GAO DISASTER ASSISTANCE. USDA and SBA Could Do More to Help Aquaculture and Nursery Producers

Transcription

1 GAO United Sttes Government Accountbility Office Report to the Chir, Committee on Smll Business nd Entrepreneurship, U.S. Sente September 2012 DISASTER ASSISTANCE USDA nd SBA Could Do More to Help Aquculture nd Nursery Producers GAO

2 September 2012 DISASTER ASSISTANCE USDA nd SBA Could Do More to Help Aquculture nd Nursery Producers Highlights of GAO , report to the Chir, Committee on Smll Business nd Entrepreneurship, U.S. Sente Why GAO Did This Study Frmers nd other griculturl producers re exposed to nturl dissters, such s droughts, floods, hurricnes, nd torndoes. In the ftermth of such events, FSA nd SBA disster ssistnce progrms cn provide n importnt sfety net for these producers. However, fter pst nturl dissters, industry groups nd others hve rised concerns tht some smll griculturl producers prticulrly quculture (such s frmed fish nd shellfish) nd nursery (such s trees nd plnts) producers reported being ineligible to obtin this ssistnce. GAO ws sked to (1) exmine FSA nd SBA disster ssistnce progrms nd the coverge they provide to smll producers; (2) identify the min fctors, if ny, tht my limit smll quculture nd nursery producers prticiption in these disster ssistnce progrms; nd (3) exmine FSA nd SBA efforts to collborte in providing such ssistnce to these producers. GAO reviewed the 10 FSA nd SBA disster ssistnce progrms tht become vilble following nturl disster nd tht provide direct finncil ssistnce or lons to these producers, interviewed gency officils nd industry representtives, nd reviewed gency documents nd regultions. Wht GAO Recommends GAO recommends tht USDA nd SBA trget outrech to smll quculture nd nursery producers, for exmple, by building on existing outrech, nd develop strtegy to formlly collborte on disster ssistnce for such producers. USDA nd SBA generlly concurred with GAO s recommendtions. View GAO For more informtion, contct Lis Shmes t (202) or [email protected] nd Willim B. Sher t (202) or [email protected]. Wht GAO Found The U.S. Deprtment of Agriculture s (USDA) Frm Service Agency (FSA) nd the Smll Business Administrtion (SBA) hve 10 disster ssistnce progrms tht smll griculturl producers nd businesses tht support griculture cn use to recover from nturl dissters. These progrms serve lrgely different popultions but leve few gps in the disster ssistnce vilble to most smll griculturl producers. Aquculture nd nursery producers could be eligible for six of these progrms, but their prticiption is limited by wreness nd eligibility issues (see tble). FSA nd SBA Disster Assistnce Progrms nd Types of Losses Covered Progrm Crops Livestock Lnd Other FSA Supplementl Revenue Assistnce Pyments Progrm X FSA Tree Assistnce Progrm b X FSA Livestock Indemnity Progrm X FSA Livestock Forge Disster Progrm c X FSA Emergency Assistnce for Livestock, Honeybees, nd Frm-rised Fish Progrm d X X FSA Emergency Conservtion Progrm X FSA Emergency Forest Restortion Progrm X FSA Emergency Lon Progrm X SBA Economic Injury Disster Lon Progrm X SBA Business Physicl Disster Lon Progrm X Sources: GAO review of federl disster ssistnce progrm informtion provided by FSA nd SBA. These progrms re vilble to smll quculture or nursery producers. b FSA s Tree Assistnce Progrm does not cover crop production losses but provides prtil cost reimbursement to replnt or rehbilitte trees, bushes, nd vines. c This refers to the loss of grzing lnd for livestock. d For the purposes of this tble, GAO defines crops to include honeybees nd frm-rised fish. GAO identified three fctors tht my limit smll quculture nd nursery producers prticiption in the 6 disster ssistnce progrms for which they could be eligible. In prticulr, the producers re often not wre of the progrms, hve other options for ssistnce, or do not qulify becuse they do not meet certin progrm requirements. Both FSA nd SBA conduct outrech relted to their disster ssistnce progrms, but neither gency hs specificlly trgeted its efforts towrd smll quculture nd nursery producers. As result, eligible producers re missing opportunities to obtin ssistnce tht could help them mintin vible business fter experiencing nturl disster. FSA nd SBA engged in some informl efforts to collborte in providing disster ssistnce to smll quculture nd nursery producers. However, the efforts were limited becuse FSA field stff know little bout SBA s disster ssistnce progrms, nd SBA stff know little bout the fctors tht ffect whether n griculturl lon will be repid. GAO hs reported tht gencies with complementry progrms cn enhnce the vlue of these progrms through intergency collbortion. Without more forml collbortion, smll producers my not be consistently referred by one gency to the other, leding to fewer opportunities for these smll producers to get ssistnce for which they otherwise might qulify. United Sttes Government Accountbility Office

3 Contents Letter 1 Bckground Disster Assistnce Progrms Leve Few Gps in Coverge for Smll Agriculturl Producers Awreness nd Eligibility Issues Limit Smll Aquculture nd Nursery Producers Prticiption in Disster Assistnce Progrms FSA nd SBA Efforts to Collborte on Disster Assistnce to Smll Aquculture nd Nursery Producers Are Limited Conclusions Recommendtions for Executive Action Agency Comments Appendix I Objectives, Scope, nd Methodology 32 Appendix II Federl Disster Assistnce Progrms 35 Appendix III GAO Contcts nd Stff Acknowledgments 38 Relted GAO Products 39 Tbles Tble 1: 10 FSA nd SBA Disster Assistnce Progrms nd Types of Losses Covered Tble 2: FSA Csh Assistnce Progrms Tble 3: FSA nd SBA Disster Lon Progrms Tble 4: Disster Assistnce Progrms Tht Cover Aquculture nd Nursery Losses Pge i

4 Abbrevitions ELAP Emergency Assistnce for Livestock, Honeybees, nd Frm-rised Fish Progrm FEMA Federl Emergency Mngement Agency FSA Frm Service Agency NAP Noninsured Crop Disster Assistnce Progrm RMA Risk Mngement Agency SBA Smll Business Administrtion SURE Supplementl Revenue Assistnce Pyments Progrm TAP Tree Assistnce Progrm the 2008 frm bill Food, Conservtion, nd Energy Act of 2008 USDA U.S. Deprtment of Agriculture This is work of the U.S. government nd is not subject to copyright protection in the United Sttes. The published product my be reproduced nd distributed in its entirety without further permission from GAO. However, becuse this work my contin copyrighted imges or other mteril, permission from the copyright holder my be necessry if you wish to reproduce this mteril seprtely. Pge ii

5 United Sttes Government Accountbility Office Wshington, DC September 11, 2012 The Honorble Mry L. Lndrieu Chir Committee on Smll Business nd Entrepreneurship United Sttes Sente Der Mdm Chir: Frmers nd other griculturl producers re exposed to nturl dissters, such s droughts, floods, hurricnes, nd torndoes. Smll griculturl producers, which the U.S. Deprtment of Agriculture (USDA) describes s diverse group tht produces rnge of food nd fiber nd tht cn include fmily frms, commodity producers, quculture (such s frmed fish nd shellfish) producers, nursery producers (such s trees nd plnts), nd other frmers nd rnchers. These producers re prticulrly vulnerble to dissters becuse they tend to hve less control over their economic security thn lrger producers, nd nturl dissters cn excerbte this economic insecurity. In the ftermth of such nturl dissters, federl disster ssistnce progrms cn provide n importnt sfety net for these producers. However, fter pst nturl dissters, some smll griculturl producers, prticulrly quculture nd nursery producers, reported chllenges in obtining this ssistnce. For exmple, following the Gulf Cost hurricnes in 2005 nd 2006 nd other nturl dissters, some crwfish, oyster, nd ctfish producers whose opertions were severely dmged reported tht they did not hve the sfety net tht they expected. Both USDA, through its Frm Service Agency (FSA), nd the Smll Business Administrtion (SBA) re mjor sources of disster ssistnce, but there is little overlp in the popultions served by the FSA nd SBA progrms. Specificlly, FSA provides finncil ssistnce in the form of csh pyments nd reimbursements, s well s lons to help griculturl producers recover from dmges sustined in nturl dissters. It provides this ssistnce for producers who hve sustined crop nd livestock losses resulting from nturl dissters through five supplementl disster ssistnce progrms uthorized under Title XV of the 2008 frm Pge 1

6 bill, s well s three other progrms. 1 These progrms only cover losses incurred s result of disster tht occurred on or before September 30, 2011, but pyments re currently being mde for disster losses incurred from Jnury 1, 2008, through September 30, A new frm bill ws being debted s of August 2012, nd the finl bill my reuthorize some of these progrms nd my include retroctive ssistnce for dmges resulting from nturl dissters occurring fter September 30, In ddition, while SBA disster lons primrily serve nongriculturl entities, SBA lso hs uthority to nd does provide lons to help some smll griculturl producers nd businesses tht support griculture recover from dissters. However, fter pst nturl dissters, some stkeholders, including certin industry groups nd others, rised concerns tht some smll griculturl producers, including quculture nd nursery producers, hve been found ineligible for both gencies disster ssistnce progrms. In ddition, it is not cler whether FSA nd SBA re collborting effectively to ensure tht these producers re served. In this context, you sked us to exmine the disster ssistnce progrms vilble to smll griculturl producers. In this report, our objectives were to (1) exmine FSA nd SBA disster ssistnce progrms nd the coverge they provide smll producers; (2) identify the min fctors, if ny, tht my limit smll quculture nd nursery producers prticiption in disster ssistnce progrms from FSA nd SBA; nd (3) exmine FSA nd SBA efforts to collborte in providing disster ssistnce to smll quculture nd nursery producers. To ddress these objectives, we reviewed the 10 FSA nd SBA disster ssistnce progrms we identified for griculturl producers nd businesses tht support griculture tht become vilble following nturl disster nd tht provide direct finncil ssistnce in csh pyments, reimbursements, or lons to griculturl producers nd businesses tht support griculture tht hve experienced nturl dissters. We use the term griculturl producers to refer to fmily frms, commodity producers, quculture producers, nursery producers, nd other frmers nd rnchers. Businesses tht support griculture refers to businesses tht provide support ctivities for griculture tht do 1 Food, Conservtion, nd Energy Act of 2008, Pub. L. No , 15101, 122 Stt. 1651, Pge 2

