Sheep Producers Can Apply for Indemnity Payments

The long-awaited details of the first livestock indemnity program to assist sheep producers who have had death losses in excess of the normal mortality due to adverse weather were released today. The rule will be effective July 13, 2009.

The U.S. Department of Agriculture's (USDA) Farm Service Agency (FSA) announced in the Federal Register the specific requirements for the Livestock Indemnity Program (LIP). LIP provides disaster assistance for producers with livestock losses in excess of normal mortality due to adverse weather such as hurricanes, floods, blizzards, disease, wildfires, extreme heat and extreme cold. Losses must have occurred on or after Jan. 1, 2008, and before Oct.1, 2011.

The American Sheep Industry Association (ASI) strongly supported a permanent disaster fund in the 2008 Farm Bill," comments Peter Orwick, ASI executive director. "Ad Hoc disaster bills were proving to be difficult to timely secure with the U.S. Congress but the inclusion of the trust in the new Farm Bill puts the authority with the USDA secretary."

LIP is the first of the five permanent FSA administered supplemental agricultural disaster assistance programs that will be made available through the Agricultural Disaster Relief Trust Fund.

Orwick adds, "The winters of 2008 and 2009 were unfortunately killer seasons on sheep ranches from Texas through to the Dakotas with huge losses of breeding sheep as well as on the lambing grounds. The LIP payments will be extremely important to sheep producers as they re-stock."

Producers who have suffered a potentially eligible loss of livestock prior to July 13, 2009, must provide a notice of loss to the FSA office by Sept. 13, 2009.

The 2008 Farm Bill provisions require LIP payments to be made at a rate of 75 percent of the market value of the livestock on the day before the date of the death of the livestock. Payment eligibility will be based on actual losses in excess of normal mortality for the calendar year for the loss. Producers can receive up to $100,000 through disaster assistance programs.

FSA, through the state FSA offices, will establish the normal mortality rate for sheep on a state-by-state basis. Payments are only available for losses beyond normal mortality over the course of the year. ASI has worked with USDA since April to expand the livestock market reports for values on breeding sheep and young lambs which will be crucial to fair payments under LIP.

"With millions of dollars in payments at stake, we all agreed that cull ewe prices would not be at all appropriate for deaths of valuable breeding sheep," concludes Orwick.

Producers should contact their local FSA office for additional details and for the application.

Staff contact: Peter Orwick, ext. 33