Too Big for Disaster Aid, Farmer Chooses to Divide and Conquer
Sunday, October 15, 2006; 12:00 AM
NASHVILLE, N.C. -- When Hurricane Floyd flooded his crops in 1999, causing millions in losses, Dale C. Bone didn't get a dime from the government.
Bone was too big. His farming and packing business easily exceeded the government's cutoff of $2.5 million in annual gross income for federal disaster payments. "We were a lot larger than that," he recalled.
So following the hurricane, Bone got creative. Instead of continuing as a corporation, he restructured as a partnership with 13 different owners. That way, each partner could apply individually and fall below the government's income limit.
"We were forced to go into these partnerships to qualify," Bone said. "It's ridiculous. We should be able to get the payments regardless. It's the same people involved."
Soon, disaster aid was flowing to Bone's operations in eastern North Carolina, and it was all perfectly legal. Between 2001-2005, the Dale Bone Farms Partnership collected more than $4.7 million in federal disaster payments, records show. That made Bone, 63, one of the largest recipients of disaster aid in the nation. Still, he said, his losses exceed what he got in disaster aid.
Bone said the area was hit by a series of tropical storms and excessive rain. "Two thousand and four hurt the worst. We lost about 1,000 acres of sweet potatoes. We lost cucumbers with disease. Mildew was terrible. We've just had terrible weather."
Most of the payments Bone and his partners received came from the Noninsured Crop Disaster Assistance Program, or NAP, a little known federal plan for farmers whose crops do not qualify for federally subsidized insurance. Eligible crops include mushrooms, Christmas trees, ginseng, turf grass, sea grass and tropical fish. Bone said he qualified for cucumbers and sweet potatoes.
To apply for a NAP payment, growers must pay a $100 fee and meet certain deadlines. They have to lose at least half of their crop to a natural disaster, or be prevented from planting 35 percent of their intended acres. Growers get 55 percent of the average market price for losses.
Congress approved NAP in 1994 but expanded it in 2000. Since then, payments have grown sharply, topping $100 million each year and nearly $900 million since the program's inception. Unlike other disaster programs, NAP is fully funded and doesn't require annual legislation.
The Oak Ridge Fish Hatchery in Plant City, Fla., received $200,000 in NAP payments and $160,000 in regular disaster payments after two freezes killed tropical fish in some of its 400 open ponds a few years ago. "We have NAP because there's no crop insurance available for tropical fish," owner David Drawdy said. The firm, located halfway between Tampa and Orlando, sells to Wal-Mart and PETCO.
Steve Peterson, who oversees the NAP program, said fish hatcheries qualify as long as the fish are grown "in a controlled environment. We cover fingerlings, brood fish. We cover the food fish," he said.
For Dale Bone, who has retired from farming, the payments have ended. "I've sold my business," he said recently. "I'm down to zero. I'm out."