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1 1 (May 07, 2020)

handle is hein.crs/govdace0001 and id is 1 raw text is: - cy, ' c ns ........'.. May 7, 2020 Wildfires and Hurricanes Indemnity Program (WHIP) The U.S. Department of Agriculture (USDA) administers a suite of programs that assists farmers and ranchers with recovering from a natural disaster. Most of these programs are permanently authorized and receive funding from mandatory sources. In recent years, Congress has supplemented these programs with additional assistance, often referred to as ad hoc assistance. In 2018, USDA created the Wildfires and Hurricanes Indemnity Program (WHIP) to implement the bulk of this ad hoc assistance. USDA has implemented two versions of WHIP along with multiple subprograms and block grants to states. This In Focus provides an overview of WHIP and its components. For an overview of all USDA disaster assistance programs, see CRS Report RS21212, Agricultural Disaster Assistance. Following an active hurricane and wildfire season in 2017, the Bipartisan Budget Act of 2018 (BBA 2018, P.L. 115- 123) authorized $2.36 billion for agricultural production losses. The BBA 2018 funding is limited to crop, tree, bush, and vine losses from a wildfire or hurricane occurring in 2017. USDA announced that the bulk of the BBA 2018 funding would be applied to the creation of a new supplemental program-WHIP (referred to as 2017 WHIP). USDA also used $340 million for a block grant to the State of Florida to assist the citrus industry. Additional production loss occurred in 2018 and 2019 following prolonged flooding, hurricanes, wildfires, and other natural disasters across the country. Congress authorized over $3 billion in supplemental funding to cover these losses in P.L. 116-20 (FY2019 supplemental). USDA announced the majority of the FY2019 supplemental appropriation funding as an expanded version of WHIP, referred to as WHIP+. The FY2019 supplemental also required payments for additional losses not previously covered, including crops that were prevented from being planted in 2019, on-farm stored commodities, and milk losses. The FY2019 supplemental appropriation authorized, and USDA made available, block grants to select states to cover livestock, poultry, and forestry losses. Pursuant to BBA 2018, funding for 2017 WHIP expired on December 31, 2019. Prior to its expiration, approximately 60% of funds were unobligated. On December 20, 2020, the FY2020 Further Consolidated Appropriation Act (P.L. 116- 94, Division B, §791) repurposed $1.5 billion of those funds to WHIP+, expanded eligibility, and added program requirements. 2017 WHmP The 2017 WHIP program made payments to farmers and ranchers with crop, tree, bush, and vine losses from a wildfire or hurricane occurring in 2017. Payments to producers varied depending on whether they had purchased policies under the federal crop insurance program (crop insurance) or the Noninsured Crop Disaster Assistance Program (NAP). These subsidized crop insurance policies indemnify yield, revenue, or margin losses on more than 100 eligible crops. NAP offers a minimum level of coverage for reduced yields and losses on crops not eligible for crop insurance. For full eligibility, both crop insurance and NAP must be purchased prior to a natural disaster. Under 2017 WHIP, producers who purchased a crop insurance or a NAP policy could receive payments for 70%-95% of the expected value of the crop depending on the level of coverage purchased. For producers who did not purchase a policy in advance of the natural disaster, payments were limited to 65% of expected value of the crop. All payments were reduced by the value of the crop harvested, if any, and any insurance indemnity paid through crop insurance or NAP. All participants were required to purchase crop insurance or NAP for the next two crop years. Payments under 2017 WHIP were limited to $125,000 per person or legal entity if less than 75% of the participant's adjusted gross income (AGI) was from farming. If more than 75% of the participant's AGI was from farming, then payments were limited to a maximum of $900,000 per person or legal entity. W H N, USDA implemented the FY2019 supplemental as WHIP+, similar to 2017 WHIP. The FY2019 supplemental appropriation expanded covered losses for crops, trees, bushes, and vines in 2018 and 2019 as well as eligible natural disasters, including Hurricanes Michael or Florence, other hurricanes, floods, tornadoes, typhoons, volcanic activity, snowstorms, and wildfires. The FY2020 appropriation further expanded WHIP+ to include reduced crop quality and losses from drought and excessive moisture. Payments for WHIP+ are based on several factors, including (1) the expected value of the crop, (2) the level of insurance or NAP coverage, (3) a WHIP+ payment factor, (4) the value of the crop harvested, and (5) insurance payments received. Payment calculations vary based on the level of production loss; market value of crop loss; and physical tree, bush, and vine loss or damage. Producers who purchased crop insurance or NAP are eligible for payments of 75%-95% of the expected value of the crop depending on the level of coverage purchased. Payments for producers who did not purchase a crop insurance or NAP policy are limited to 70% of the expected value of the crop. Similar to 2017 WHIP, all WHIP+ participants are required to purchase crop insurance or NAP for the next two crop years. Wy's C.,, E, 'gmm mgnowgo 10 0\ ILU

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