7 not led to griculturl production. Exmples of support ctivities include such duties s cotton ginning, soil preprtion, plnting, nd breeding services for nimls. Our primry focus ws on smll griculturl producers s described by USDA. We included fmily frms nd other frmers nd rnchers whose size mkes them prticulrly vulnerble to nturl dissters nd in turn to economic insecurity. 2 We used vilble FSA- or SBA-estblished griculturl producer size criteri for progrm eligibility in our review. To determine the types of smll griculturl producers the 10 FSA nd SBA progrms cover, we reviewed gency documents, uthorizing sttutes, nd implementing regultions to obtin informtion bout ech progrm, including eligibility requirements, nd interviewed FSA nd SBA officils. When nlyzing whether ny gps in coverge exist, we nlyzed mjor ctegories of griculturl producers involved in the production of food nd fiber, including commodities such s whet, feed grins, cotton, rice, oilseeds, nd penuts; specilty crops such s fruits, vegetbles, tree nuts, nd nursery crops including floriculture; livestock; nd quculture. We believe tht this nlysis of mjor ctegories llowed us to resonbly identify where ny gps in coverge my be present. However, we recognize tht we my not hve detected dditionl gps in coverge tht my exist. We focused our second objective on the fctors limiting smll quculture nd nursery producers prticiption in these disster ssistnce progrms becuse quculture nd nursery producers re covered by t lest one of the disster ssistnce progrms offered by both FSA nd SBA. Other griculturl producers re not covered by the SBA progrms. To identify ny fctors limiting smll nursery nd quculture producers prticiption in these disster ssistnce progrms, we reviewed the eligibility criteri for the progrms tht pertin to them nd interviewed FSA nd SBA officils. We ssessed the gencies outrech policies nd prctices ginst our prior reports on reching progrm s intended recipients. 3 2 For individul borrowers, FSA s definition of fmily frm specifies tht the mjority of dy-to-dy, opertionl decisions nd ll strtegic mngement decisions be mde by the borrower or reltive, nd substntil mount of lbor to operte the frm be provided by the borrower or reltive. For corportions, prtnerships, or other entities, the mjority of dy-to-dy, opertionl decisions, nd ll strtegic mngement decisions must be mde, nd substntil mount of lbor to operte the frm be provided by the members responsible for operting the frm. 3 GAO, Designing Evlutions: 2012 Revision, GAO G (Wshington, D.C.: Jn. 31, 2012) nd GAO, Mnging for Results: Views on Ensuring the Usefulness of Agency Performnce Informtion to Congress, GAO/GGD (Wshington, D.C.: Jn. 26, 2000). Pge 3

8 We lso interviewed stte-level FSA officils nd industry representtives in seven selected sttes bout the min fctors tht my limit prticiption in disster ssistnce progrms from FSA nd SBA. We selected these sttes becuse the nursery nd quculture industries hve significnt presence in them. In selecting them, we lso considered the geogrphic distribution of the sttes to ensure tht vriety of plces experiencing different types of nturl dissters ws included. Becuse we selected nonprobbility smple of sttes, the informtion we collected from them cnnot be generlized to ll sttes; however, the informtion provides useful exmples of the fctors tht my limit prticiption in disster ssistnce progrms from FSA nd SBA in those sttes. The sttes we selected were Cliforni, Florid, Louisin, Michign, Mississippi, North Crolin, nd Wshington. To determine how FSA nd SBA collborte to provide disster ssistnce to smll nursery nd quculture producers, we reviewed FSA nd SBA documents nd interviewed ntionl- nd stte-level gency officils to obtin informtion bout the gencies policies nd prctices for collborting on disster ssistnce. We lso exmined the degree to which the gencies collbortive efforts reflected key prctices we previously identified tht cn help enhnce nd sustin collbortion mong federl gencies. 4 Appendix I provides more informtion on our objectives, scope, nd methodology. We conducted this performnce udit from September 2011 to September 2012 in ccordnce with generlly ccepted government uditing stndrds. Those stndrds require tht we pln nd perform the udit to obtin sufficient, pproprite evidence to provide resonble bsis for our findings nd conclusions bsed on our udit objectives. We believe tht the evidence obtined provides resonble bsis for our findings nd conclusions bsed on our udit objectives. Bckground Nturl dissters, such s droughts, floods, hurricnes, nd other dverse wether events, pose risks to griculturl producers. The federl government hs plyed n ctive role in mitigting those risks through vriety of disster ssistnce progrms. USDA provides bsic sfety net of permnently uthorized nd regulrly funded progrms to help griculturl producers recover finncilly from losses resulting from 4 GAO, Results-Oriented Government: Prctices Tht Cn Help Enhnce nd Sustin Collbortion mong Federl Agencies, GAO (Wshington, D.C.: Oct. 21, 2005). Pge 4

9 nturl dissters. Congress hs historiclly supplemented these ongoing progrms in n d hoc mnner by providing one-time pyments through disster ssistnce progrms tht compenste producers for dissterrelted crop nd livestock losses they sustined. The quculture nd nursery industries re two growing griculturl industries covered by federl disster ssistnce. Federl Crop Insurnce nd Noninsured Crop Disster Assistnce Progrms Provide Bsic Sfety Net for Agriculturl Producers The Federl Crop Insurnce Progrm nd the Noninsured Crop Disster Assistnce Progrm (NAP) offer griculturl producers protection ginst crop losses if they enroll in the progrms prior to experiencing loss. 5 Federl crop insurnce, dministered by USDA s Risk Mngement Agency (RMA), protects prticipting frmers ginst finncil losses becuse of production risks droughts, floods, nd other nturl dissters s well s other risks. Under the Federl Crop Insurnce Progrm, frmers cn choose vrious levels nd types of insurnce protection: they cn insure ginst losses cused by poor crop yields, declines in crop prices, or both, for ech insurble crop they produce. These crops include mjor crops such s corn, cotton, soybens, nd whet, which ccounted for three-qurters of the cres enrolled in the progrm in 2011 s well s nursery crops nd certin fruits nd vegetbles. RMA is lso conducting pilot quculture crop insurnce projects for clms nd oysters. For crops for which federl crop insurnce is not vilble, frmers cn obtin coverge through FSA s NAP, which provides csh pyments to producers when nturl dissters re responsible for low crop yields or loss of vlue or prevent plnting from occurring. NAP is limited by sttute to include crops for which the ctstrophic risk protection level of crop insurnce is not vilble nd tht re grown for food nd fiber, nd other crops such s floriculture, ornmentl nursery, Christms tree crops, turfgrss sod, nd quculture. Disster declrtions re required to trigger some federl disster ssistnce progrms. For griculturl disster ssistnce progrms, disster declrtions cn be mde by the President, the Secretry of 5 We previously reported on the costs of the federl crop insurnce progrm. See GAO, Crop Insurnce: Svings Would Result from Progrm Chnges nd Greter Use of Dt Mining, GAO (Wshington, D.C.: Mr. 13, 2012). Pge 5

10 Agriculture, or the SBA Administrtor. 6 The Robert T. Stfford Disster Relief nd Emergency Assistnce Act uthorizes the President to issue mjor disster or emergency declrtions in response to ctstrophes in the United Sttes tht overwhelm stte nd locl governments. Such declrtions result in the distribution of wide rnge of federl id to individuls nd fmilies, certin nonprofit orgniztions, nd public gencies (see pp. II). The Federl Emergency Mngement Agency (FEMA), in the Deprtment of Homelnd Security, is responsible for coordinting federl response nd recovery efforts under presidentil disster declrtions. FEMA works with other federl, stte, nd locl gencies to ssist individuls fter mjor dissters, nd volunteer orgniztions, such s the Americn Red Cross, lso prticipte in these efforts. 7 Following presidentil disster declrtion, FEMA will open disster recovery centers where individuls cn meet with representtives from federl gencies, including FSA nd SBA; obtin informtion bout the recovery process; nd register for federl disster ssistnce. Federl Disster Assistnce Progrms Tht Become Avilble to Agriculturl Producers nd Businesses Tht Support Agriculture Following Nturl Disster In ddition to crop insurnce nd NAP, which re purchsed before disster, FSA provides eight disster ssistnce progrms tht become vilble to producers fter nturl disster. Title XV of the Food, Conservtion, nd Energy Act of 2008 (the 2008 frm bill) estblished five disster ssistnce progrms tht provide ssistnce to griculturl producers who suffer crop nd livestock losses incurred s result of disster, dverse wether, or other environmentl condition tht occurred on or before September 30, Agriculturl producers my pply for this ssistnce following nturl disster. USDA s FSA dministers these progrms nd funds them through the Agriculturl Disster Relief 6 The President cn issue mjor disster or emergency declrtion in response to ctstrophe tht overwhelms stte nd locl governments. The Secretry of Agriculture cn mke determintion tht there hs been nturl disster. The SBA Administrtor cn declre disster becuse of vrious physicl dmges or economic injuries. 7 Presidentilly declred dissters require tht FEMA hve overll responsibility for coordinting federl ssistnce, but there re severl other types of disster declrtions, such s those mde by the Secretry of Agriculture or SBA, tht do not involve FEMA. Such declrtions insted mke vrious disster ssistnce from SBA, FSA, nd other stte nd locl uthorities vilble to producers. 8 We evluted pst d hoc disster ssistnce progrms to inform FSA s implementtion of the 2008 frm bill disster ssistnce progrms. See GAO, USDA Crop Disster Progrms: Lessons Lerned Cn Improve Implementtion of New Crop Assistnce Progrm, GAO (Wshington, D.C.: June 4, 2010). Pge 6

