FSA programs explained: Livestock Indemnity Program
February 25, 2011
As calving season has arrived, I wanted to take this opportunity to highlight some important provisions of the Livestock Indemnity Program because every rancher knows that the heaviest calving days seem to always correspond with bad weather. The Livestock Indemnity Program (LIP) is available to livestock producers that suffer livestock losses in excess of normal mortality caused by adverse weather including losses because of floods, blizzards and extreme temperatures.
First of all what is “normal mortality”? The Farm Service Agency’s establishes a rate by which, on average, a livestock producer would expect loose on any given year. These rates are established statewide and can be area specific if conditions exist that would warrant a different mortality rate. For example, in South Dakota, the normal mortality rate for calves weighing less than 400 pounds, is 5 percent. For additional normal mortality rates, please contact your local Farm Service Agency Service Center.
Normal mortality is not simply a blanket number used to reduce payments. Normal mortality is a threshold that must be met before a producer is eligible for compensation. All livestock losses, regardless of the cause of loss can be used to meet the normal mortality threshold. For example, if a livestock producer with 100 bred cows looses 5 calves due to normal calving problems, and then looses 3 calves to a blizzard, the 3 calves would be eligible for compensation since the normal mortality threshold has been met. However, if the same producer did not lose any calves during calving and lost the same 3 calves in a blizzard, the calves would be ineligible for compensation since the normal mortality threshold had not been met.
If you find yourself suffering losses due to adverse weather and would like to file an application under LIP for your livestock losses, you must file a notice of loss within 30 days of the loss. This can be accomplished by calling, faxing or e-mailing your local Farm Service Agency Service Center and notify the office of your losses and the reason for your losses. A notice of loss should be completed for each adverse weather event that causes losses. Simply filing one notice of loss at the beginning of the year will not cover all losses incurred throughout the year if you suffer losses due to multiple adverse weather events.
Once you have notified the FSA by completing your notice of loss, you must complete your application for payment. This must be accomplished no later than 30 days after the end of the calendar year. When filing your application for payment, the livestock producer will provide the FSA the beginning inventory of the livestock, the number of livestock that died due to adverse weather conditions, the number of livestock that died due to normal mortality, and the ending inventory for the year. When providing livestock inventory and losses, producers must provide verifiable records to prove their inventory. Additionally, producer must provide verifiable proof of death losses as well. If verifiable records are not available, producers may provide reliable records (documents that exist at the time of the losses) in order to prove their losses. Proof of livestock losses should include all losses incurred as a result of adverse weather in addition to livestock losses caused by reasons other than normal mortality.
Documentation is very important with this program. The producer has the burden of proof to prove livestock inventories and death losses in this program. Good documentation is important when applying for this program. Livestock payment rates have been posted for the 2011 year and can be found at http://www.fsa.usda.gov.
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james neill is the county executive director for the farm service agency in meade county, south dakota and can be contacted at email@example.com. questions about the livestock indemnity program or any other program administered by the farm service agency should be directed to your local farm service agency service center.