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Aid Is a Bumper Crop for Farmers

A Perennial Safety Net

Conrad's home state highlights how disaster aid has become a kind of perennial safety net for risk-prone farmers. North Dakota ranks second, behind only Texas, in total disaster aid, with almost $1 billion in the past decade. Its farmers have suffered floods and droughts, with many getting payments over and over.

Federal agricultural disasters have been declared five out of the past six years in Cavalier County, where farmers grow wheat and barley on flat, wind-blown fields in the northeastern corner of the state. None of the farmers' applications for aid for their 2003-2004 crops was turned down, records show. "There was no reason to turn any down," said Michele Schommer, who heads the local office of the Farm Service Agency. "The whole county was bad."

Although accounting for 2 percent of all farms in North Dakota, Cavalier County has received more than 7 percent of the state's disaster payments in the past decade. The average total of $113,000 per farm was more than double the state average and nearly 20 times the national average.

At 6,300 acres, Dettler Farms is among the biggest in Cavalier County. It has collected disaster payments each time they were available in the past decade -- $450,000 all together. The farm has also received insurance payments nearly every year, said Steve Dettler.

Last year "was the worst year ever," Dettler said. Rains came during the planting season in June. "You couldn't get into the fields."

Dettler and other farmers are counting on more help. In late August, Conrad staged a rally of 400 farmers in Bismarck supporting a multibillion-dollar aid package to help farmers and ranchers in the western part of the state, which has been beset by drought. He was joined by Gov. John Hoeven (R).

The drought has actually helped Cavalier County by drying out fields that had been flooded; farmers there are harvesting one of their best crops in a decade. But Dettler said he hopes there is a disaster program to cover his 2005 losses.

"We depend on it being there every other year," he said. "It's an election year, and everyone's involved this time."

Conrad said that "it's a key and legitimate question" to ask how much aid farmers should get. But he added, "We're in something extraordinary. Go to the Gulf Coast, they have 100 years' experience with hurricanes. We don't say, 'Enough' to Florida, or to California and earthquakes, wildfires and mudslides. As a matter of national policy, we help out areas that have natural disasters."

How Much Risk to Bear?

How much risk should taxpayers expect American farmers to bear on their own?

Mark Orebaugh struggles with that question while sitting at the kitchen table in his modest home northwest of Dodge City, Kan. He has received hundreds of thousands of dollars in federal crop insurance in the last four years. An additional $116,000 has arrived in disaster payments.

Finally, after a long pause, he answers that he could tolerate up to a "20 percent" crop loss. "I don't think 20 percent is a disaster," he said. "I could probably handle that if you average out the good and bad years."

But Orebaugh is uncertain and looks to his banker, Leon Flax, for help. Flax, tall and dressed in blue jeans, has worked with Orebaugh and other farmers for years. "I don't know," he says, shaking his head. "Not this year. I don't think you could handle anything this year."

A late freeze hit some of Orebaugh's crops. Then the temperature soared to 100 degrees in June and remained there for weeks, baking his wheat, corn and grain sorghum. The claims adjuster has already been by once, and Orebaugh expects him back soon. He hopes to collect about $200,000 in crop insurance.

Like most Kansas farmers, Orebaugh is heavily insured. With the help of government subsidies, he has covered up to 75 percent of the yields on the 6,000 acres he owns or leases.

Orebaugh said the insurance alone is not enough. To begin with, it does not cover all of a farmer's losses. In addition, if a farmer suffers poor harvests in back-to-back years, his insurance policy, which is based on his average yield over four years, covers less. This is a major sore point in areas such as Kansas, which has been hard hit by droughts.

"I'm not sure what more we can do," said Rebecca Davies, a regional director for the crop insurance program in Topeka, Kan. "We have coverage [plans] of up to 85 percent. What more could you ask for? They still pass disaster programs."

Kansas farmers have received $421 million in disaster payments since 2001, among the highest payouts nationally. That is in addition to $1.3 billion in insurance payments to farmers and $680 million in federal subsides to help farmers pay their premiums.

For Orebaugh and most Kansas farmers, the federal insurance is "a good deal." In the past four years, he has paid $81,730 in premiums but collected $295,796 in claims-- or $3.62 for every $1 he put in. That's higher than the state average, but Orebaugh farms on the western side of Kansas where water is scarce and much of the farmland isn't irrigated.

"There's just no water," he said. "We probably should never have developed those [fields] when we did 30 years ago because the water table was declining."

Orebaugh's grandfather immigrated from Germany in 1901. "He crossed two of the most fertile valleys in the country, the Missouri and the Mississippi, and settled in western Kansas," Orebaugh said. "Why he ever landed in this godforsaken valley I don't know."

A drought has plagued much of western Kansas, including Ford County, where Orebaugh farms, since 2000. Orebaugh has had two good crop years out of the last six. "This year is going to be a wipeout," he said.

The good years help to average out the bad. "I use the money to pay back my loans," Orebaugh said. But he quickly adds that he rarely gets ahead. "That's why we need disaster assistance. It's the only way we can pay back our loans."

This year, Orebaugh took on an additional 1,000 acres in his operation and has higher costs and a bigger bank loan, about $230,000. "Talk about a case of bad timing," he said. Now, he is "praying" for another disaster bill.

"We don't like it any more than the taxpayers do. With disaster assistance, we're at the whims of the politicians," he said. "But we need something. I don't care what you name it.

"It's feast or famine here. Economically, does it make sense? Probably not. Philosophically, I don't know. Americans want cheap food, and they want it when they want it."

Research editor Alice Crites contributed to this report.


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