11 Trust Fund providing pproximtely $3.6 billion in ssistnce through the end of clendr yer 2011 to griculturl producers of ll sizes. 9 The five progrms re the following: The Supplementl Revenue Assistnce Pyments Progrm (SURE) provides csh ssistnce for griculturl producers with crop production losses or crop qulity losses. The Tree Assistnce Progrm (TAP) provides prtil cost reimbursements to orchrd nd nursery producers for replnting or rehbilitting lost or dmged trees, bushes, or vines. The Livestock Indemnity Progrm provides csh ssistnce to producers for livestock deths. The Livestock Forge Disster Progrm provides csh ssistnce to livestock producers when their livestock re prevented from grzing due to drought or fire on federlly mnged lnd. The Emergency Assistnce for Livestock, Honeybees, nd Frmrised Fish Progrm (ELAP) provides csh ssistnce to eligible producers who hve losses tht re not covered under the other 2008 frm bill progrms due to dverse wether nd disese, mong other things. FSA lso dministers three other disster ssistnce progrms tht producers cn pply for following disster. These progrms re generlly funded through nnul ppropritions nd re s follows: The Emergency Forest Restortion Progrm, which lso ws creted in the 2008 frm bill, provides pyments to eligible owners of nonindustril privte forestlnd to crry out emergency mesures to restore lnd dmged by nturl disster. This progrm ws implemented in 2010 to cover dissters strting in Jnury It hs provided $2 million from fiscl yers 2010 through The Emergency Conservtion Progrm provides funding nd technicl ssistnce for frmers nd rnchers who crry out emergency mesures to rehbilitte frmlnd dmged by nturl dissters nd for crrying out emergency wter conservtion mesures in periods of severe drought. This progrm provided $345 million from fiscl yers 2008 through Funds re pproprited to the Agriculturl Disster Relief Trust Fund from the generl fund of the Tresury bsed on griculturl trde duties. Pge 7

12 The Emergency Lon Progrm helps griculturl producers recover from production nd physicl losses. Unlike FSA s other disster ssistnce progrms, the Emergency Lon Progrm is vilble only to smll griculturl producers, which USDA clssifies s fmily-sized frms. FSA obligted $32 million for the Emergency Lon Progrm in fiscl yer By lw, SBA is prohibited from providing disster lons to most griculturl producers. However, SBA hs two lon progrms tht re relevnt to griculture nd provided 103 lons totling bout $15 million in disster lons to eligible smll quculture producers, nursery producers ffected by drought, nd businesses tht support griculture tht reported losses to SBA from October 2007 through the end of The two progrms re the following: The Economic Injury Disster Lon Progrm provides working cpitl lons for disster-relted needs to meet finncil obligtions tht could hve been met hd the disster not occurred. Smll businesses or privte nonprofit orgniztions re eligible for these lons if they hve suffered substntil economic injury i.e., the business cnnot meet its obligtions or py necessry operting expenses s direct result of declred disster. Aquculture producers nd nursery producers ffected by drought my qulify for these lons. The Business Physicl Disster Lon Progrm provides lons for business to repir, rehbilitte, or replce dmged property, including rel estte, equipment, inventory, nd fixtures. Any business, other thn n griculturl enterprise, or privte, nonprofit orgniztion (lrge or smll) locted in declred disster re tht hs incurred dmge during the disster my pply for these lons, including businesses tht support griculture. Chrcteristics of Aquculture nd Nursery Industries The 10 USDA nd SBA disster ssistnce progrms hve slightly different definitions for quculture. USDA defines quculture s the production nd rering of qutic species under controlled or selected environments. SBA uses definition from the U.S. Deprtment of Commerce s Ntionl Ocenic nd Atmospheric Administrtion, which defines quculture s the propgtion nd rering of qutic orgnisms in controlled or selected qutic environments for ny commercil, 10 SBA provided nother 199 lons totling $7.7 billion to nonfrm fishing, hunting nd trpping businesses over tht sme time period. Pge 8

13 recretionl or public purpose. A 2012 Congressionl Reserch Service report stted tht, until recently nd with few exceptions, U.S. quculture hs been considered minor industry. 11 USDA s 2005 Census of Aquculture reported tht U.S. sles of quculture products were pproximtely $1.1 billion. Aquculture crops include fish for humn consumption, such s ctfish, slmon, nd trout; crustcens such s crwfish; mollusks such s oysters nd clms; nd ornmentl fish nd bitfish. Fish for humn consumption nd bitfish re normlly grown in freshwter. Crwfish re grown in freshwter, nd frm-rised oysters nd clms re grown in costl res of the United Sttes. Nursery producers grow vriety of trees nd plnts, such s ok trees, shrubs, nd potted plnts, with some producers growing hundreds of vrieties. USDA hs reported tht, since the 1970s, the greenhouse nd nursery industry hd been growing more rpidly thn ll other griculturl commodities, in terms of csh receipts. Csh receipts for the top five greenhouse nd nursery producing sttes were nerly $10 billion in Disster Assistnce Progrms Leve Few Gps in Coverge for Smll Agriculturl Producers The 10 FSA nd SBA disster ssistnce progrms we identified tht smll griculturl producers nd businesses tht support griculture cn use to recover from nturl dissters provide ssistnce tht cn cover most losses. FSA provides csh ssistnce to griculturl producers, including smll producers, for crop nd livestock losses nd dmges to lnd. FSA lso provides disster lons to these producers to cover production losses, while SBA provides disster lons to cover physicl dmges nd economic injury losses to businesses tht support griculture nd economic injury to limited quculture sector nd for nurseries only when drought is declred. Together, the FSA nd SBA disster ssistnce progrms re frgmented, but they leve few gps in the ssistnce vilble to most smll griculturl producers in the wke of nturl disster. 12 Tble 1 lists the 10 csh ssistnce nd lon progrms we identified nd the types of losses they cover. 11 Congressionl Reserch Service, Fishery, Aquculture, nd Mrine Mmml Issues in the 112th Congress (Wshington, D.C.: My 9, 2012). 12 Frgmenttion refers to those circumstnces in which more thn one federl gency (or more thn one orgniztion within n gency) is involved in the sme brod re of ntionl interest. For more informtion, see GAO, 2012 Annul Report: Opportunities to Reduce Dupliction, Overlp nd Frgmenttion, Achieve Svings, nd Enhnce Revenue. GAO SP (Wshington, D.C.: Feb. 28, 2012). Pge 9

14 Tble 1: 10 FSA nd SBA Disster Assistnce Progrms nd Types of Losses Covered Progrm Crops Livestock Lnd Other FSA Supplementl Revenue Assistnce Pyments Progrm (SURE) FSA Tree Assistnce Progrm (TAP) X FSA Livestock Indemnity Progrm b FSA Livestock Forge Disster Progrm X FSA Emergency Assistnce for Livestock, Honeybees, nd Frm-rised Fish Progrm (ELAP) FSA Emergency Forest Restortion Progrm FSA Emergency Conservtion Progrm FSA Emergency Lon Progrm SBA Economic Injury Disster Lon Progrm SBA Business Physicl Disster Lon Progrm Sources: GAO review of federl disster ssistnce progrm informtion provided by FSA nd SBA. FSA s Tree Assistnce Progrm does not cover crop production losses but provides prtil cost reimbursements to replnt or rehbilitte trees, bushes, nd vines. b This refers to the loss of grzing lnd for livestock. c For the purposes of this tble, we define crops to include honeybees nd frm-rised fish. X X c X X X X X X X FSA Provides Csh Assistnce for Crop nd Livestock Losses nd Dmges to Lnd Agriculturl producers, including smll producers, such s fmily frms, cn pply for csh ssistnce under seven FSA progrms tht provide csh pyments nd reimbursements for losses resulting from nturl dissters to wide vriety of crops nd livestock, s well s dmges to frmlnd nd forests (tble 2). Qulifying nturl dissters generlly include dverse wether events such s droughts, floods, hurricnes, nd blizzrds; however, ech progrm specifies the types of dissters tht it covers. Five of the seven progrms (1) SURE, (2) TAP, (3) the Livestock Indemnity Progrm, (4) the Livestock Forge Disster Progrm, nd (5) ELAP were uthorized by Title XV of the 2008 frm bill nd cover losses nd dmges resulting from nturl dissters tht occurred from Jnury 1, 2008, through September 30, They hve severl common eligibility requirements. For exmple, producers must hve purchsed crop insurnce or enrolled in NAP prior to incurring dmges or, for crop yers 2008 nd 2009, must obtin wiver from those requirements from USDA to receive benefits under SURE, ELAP, nd TAP. However, limited resource (i.e., hving limited gross frm sles or 13 The SURE progrm covers losses beginning with the 2008 crop yer. A crop yer is determined by USDA bsed on when the crop is normlly hrvested. Pge 10

