By BECKY TALLEY
Sheep Industry News Associate Editor

(March 1, 2010)  Brandon Willis, deputy administrator for farm programs for the U.S. Department of Agriculture’s Farm Service Agency, was a key speaker to the American Sheep Industry Association’s (ASI) Board of Directors on Jan. 23 at the convention in Nashville.

He spoke to the program that is most on the minds of many producers, the Livestock Indemnity Payment (LIP) program.

The LIP program, passed in the 2008 Farm Bill, is designed to provide assistance to livestock producers for livestock deaths that result from disaster. LIP compensates livestock owners and contract growers for livestock death losses in excess of normal mortality due to adverse weather, including losses due to hurricanes, floods, blizzards, disease, wildfires, extreme heat and extreme cold.

The program was much needed for producers all across that nation that lost animals due to the blizzards and spring storms of 2008 and 2009, and so far, millions of dollars of payments have gone out to help sheep growers recoup some of their losses. ASI strongly supported the creation of this program.

Willis was on the ground floor of pushing this legislation through in his previous position as legislative assistant for Sen. Max Baucus (Mont.) who is a senior member of the Senate Agriculture Committee.

During his talk he explained the process of getting the program passed.
“First to appreciate the program now, you have to look at the last program that Congress passed. It was frustrating,” he explains.

The previous program compensated producers only 26 percent of market value of the animals lost, which was based on slaughter ewe data used to calculate the price.

“It wasn’t even a program, really,” relates Alzada, Mont., sheep producer Larry Pilster, who had the misfortune of losing 420 head due to weather. “The schedule for how they determined what you got paid was so minimal it was a joke.”

Under the last program, Pilster received $8.42 per head lost. He immediately contacted Willis and let him know the problem.

The current program provides a much fairer compensation level for producers.  Baucus was able to pass a 75-percent compensation rate for lost animals, something that Willis says is amazing, as Baucus started with that rate expecting to have to negotiate down through the various stages of the bill. He never did.
“For USDA, that is a good rate of compensation,” Willis relates.

In addition, the Agriculture Marketing Service’s Market News was approached by ASI to re-evaluate their market data, and they ran a new survey, coming up with a much more accurate value for sheep than the slaughter ewe data the previous program was based off.

According to Willis, at last count, LIP had paid out $50 million to producers to help with livestock loss. In the three years the prior program was available, it paid out $10 million less than that.

Meeker, Colo., sheep producers Angelo (Butch) and Anthony (Tony) Theos, can attest to the importance of the LIP program. After losing 10 percent more ewes, resulting in a 35-percent drop in lambing rates due to the weather in May 2008, the ranchers were able to apply for the program, which has helped them recoup some of the cost of lost stock, extra feed and other costs associated with the situation.
 “We paid a lot of bills with that money,” Tony says.

Butch also points that the indemnity payments, while they helped the ranch, really helped the county recoup losses as well.

“The reality is that the dollars all went back into the county through purchases we made. It’s helping the community,” he relates.

According to Anthony, good record keeping was key to being able to take advantage of the payments they received.

“Dad kept really good records, and we had pictures. The FSA (Farm Service Agency) was very thorough with what they did, but in our estimation it was okay because we wanted it to be right.”

Willis also told the board of directors that good recordkeeping was extremely important with this type of program, especially in light of the high compensation rate.

“It is subject to fraud because of the 75-percent rate, so it is very scrutinized. I would strongly encourage very good records. Producers that don’t have records won’t be paid.”