15 household income), socilly disdvntged (i.e., belonging to rcil or ethnic group subject to rcil or ethnic prejudice), nd beginning frmers nd rnchers (i.e., not hving operted frm or rnch for more thn 10 consecutive yers) my be exempted from this requirement. The other two progrms the Emergency Forest Restortion Progrm nd the Emergency Conservtion Progrm re uthorized in seprte legisltion nd cover losses on n ongoing bsis from funds generlly mde vilble through the ppropritions process. Tble 2: FSA Csh Assistnce Progrms Progrm Description Covered losses SURE Csh pyments for griculturl producers with qulifying crop production losses or crop qulity losses. Crops nd some quculture TAP Livestock Indemnity Progrm Livestock Forge Disster Progrm ELAP Emergency Forest Restortion Progrm Emergency Conservtion Progrm Prtil reimbursement for qulifying orchrdists nd nursery producers to replnt or rehbilitte eligible trees, bushes, nd vines. Csh ssistnce for livestock deths in excess of norml mortlity due to dverse wether. Csh ssistnce for livestock grzing losses cused by qulifying drought conditions or fire on federl lnd used for grzing. Csh ssistnce for livestock feed nd grzing losses nd deths; honeybee colony, hive nd feed losses; nd frmrised fish deths nd feed losses tht re not covered by other frm bill disster ssistnce progrms. Prtil reimbursement for owners of nonindustril privte forest lnd in order to crry out emergency mesures to restore dmged lnd. Prtil reimbursement for griculturl producers to rehbilitte frmlnd tht hs been severely dmged. Orchrds nd nurseries Livestock, including some quculture, nd honeybees Lnd Sources: GAO review of federl disster ssistnce progrm informtion provided by FSA. These progrms, uthorized under the 2008 frm bill, cover only losses incurred s result of dissters tht occurred on or before September 30, Pyments re currently being mde for disster losses tht occurred from Jnury 1, 2008, through September 30, Pge 11

16 Crop Losses Two progrms cover crop losses: SURE covers crops for which federl crop insurnce or NAP is vilble, including corn nd other commodities, fresh produce, orgnic crops, pples nd other fruit, nd nursery products. Losses to ctfish, crwfish, nd other quculture species re lso covered under SURE; however, livestock losses re not covered. Agriculturl producers who hve suffered 10 percent crop loss on t lest one crop of economic significnce on their frm re eligible if they re locted in declred disster county or county djcent to disster county. 14 In ddition, producers who hve lost 50 percent or more of the norml production on their frms from nturl disster my lso qulify for SURE, even if they re not locted in declred disster county or contiguous county. Reductions in crop quntity nd qulity due to nturl dissters re counted s losses nd, in some cses, losses tht occur becuse nturl disster prevented producer from plnting crop re lso counted. The mount of the SURE pyment is percentge of the difference between the SURE gurntee nd the totl frm revenue for the producer s entire frm, not the vlue of lost crops. The SURE gurntee is clculted bsed on the level of crop insurnce or NAP coverge the producer hs nd historic production or vlue of lost crops. In generl, the more insurnce purchsed, the higher the SURE pyment. TAP is cost-reimbursement progrm tht provides cost-shre pyments to orchrd nd nursery producers for replnting or rehbilitting lost or dmged trees, bushes, or vines for commercil purposes. Nursery trees tht re produced for commercil sle, including ornmentl trees, fruit nd nut trees, nd Christms trees, re lso covered. Trees used for pulp or timber re not covered. To receive benefits, producer must hve sustined loss in excess of 15 percent of the trees, bushes, or vines in n individul stnd contiguous crege of the sme type of plnt fter djusting for norml mortlity or dmge. TAP reimburses producers for 70 percent of the cost of replnting trees, bushes, nd vines, nd 50 percent of the costs to remove, prune, or other costs to slvge dmged trees, bushes, nd vines, or to prepre the lnd to plnt new ones. 14 Crop of economic significnce mens ny crop tht contributed, or is expected to contribute, 5 percent or more of the totl expected vlue of ll crops grown by the producer. Pge 12

17 Livestock nd Livestock- Relted Losses The following three progrms cover livestock nd livestock-relted losses: The Livestock Indemnity Progrm provides csh ssistnce to livestock producers for the deths of wide vriety of livestock tht re produced or mintined for commercil use, rnging from cttle, poultry, nd swine to lpcs nd reindeer, mong others. Producers who rise poultry nd swine under contrcts cn lso receive ssistnce. Deths must be in excess of norml mortlity for the niml nd hve been cused by dverse wether, including extreme het or cold nd other wether events. Deths resulting from drought re not covered. 15 Producers re pid 75 percent of the fir mrket vlue of the livestock. The Livestock Indemnity Progrm does not cover quculture. The Livestock Forge Disster Progrm provides csh ssistnce to livestock producers when their livestock re prevented from grzing becuse the lnd or psture they normlly grze on hs been ffected by drought. To be eligible, producers lnd must be physiclly locted in county ffected by qulifying drought during the norml grzing period, s determined by the U.S. Drought Monitor, joint federl-cdemic system for clssifying drought severity ccording to rnge of bnormlly dry to exceptionl drought, produced on weekly bsis. Pyment for drought-relted grzing losses is bsed on the severity of the drought nd the cost of feed. In ddition, the Livestock Forge Disster Progrm provides csh ssistnce to producers who hve been prevented from grzing on federlly mnged rngelnd becuse of fire when they normlly would hve been permitted to. Pyment for fire-relted grzing losses is clculted by multiplying 50 percent of the monthly feed cost by the number of dys the producer is prohibited from grzing, for up to 180 dys. ELAP provides csh ssistnce to eligible producers who hve losses from disese, dverse wether, or other conditions tht re not covered under SURE, the Livestock Indemnity Progrm, or the Livestock Forge Disster Progrm. FSA officils told us it is ctchll progrm ment to fill gps left by the other progrms. For exmple, ELAP hs covered livestock losses from wolf ttcks. According to the officils, livestock being killed by gry wolves tht 15 Becuse feed cn be purchsed or otherwise obtined in the event of drought, drought is not n eligible dverse wether event except when nthrx, resulting from drought, cuses the deth of eligible livestock. Pge 13

18 were recently reintroduced into the western United Sttes is firly common, nd producers cnnot hunt the wolves becuse they re protected species. In ddition, honeybee producers re eligible for ELAP if they hve colony or hive losses from dverse wether or other eligible loss conditions, including colony collpse disorder, n unexplined phenomenon in which, other thn live queen, there re no other or low number of dult honeybees present in hive. ELAP lso covers frm-rised fish feed losses nd deth losses of eligible frm-rised gme or sport fish for quculture producers nd livestock feed nd grzing losses tht result from nturl dissters other thn drought or fires on federlly mnged lnds. Depending on the type of loss, pyment mounts re clculted bsed on 75, 60, or 50 percent of the vlue of the loss. However, the frm bill limits the mount of ssistnce tht cn be pproved ech yer under the progrm to $50,000,000. FSA my prorte pyment mounts to reduce the totl expected pid out. Dmges to Lnd Two progrms cover dmges nd losses to lnd. FSA hs set ntionl minimum qulifying restortion cost of $1,000 for these progrms, lthough FSA stte-level offices re uthorized to set higher minimum. However, ccording to FSA officils, the ntionl qulifying minimum cost of restortion for Emergency Conservtion Progrm prticipnts who clim limited resource sttus is $250. These two progrms re s follows: The Emergency Forest Restortion Progrm is cost-reimbursement progrm tht provides pyments to owners of nonindustril privte forestlnd tht hs been dmged by nturl disster. The lnd must hve, or hd, tree cover immeditely before the nturl disster nd the dmges, if not ddressed, must be expected to impir or endnger the nturl resources on the lnd nd mterilly ffect its future use. The progrm is not limited to griculturl producers, but FSA officils told us tht mny of them prticipte in it. For exmple, producers hve used it to remove frm equipment nd debris tht nturl disster blew off their frmlnd into their djcent forestlnd. The Emergency Forest Restortion Progrm covers up to 75 percent of the qulifying cost to implement FSA-pproved prctices to repir dmge to nturl resources nd restore forest helth nd forestrelted resources on the lnd. The Emergency Conservtion Progrm generlly reimburses griculturl producers for up to 75 percent of the cost to rehbilitte frmlnd tht hs been severely dmged by nturl disster. Qulified limited resource producers my receive up to 90 percent. Lnd must be expected to hve nnul griculturl production, be Pge 14

19 used s windbrek or shelterbelt, or frm ccess rod. This includes grzing lnd for commercil livestock production, lnd used for producing griculturl commodities, nd privtely owned lnd used for commercil quculture; however, certin types of lnd, including stte-owned costl wters tht quculture producers lese, do not qulify. The Emergency Conservtion Progrm lso covers commercil orchrds, lnd used for continer-grown nursery stock, nd Christms tree frms but does not cover lnd used for timber production. Lnd tht is subject to frequent dmge or susceptible to severe dmge is lso excluded. FSA nd SBA Disster Lons Cover Production Losses, Physicl Dmges, nd Economic Losses FSA provides disster lons to smll griculturl producers tht hve experienced production losses or physicl losses, while SBA provides lons for smll businesses, smll griculturl coopertives, nd privte nonprofit orgniztions tht hve suffered substntil economic injury (tble 3). Officils from both gencies told us tht griculturl producers generlly pply for disster lons only when crop insurnce or csh ssistnce is insufficient or unvilble to cover their losses becuse, unlike lon, these other sources of disster ssistnce do not hve to be repid. Nonetheless, officils sid tht the lons re n importnt source of ssistnce for those producers who need them. As of July 11, 2012, USDA nnounced tht the interest rte for FSA s Emergency Lon, which is set by the Secretry of Agriculture, would decrese from 3.75 percent to 2.25 percent, which the gency sys will mke the rtes more comprble to other rtes in the mrket. Interest rtes for SBA s lons re set when the disster declrtion is mde but re cpped t 4 percent unless SBA determines tht the pplicnt cn obtin lon from commercil bnk. To prevent dupliction of benefits, the FSA nd SBA lon progrms require tht disster ssistnce funds received from other sources be deducted from the mount of n pplicnt s qulified lon mount. Pge 15

20 Tble 3: FSA nd SBA Disster Lon Progrms Progrm Provisions Covered losses FSA s Emergency Lon Progrm SBA s Economic Injury Disster Lon Progrm SBA s Physicl Disster Lon Progrm Provides up to $500,000 to help griculturl producers recover from production nd physicl losses from drought, flooding, other nturl dissters, or qurntine. Provides up to $2 million in working cpitl for dissterrelted needs until the business recovers. Provides up to $2 million for business to repir, rehbilitte, or replce dmged property, including rel estte, equipment, inventory, nd fixtures. Crops, livestock, equipment, nd other frm property Working cpitl for smll businesses, including smll quculture enterprises, smll nurseries ffected by drought disster declrtion, smll griculturl coopertives, nd businesses tht support griculture Businesses tht support griculture nd nongriculturl components of griculturl businesses (e.g., processing fcility) Sources: GAO review of federl disster lon progrm informtion provided by FSA nd SBA. The ggregte lon limit for economic injury nd physicl disster lons cnnot exceed the lesser of the uncompensted economic injury nd physicl loss or $2 million. The SBA Administrtor my increse the $2 million lon limit bsed on pproprite economic indictors for region. FSA nd SBA disster lons re bckup option for smll griculturl producers nd businesses tht do not qulify for commercil lons. However, pplicnts must still demonstrte tht they will be ble to repy the lons nd, with some exceptions, they must provide collterl. In ddition, ech of the lon progrms hs dditionl eligibility requirements. To qulify for n FSA Emergency Lon, quculture nd nursery producers must meet the fmily frm size criteri. In ddition, the producer must hve suffered t lest 30 percent loss in crop production, or ny mount of physicl loss to rel estte or frm property, such s equipment or livestock. The frm or rnch must be locted in declred disster county or qulifying nerby county. Smll quculture nd nursery producers re eligible for FSA Emergency Lons, provided tht they meet the generl progrm requirements. Smll quculture nd nursery producers re lso eligible for SBA s Economic Injury Disster Lons; however, other types of griculturl producers re not. Under SBA operting procedures, smll quculture producers whose businesses cn be clssified s quculture enterprises Pge 16

21 within the North Americn Industry Clssifiction System codes nd meet the generl lon requirements re eligible for Economic Injury Disster Lons. The North Americn Industry Clssifiction System is the stndrd used by Federl sttisticl gencies in clssifying business estblishments for the purpose of collecting, nlyzing, nd publishing sttisticl dt relted to the U.S. business economy. However, smll nursery producers re only eligible when they re ffected by drought dissters designted by the Secretry of Agriculture. Smll griculturl coopertives nd businesses tht support griculture, such s plnting nd niml breeding services, re lso eligible for Economic Injury Disster Lons. SBA s Physicl Disster Lons re not vilble to griculturl producers, including quculture nd, ccording to SBA officils, nurseries tht derive t lest hlf of their nnul income from producing nd selling nursery products. However, if n griculturl producer lso hs seprte component to the business, such s processing fcility, the seprte business my be eligible for ssistnce. Gps in Disster Assistnce Coverge Are Few There re few gps in the disster ssistnce vilble to most smll griculturl producers fter nturl disster occurs, ccording to our review of FSA nd SBA disster ssistnce progrms. The gencies csh ssistnce nd lon progrms supplement the ssistnce provided through the Federl Crop Insurnce Progrm nd NAP. In other cses, exclusions or limittions specified in one disster ssistnce progrm my be covered in nother disster ssistnce progrm. For exmple, crwfish, ctfish, or mny other quculture losses re covered by SURE but not other FSA disster ssistnce progrms becuse, s previously noted, these progrms specify tht benefits cnnot be duplicted. Similrly, exclusions nd limittions tht rise in some of the other FSA disster ssistnce progrms re often covered by nother disster ssistnce progrm. For exmple, griculturl producers whose frms re lrger thn fmily frms re not eligible for FSA s Emergency Lons but my still be ble to obtin ssistnce under one of FSA s csh ssistnce progrms, which do not hve similr size requirements. FSA nd SBA disster ssistnce progrms for griculturl producers do not cover ll disster scenrios, however. FSA officils stted tht FSA s disster ssistnce progrms generlly only cover losses resulting from nturl dissters. For exmple, ccording to FSA officils, FSA progrms generlly will not cover plnt nd niml diseses nd insect infesttions unless they were directly cused or excerbted by nturl disster. Officils told us tht dissters resulting from humn error or negligence, such s n oil spill or some wildfires, re lso not covered by FSA, Pge 17

22 lthough SBA s disster lons my cover some of these losses. In ddition, FSA s disster ssistnce progrms do not cover economic losses cused by decrese in demnd for product, even if the low demnd is linked to nturl disster. Likewise, ccording to SBA officils, SBA s disster ssistnce progrms do not cover such losses if the decrese in demnd is both temporry nd the result of declred disster. However, SBA officils sid tht if drought decreses demnd for nursery producer s stock becuse consumers do not wnt to purchse plnts when wter is scrce, the lost working cpitl necessry to py recurring expenses tht the business could hve generted hd the disster not occurred is n eligible loss. Furthermore, severl of FSA s disster ssistnce progrms require tht griculturl producers experience minimum level of losses nd, ccording to FSA officils, prctice stndrd frm mngement prctices to qulify for ssistnce. For exmple, the Livestock Indemnity Progrm does not cover poultry deths when dverse wether cuses equipment, such s cooling fns for poultry houses, to fil, nd the producer did not follow certin mngement prctices, such s hving bckup electricl genertors in plce. However, both FSA nd SBA hve other lon progrms tht griculturl producers cn use when they do not qulify for disster ssistnce nd wnt to restore their opertions. Producers cn use FSA s Operting Lons to cover frm operting expenses, including frm supplies such s seeds nd equipment, to mke repirs, nd to mke essentil purchses such s livestock nd feed. SBA s 7() Lon Gurnty Progrm is vilble to smll griculturl producers to purchse lnd, inventory, nd supplies, nd provide working cpitl, mong other things. 16 FSA progrms prohibit pyment dupliction, preventing producers from receiving multiple pyments for the sme or similr losses. However, these nondupliction cluses do not prevent producers from enrolling in multiple progrms to cover their losses. According to FSA officils, in the event of mjor dissters, such s hurricnes nd torndoes, producers my obtin ssistnce through more thn one of the eight FSA progrms to ddress ll of their dmges (see tbles 1 through 3 for informtion on progrm purposes nd covered losses). 16 SBA s 7() lon progrm gurntees lons mde by commercil lenders mostly bnks to smll businesses for working cpitl nd other generl business purposes. Pge 18

23 Awreness nd Eligibility Issues Limit Smll Aquculture nd Nursery Producers Prticiption in Disster Assistnce Progrms Three min fctors my limit smll quculture nd nursery producers prticiption in the 6 of the 10 disster ssistnce progrms for which they could be eligible. First, mny producers did not pply for the ssistnce becuse they were not wre of these progrms. Second, some producers did not pply for it becuse they sought relief through other options, such s other federl grnts nd privte lons. Third, some producers pplied but did not qulify becuse they did not meet certin progrm requirements. Tble 4 shows the six disster ssistnce progrms four csh ssistnce nd two lon progrms tht smll quculture nd nursery producers could pply for. Tble 4: Disster Assistnce Progrms Tht Cover Aquculture nd Nursery Losses Progrm Aquculture Nursery FSA SURE X X FSA TAP X FSA ELAP X FSA Emergency Conservtion Progrm X X FSA Emergency Lon Progrm X X SBA Economic Injury Disster Lon Progrm X X Sources: GAO review of disster ssistnce progrms. Smll Producers Do Not Apply Primrily Becuse They Are Not Awre Tht Assistnce Is Avilble Mny smll quculture producers nd some smll nursery producers did not pply for disster ssistnce becuse they were not wre of FSA s or SBA s progrms, ccording to quculture nd nursery industry representtives nd FSA nd SBA officils we interviewed. According to most stte-level quculture industry representtives nd, to lesser extent, nursery industry representtives, quculture nd nursery producers in their sttes were generlly not wre of FSA s or SBA s disster ssistnce progrms or tht they could be eligible for finncil ssistnce through these progrms. For exmple, representtive of stte-level quculture ssocition sid its members were either not wre they could be eligible for, or were misinformed bout, FSA disster ssistnce progrms nd did not use SBA progrms. Severl FSA nd SBA officils told us tht both smll quculture nd nursery producers fll outside of their usul customer bses nd my not be wre of their disster ssistnce progrms. In generl, these producers do not hve pst or current reltionship with FSA or SBA. However, in two sttes where quculture producers lso grow other crops nd prticipte in other FSA progrms, FSA officils sid these producers were more likely Pge 19

24 to become wre of FSA s disster ssistnce progrms. For exmple, FSA officils in one lrge quculture stte told us tht some of the stte s smll quculture producers re wre of FSA becuse they grow other crops covered by FSA s griculture support progrms. In ddition, ctfish producer we spoke with hd worked with FSA on other issues nd ws fmilir with FSA disster ssistnce progrms but ws not wre of SBA Economic Injury Disster Lons. In contrst, representtive of stte nursery industry ssocition sid tht he hd not considered going to FSA for nursery-relted mtters, despite hving experience working with FSA on mtters ffecting other types of griculturl producers. He lso sid tht nursery producers in his stte my not be wre of disster ssistnce progrms nd do not identify themselves s griculturl producers, so do not think of FSA s resource when disster occurs. Prticiption mong smll quculture nd nursery producers ws low in certin FSA disster ssistnce progrms, ccording to FSA officils, nd few quculture producers pplied for SBA s Economic Injury Disster Lon Progrm, ccording to SBA officils. For exmple, FSA officils we interviewed in one stte with quculture nd nursery frms numbering in the top 10 compred with other sttes, s of 2009 nd 2007, respectively, reported receiving only 1 quculture nd 3 nursery pplictions out of totl of nerly 2,500 pplictions for SURE between Jnury 2011 nd June In ddition, they reported receiving only 2 quculture nd 2 nursery pplictions out of totl of nerly 2,750 for Emergency Conservtion Progrm ssistnce during FSA ntionl-level lon officils lso sid tht they received few pplictions for Emergency Lons from quculture nd nursery producers. For exmple, FSA officils from stte with lrge quculture nd nursery industries reported tht they did not receive ny Emergency Lon pplictions from quculture producers nd only 7 pplictions from nursery producers in fiscl yers 2010 through Similrly, SBA officils told us, s of July 2012, they hd received only 3 Economic Injury Disster Lon pplictions from quculture producers since the Smll Business Jobs Act of 2010 extended eligibility to quculture producers. We hve reported tht reching progrm s intended recipients is n importnt mesure of progrm performnce. 17 Outrech is one pproch 17 GAO, Designing Evlutions: 2012 Revision, GAO G (Wshington, D.C.: Jn. 31, 2012) nd GAO, Mnging for Results: Views on Ensuring the Usefulness of Agency Performnce Informtion to Congress, GAO/GGD (Wshington, D.C.: Jn. 26, 2000). Pge 20

25 to incresing wreness of federl progrms mong intended recipients. Both FSA nd SBA conduct outrech relted to their disster ssistnce progrms, but their methods do not help to ensure tht smll quculture nd nursery producers re wre of their potentil eligibility for the progrms. Therefore, quculture nd nursery producers my be missing opportunities to receive ssistnce tht could help them mintin vible business fter experiencing nturl disster. Specificlly, FSA s outrech ctivities include notifying locl medi outlets; minority, civic, nd business orgniztions; nd FSA s existing customers bout FSA s disster ssistnce progrms. In ddition, FSA ntionl-level officils told us tht the public my sign up for disster ssistnce e-mil updtes on the FSA website. However, FSA ntionl-level officils told us FSA s outrech pproch does not directly trget quculture nd nursery industry orgniztions. In ddition, quculture nd nursery producers re often not in FSA s customer dtbse, so they would not receive FSA newsletters tht contin informtion bout disster ssistnce. For exmple, FSA officils in stte with lrge nursery industry sid tht they do not conduct outrech to the nursery industry, lthough they rech out to other griculturl producers. Therefore, quculture nd nursery producers my not see ll informtion FSA releses. In ddition, those who receive disster ssistnce informtion my not relize they could be eligible for ssistnce from FSA becuse some do not identify s prt of the griculture industry. Similrly, SBA provides informtion to disster victims; current SBA customers; medi outlets; Smll Business Development Centers; Chmbers of Commerce; nd federl, stte, nd locl officils bout SBA disster lons. SBA ntionl-level officils told us they hve not contcted smll quculture or nursery producers or their industry representtives directly bout SBA disster lons. While SBA developed postdisster procedures tht include contcting quculture industry ssocitions, officils told us tht, s of July 2012, they hd not contcted ny quculture industry ssocitions. They told us there hs been little disster ctivity ffecting quculture producers since they becme eligible for SBA Economic Injury Disster Lons, but tht they would follow these procedures for future disster declrtions. As result, quculture nd nursery producers my not be wre they could be eligible for SBA disster ssistnce. FSA nd SBA hve indicted willingness to help quculture nd nursery producers seek disster ssistnce when sked. Severl representtives of stte-level quculture nd two nursery industry ssocitions sid they hve requested nd received help from FSA field Pge 21

26 offices on numerous occsions bout disster ssistnce eligibility nd pyment issues. Of these, most noted they hve good reltionship with the gency. For exmple, one stte s quculture ssocition representtive noticed tht his producers were not wre they could be eligible for, or were misinformed bout, FSA disster ssistnce. He requested FSA s help in educting producers bout disster ssistnce. As result, FSA my prticipte in the industry s nnul conference to increse producers fmilirity with FSA services. Similrly, SBA ntionllevel officils told us they were interested in helping quculture producers obtin ccess to SBA s Economic Injury Disster Lons nd hve tken steps to bring these producers to SBA. For exmple, SBA s disster lon nnouncements specify tht quculture producers re eligible for their Economic Injury Disster Lon Progrm. Some Producers Do Not Apply for Disster Assistnce Becuse They Hve Other Options Some smll quculture nd nursery producers my not pply for FSA or SBA disster ssistnce progrms for which they could be eligible becuse they hve other options for ssistnce, including other federl grnt progrms nd other federl or privte lons, ccording to FSA officils nd industry representtives. FSA ntionl-level officils told us tht one reson they hd received few pplictions for ELAP from quculture producers to cover disster-relted feed losses ws becuse mny quculture producers hd received ssistnce for historiclly high feed costs through FSA s Aquculture Grnt Progrm, which ws ctive in 2008 nd Aquculture producers who receive 2008 or 2009 Aquculture Grnt Progrm pyments re not eligible for quculture feed losses under ELAP for the sme species for which the grnt benefits were received becuse producers cnnot receive duplicte pyments for the sme loss under multiple progrms. FSA officils lso noted tht SURE covers physicl losses for the mjority of quculture species, while ELAP only covers physicl losses of gme fish nd bitfish. Therefore, FSA received few ELAP pplictions from quculture producers. In ddition, some smll nursery producers in prticulr do not pply for FSA Emergency Lons or SBA Economic Injury Disster Lons becuse they pply for other lons or prefer not to tke out lon, ccording to most lon officils nd severl nursery representtives. For exmple, some FSA officils sid tht some smll nursery producers choose to pply for FSA Operting Lons rther thn Emergency Lons. According to FSA ntionl-level officils, Operting Lons my be more ttrctive to these producers becuse their interest rtes re currently lower thn Emergency Lons, nd they do not require pplicnts to document disster losses. The Operting Lon interest rte hs been below the Emergency Lon interest rte since November Pge 22

27 percent s of July 2012 nd 3.75 percent since Jnury 1994, respectively. However, s previously noted, USDA nnounced in July 2012 tht the Emergency Lon rte would be reduced to 2.25 percent. The Operting Lon rte is tied to the government s cost of borrowing, nd FSA officils told us it is historiclly low becuse of the economic downturn. However, FSA officils noted tht Emergency Lons remin n importnt option for some producers who hve exhusted their Operting Lon sttutory term limits by receiving n Operting Lon in 7 different yers or hve reched the sttutory lon size limit of $300,000 nd need dditionl funds. SBA officils sid tht some quculture producers disster losses my be covered sufficiently by insurnce or they my seek out grnts rther thn lons. In ddition, two nursery industry representtives sid tht smll nursery producers ffected by dissters my tke out privte lons becuse they re fmilir with their locl bnks. Another nursery industry representtive sid tht other smll nursery producers do not tke out ny lons becuse they do not wnt to tke on more debt. Some Smll Producers Do Not Meet Certin Requirements for Disster Assistnce Some smll quculture nd nursery producers did not receive disster ssistnce from FSA or SBA primrily becuse (1) their losses were less thn the required minimums, (2) they did not meet the crop insurnce or NAP coverge requirement, or (3) they did not meet lon eligibility requirements. First, three progrms vilble to quculture nd nursery producers SURE, TAP, nd the Emergency Lon Progrm set minimum loss requirements s condition of receiving ssistnce. As result, some smll quculture nd nursery producers did not experience the required levels of losses. Severl FSA officils told us this ws primrily becuse they tend to hve more control over their operting conditions reltive to other types of griculturl producers, which tends to limit dmge from disster. For exmple, FSA officils in stte with lrge quculture industry told us tht ctfish ponds tend to experience little dmge from flooding. In ddition, FSA officils in nother stte denied five of six SURE pplictions from nursery nd quculture producers lst yer becuse controlled operting conditions limited disster losses. Therefore, these pplicnts did not meet the SURE requirement tht they experience t lest 10 percent crop loss on t lest one crop of economic significnce on their frm if they were locted in declred disster county or county djcent to disster county or, t lest 50 percent loss of the norml production on their frms from nturl disster if they were not locted in declred disster county or contiguous county. Similrly, FSA ntionl-level officils told us tht smll nursery producers often do not qulify for TAP becuse their trees or Pge 23

28 plnts were dmged but not destroyed in disster. Only trees tht re destroyed or dmged such tht it would be more cost-effective to replce them re considered in determining whether the loss threshold is met nd, therefore, whether n pplicnt will receive pyment. As previously mentioned, to qulify for TAP, producer must hve sustined loss in excess of 15 percent of the trees, bushes, or vines in n individul stnd contiguous crege of the sme type of plnt fter djusting for norml mortlity or dmge. Furthermore, becuse quculture nd nursery producers hve more control over their operting conditions compred with other types of griculturl producers, FSA expects these producers to follow certin mngement prctices to decrese their risk of disster losses. If they fil to do so, FSA my deny request for ssistnce. For exmple, ccording to FSA officils in one stte, they did not pprove n ppliction for SURE from tilpi producer becuse they determined tht the producer could hve prevented the tilpi losses. Tht is, the tilpi died becuse the wter in their tnk ws too hot, nd the producer could hve controlled the wter temperture. Similrly, FSA disster ssistnce progrms typiclly do not cover nursery losses from drought becuse irrigtion is stndrd prctice for nursery producers. FSA officils in stte with lrge nursery industry lso told us tht nursery producers cn control the loction of their potted trees nd plnts. As such, producers could void losses from freeze by moving the pots indoors. Second, severl representtives from stte-level nursery industry ssocitions sid tht smll nursery producers often did not receive disster ssistnce becuse they did not enroll in crop insurnce. As previously mentioned, enrolling in crop insurnce or purchsing NAP re generlly prerequisites for severl FSA disster ssistnce progrms. FSA officils in some sttes in which we conducted interviews lso sid tht nursery producers often do not meet this requirement. FSA ntionllevel officils told us tht becuse crop insurnce coverge is widely vilble to nurseries, there re few instnces when nurseries would use NAP. Ntionl-level officils from USDA s RMA told us tht nursery producers my not enroll in crop insurnce becuse they see little risk of disster losses becuse they operte under controlled conditions. In ddition, RMA officils told us tht both quculture nd nursery producers continuously plnt nd hrvest their crops, reducing their risk of losing n entire yer s crops to single nturl disster. According to one stte s nursery industry representtive, some producers do not relize tht crop insurnce is prerequisite for receiving disster ssistnce under severl of the FSA progrms. FSA ntionl-level Pge 24

29 officils sid tht becuse disster ssistnce progrms only recently included crop insurnce or NAP enrollment s eligibility requirement, mny producers re just beginning to see the connection between hving crop insurnce nd obtining disster ssistnce. Smll quculture producers prticiption in crop insurnce nd NAP tended to vry by stte, ccording to stte quculture representtives. Third, some smll quculture nd nursery producers did not meet the requirements of FSA s Emergency Lon or SBA s Economic Injury Disster Lon Progrms. According to most FSA stte-level lon officils, smll quculture nd nursery producers did not receive ssistnce from the Emergency Lon Progrm primrily becuse they could not demonstrte n bility to repy the lon. The progrm requires tht pplicnts submit frm operting pln s prt of their lon ppliction to demonstrte their bility to py bck the lon ccording to set schedule. The frm operting pln includes pplicnts projected csh flow budget reflecting production, income, expenses, nd lon repyment pln. FSA reviews the frm operting pln long with other ppliction documents. If FSA officils determine the pln is not fesible, they will deny the lon request. For exmple, n FSA lon officil in one stte with lrge nursery industry told us tht the smll nursery producer pplicnts who were denied Emergency Lons were often in tenuous finncil positions prior to the disster nd, once the disster hit, did not hve the mens to repy lon. Similrly, SBA ntionl-level officils told us they declined Economic Injury Disster Lons to some smll nursery producers becuse pplicnts could not demonstrte the bility to repy the lon. SBA lon officils ssess pplicnts repyment bility by evluting finncil informtion submitted by Economic Injury Disster Lon pplicnts. In ddition, SBA denied two of the three Economic Injury Disster Lon pplictions submitted by smll quculture producers ntionwide: one becuse the business did not meet the smll size requirement nd the other becuse it ws locted in costl brrier resource re. 18 Federl lw generlly prohibits the federl government from lending in costl 18 The Costl Brrier Resources Act of 1982, nd lter mendments, removed the federl government from finncil involvement ssocited with building nd development in undeveloped portions of designted costl brriers (including the Gret Lkes). These res were mpped nd designted s Costl Brrier Resources System units or otherwise protected res. Pge 25

30 brrier resource re. The third ppliction ws withdrwn by the pplicnt before SBA begn processing it. FSA nd SBA Efforts to Collborte on Disster Assistnce to Smll Aquculture nd Nursery Producers Are Limited FSA nd SBA engged in some efforts to collborte in providing disster ssistnce to smll quculture nd nursery producers, but the efforts were limited to referring producers from one gency to the other without identifying the ssistnce tht my be vilble to these producers. Specificlly, FSA officils told us tht when they collborte with SBA, it is t the locl level on disster-by-disster bsis or when disster event is concentrted nd losses re immedite. These collbortive efforts generlly re limited to presidentilly declred dissters, where, both SBA nd FSA officils told us, the gencies hve prticipted in multigency disster recovery centers estblished by FEMA. According to SBA officils nd s provided by SBA s website, the gency lso hs tken steps on its own to inform griculturl producers (including smll quculture nd nursery producers) tht FSA provides disster ssistnce. SBA posts some informtion on its website showing tht FSA dministers nd mnges disster ssistnce nd lon progrms through network of federl, stte, nd county offices nd tht producers eligible for SBA ssistnce should lso consider getting ssistnce from FSA. SBA lso mentions FSA nd USDA in the disster notices it publishes following Secretry of Agriculture-declred disster. In ddition, ccording to SBA officils, SBA dvises pplicnts orlly nd in writing to check with FSA for ssistnce when they hve been declined SBA ssistnce becuse their ffected businesses were primrily griculturl nd not covered by the sttutes tht extended eligibility to quculture nd nursery producers. However, SBA typiclly does not provide producers informtion bout the type of FSA disster ssistnce. We identified one primry reson for FSA s nd SBA s limited collbortion. Both FSA ntionl-level officils nd stte-level Emergency Lon officils told us tht FSA field stff know little bout SBA s disster ssistnce progrms, nd SBA stff know little bout wht fctors ffect whether n griculturl lon will be repid. According to FSA ntionllevel officils, the FSA Emergency Lon nd SBA disster lon progrms hve little in common, but FSA s limited knowledge of SBA s progrms my reduce the bilities of both gencies to meet the needs of smll quculture nd nursery producers ffected by dissters. FSA ntionllevel officils sid tht their lon officers t the stte nd county levels my hve some generl knowledge of SBA s disster ssistnce progrms, but tht those lon officers my not know the progrms in enough detil to inform producer bout them. They lso sid tht FSA Pge 26

31 does not expect its county officils to be fmilir with SBA s disster ssistnce progrms. Consequently, the ntionl-level FSA officils sid tht ny knowledge their lon officers might hve bout SBA s progrms is likely to occur in locl FSA offices tht know more bout SBA. Similrly, severl stte-level FSA lon officils we spoke with sid tht they were wre tht SBA hd disster ssistnce progrms but were not necessrily fmilir with them. Also, FSA s ntionl-level office hs not provided ny guidnce explining SBA s progrms to its stff. In contrst, SBA ntionl-level officils told us tht they nd their customer service representtives were generlly fmilir with FSA s disster ssistnce progrms; however, they lso told us tht they hve limited understnding of the fctors tht might led smll quculture nd nursery producers to repy their lons, which could mke it chllenging to serve them. SBA officils lso told us tht, historiclly, SBA hs not focused on providing disster ssistnce to quculture nd nursery producers becuse SBA is prohibited by lw from providing disster lons to other griculturl producers. 19 Consequently, the officils told us, SBA hs not provided disster ssistnce to mny smll quculture nd nursery producers. Similrly, the FSA officils sid tht they nd SBA understnd the smll quculture nd nursery industries differently, giving them little reson to collbortively provide ssistnce. However, both FSA nd SBA provide ssistnce to quculture nd nursery producers tht is complementry, but they hve not estblished comptible policies, procedures, nd other mens to coordinte their progrms. In the bsence of such prctices, collbortion between FSA nd SBA hs been informl. In June 2010, we reported tht, by using informl coordintion mechnisms, gencies my rely on reltionships with individul officils to ensure effective collbortion nd tht these informl reltionships 20 could end once personnel move to their next ssignments. Without written procedures, gencies roles nd responsibilities re not clerly defined. We reported tht gencies cn strengthen their commitment to 19 With the enctment of the Smll Business Jobs Act of 2010, smll enterprises engged in quculture re eligible for Economic Injury Disster Lons. SBA hs implemented this chnge in the lw by llowing quculture enterprises tht re smll businesses to pply for Economic Injury Disster Lons for economic injury covered under disster declrtions issued on or fter the effective dte of the ct (September 27, 2010). 20 GAO, Ntionl Security: Key Chllenges nd Solutions to Strengthen Intergency Collbortion, GAO T (Wshington, D.C.: June 9, 2010). Pge 27

32 work collbortively by rticulting their roles nd responsibilities in forml documents to fcilitte decision mking. Such forml documents cn include memornd of understnding, intergency guidnce, or intergency plnning documents, signed by senior officils in the respective gencies. These documents cn clrify which gencies will be responsible for prticulr ctivities nd how they will orgnize their joint nd individul efforts. As we reported in October 2005, gencies tht hve complementry progrms cn enhnce the vlue of these progrms through intergency collbortion. 21 Among the key prctices we identified were (1) defining nd rticulting common federl outcome; (2) estblishing strtegies tht re mutully reinforcing or joint to help the gencies lign their ctivities, core processes, nd resources to ccomplish their common outcome; (3) greeing on roles nd responsibilities; (4) estblishing comptible policies, procedures, nd other mens to operte cross gency boundries; nd (5) including collbortion competencies in designing performnce mngement systems nd set performnce expecttions for collbortion to reinforce individul ccountbility for collbortive efforts. In the bsence of such prctices, collbortion between FSA nd SBA hs been bsed on limited informtion nd not guided by ny forml collbortive policy, guidnce, or process. FSA nd SBA hve not dopted forml or written memornd of understnding or intergency policies regrding their collbortion on disster ssistnce progrms. Both FSA nd SBA ntionl-level officils told us tht they hve no centrl guidnce in plce to fcilitte collbortion with SBA on implementing their ssistnce progrms. The SBA officils dded tht they did not see ny need for written guidnce becuse, in their view, the FSA nd SBA disster ssistnce progrms do not overlp, nd thus there re no gry res tht would require forml collbortion. With limited informtion nd no documented pproch or policy to guide their collbortion, FSA nd SBA personnel hve not consistently referred pplicnts for disster ssistnce to the other gency nd, in turn, there hs been little opportunity for smll quculture nd nursery producers to get ssistnce for which they my qulify. FSA ntionl-level officils told us tht they hve discussed SBA disster ssistnce with FSA field stff but hve not provided written guidnce on when or how its stff should refer producers, including quculture nd nursery producers, to SBA. 21 GAO Pge 28

33 Further, FSA officils from two sttes sid tht, while they hd referred lrge griculturl producers to SBA for other ssistnce, they hd not done so for disster ssistnce. They lso sid tht becuse of their limited understnding of SBA s disster ssistnce progrms nd little contct with SBA, they were not cler bout the circumstnces under which they should refer producers to SBA. Officils from four FSA stte offices lso told us tht such referrls re either few nd decresing or not mde in their sttes. Similrly, SBA ntionl-level officils told us tht while their lon officers my dvise pplicnts to check with FSA for ssistnce, they do not routinely refer pplicnts to FSA. Consequently, smll quculture nd nursery producers likely hve hd less of n opportunity to get the disster ssistnce for which they my qulify thn they would hve if FSA nd SBA consistently referred producers to the other gency. In ddition, severl representtives of the quculture nd nursery industries told us tht they were not sure whether or how FSA nd SBA coordinted their disster progrms, nd representtive from nother nursery ssocition ws not wre of ny nursery producers tht hd been referred by either gency to the other. However, representtive from nother nursery ssocition noted tht SBA hd referred some producers to FSA, nd the representtive of nother nursery ssocition reclled tht FSA hd referred producers to SBA. Officils with one FSA stte office told us tht nursery producers who sought ssistnce from FSA or SBA could get bounced bck nd forth between the gencies while they determined whether the producers were eligible for ssistnce. Without more forml collbortion, pplicnts for disster ssistnce my not be consistently referred by one gency to the other, leding to fewer opportunities for these smll producers to get ssistnce for which they otherwise might qulify, nd the vlue of these disster ssistnce progrms is diminished for quculture nd nursery producers. Conclusions FSA s nd SBA s 10 disster ssistnce progrms serve lrgely different popultions but cn provide n importnt sfety net to help smll griculturl producers recover from dissters. However, even though six FSA nd SBA disster ssistnce progrms re open to smll quculture nd nursery producers, these producers re missing opportunities to receive such ssistnce. Smll quculture nd nursery producers re not using these progrms s much s other griculturl producers, in prt, becuse of their unique opertions, such s the controlled growing environments tht inherently mitigte disster losses. Furthermore, they re not fully wre of the opportunities tht exist. Becuse they do not pply for nd receive ssistnce for which they could be eligible, smll quculture nd nursery producers disster Pge 29

34 losses hve the potentil to significntly ffect their bility to mintin vible business. Both FSA nd SBA conduct outrech relted to their disster ssistnce progrms, but their methods do not help to ensure tht smll quculture nd nursery producers re wre of their potentil eligibility for the progrms. In ddition, FSA nd SBA engged in some efforts to collborte in providing disster ssistnce to such producers, but the efforts were limited. Moreover, FSA s generl lck of wreness bout SBA s disster ssistnce progrms nd SBA s limited understnding of the fctors tht might led smll quculture nd nursery producers to repy their lons reduce both gencies bilities to fully serve these producers. Without more forml collbortive pproch between the gencies such s through memorndum of understnding nd further eduction of stff bout the other gency s disster ssistnce progrms, pplicnts for disster ssistnce my not be consistently referred by one gency to the other, leding to fewer opportunities for these smll producers to get ssistnce for which they otherwise might qulify. Recommendtions for Executive Action To help ensure tht smll quculture nd nursery producers re wre of the disster ssistnce progrms vilble to them, we recommend tht the Secretry of Agriculture nd the Administrtor of the Smll Business Administrtion direct FSA nd SBA officils to tke the following two ctions: Conduct trgeted outrech to smll quculture nd nursery producers, for exmple, by building on existing gency outrech progrms. Develop strtegy to better formlize collbortion through mens such s developing memorndum of understnding on intergency collbortion nd educting stff bout the other gency s disster ssistnce progrms. Agency Comments We provided the Secretry of Agriculture nd the Administrtor of the Smll Business Administrtion with drft of this report for review nd comment. The deprtments did not provide officil written comments to include in our report. However, in e-mils received August 23, 2012, the USDA nd SBA liisons stted tht USDA nd SBA generlly concurred with our recommendtions. USDA nd SBA lso provided written technicl comments, which we incorported into the report s pproprite. Pge 30

35 As greed with your office, unless you publicly nnounce the contents of this report erlier, we pln no further distribution until 30 dys from the report dte. At tht time, we will send copies to the Secretry of Agriculture, the Administrtor of the Smll Business Administrtion, the pproprite congressionl committees, nd other interested prties. In ddition, the report will be vilble t no chrge on the GAO website t If you or your stff members hve ny questions bout this report, plese contct Lis Shmes t (202) or [email protected] or Willim B. Sher t (202) or [email protected]. Contct points for our Offices of Congressionl Reltions nd Public Affirs my be found on the lst pge of this report. Key contributors to this report re listed in ppendix III. Sincerely yours, Lis Shmes Director, Nturl Resources nd Environment Willim B. Sher Director, Finncil Mrkets nd Community Investment Pge 31

36 Appendix I: Scope, nd Appendix I: Objectives, Scope, nd Methodology Methodology Our objectives for this enggement were to (1) exmine selected U.S. Deprtment of Agriculture (USDA) Frm Service Agency (FSA) nd Smll Business Administrtion (SBA) disster ssistnce progrms nd the types of smll griculturl producers tht they cover; (2) identify the min fctors, if ny, tht my limit smll quculture nd nursery producers prticiption in disster ssistnce from FSA nd SBA; nd (3) exmine FSA nd SBA efforts to collborte in providing disster ssistnce to smll quculture nd nursery producers. To ddress these objectives, we reviewed 10 FSA nd SBA disster ssistnce progrms for griculturl producers nd businesses tht support griculture nd interviewed the FSA nd SBA officils responsible for mnging nd dministering ech progrm. We reviewed these 10 progrms becuse they become vilble to griculturl producers nd businesses tht support griculture following nturl disster nd provide direct finncil ssistnce in the forms of csh pyments nd reimbursements, s well s lons to griculturl producers nd businesses tht support griculture tht hve experienced losses due to dissters. We use the term griculturl producers to refer to fmily frms, commodity producers, quculture producers, nursery producers, nd other frmers nd rnchers. Businesses tht support griculture refers to businesses tht provide support ctivities for griculture tht do not led to griculturl production. Exmples of support ctivities include such duties s cotton ginning, soil preprtion, plnting, nd breeding services for nimls. Our primry focus ws on smll griculturl producers. While there is no one definition tht covers ll smll griculturl producers, we included fmily frms nd other frmers nd rnchers whose size mkes them prticulrly vulnerble to dissters becuse they tend to hve less control over their economic security in generl, nd dissters cn excerbte tht insecurity. 1 When FSA or SBA estblished specific size criteri for progrm eligibility, we used those criteri in our review. FSA dministers 8 of the 10 progrms, including the 5 disster ssistnce progrms tht were uthorized by Title XV of the 2008 frm bill, the Emergency Forest Restortion Progrm, the 1 For individul borrowers, FSA s definition of fmily frm specifies tht the mjority of dy-to-dy, opertionl decisions nd ll strtegic mngement decisions be mde by the borrower or reltive, nd substntil mount of lbor to operte the frm be provided by the borrower or reltive. For corportions, prtnerships, or other entities, the mjority of dy-to-dy, opertionl decisions, nd ll strtegic mngement decisions must be mde, nd substntil mount of lbor to operte the frm be provided by the members responsible for operting the frm. Pge 32

37 Appendix I: Objectives, Scope, nd Methodology Emergency Conservtion Progrm, nd the Emergency Lon Progrm. 2 The progrms uthorized by Title XV of the 2008 frm bill re the Emergency Assistnce for Livestock, Honeybees, nd Frm-rised Fish Progrm, the Livestock Forge Disster Progrm, the Livestock Indemnity Progrm, the Supplementl Revenue Assistnce Pyments Progrm, nd the Tree Assistnce Progrm. SBA dministers the remining two disster ssistnce progrms, including the Economic Injury Disster Lon nd Physicl Disster Lon Progrms. We lso reviewed documents bout the USDA Risk Mngement Agency (RMA) crop insurnce progrm nd FSA Noninsured Crop Disster Assistnce Progrm nd interviewed RMA nd FSA officils bout how these progrms interct with the disster ssistnce progrms in our study. To determine the types of smll griculturl producers the FSA nd SBA progrms cover, we reviewed gency documents, uthorizing sttutes, nd implementing regultions to obtin informtion bout ech progrm, including eligibility requirements, nd interviewed FSA nd SBA officils. When nlyzing whether gps in coverge exist, we reviewed nd nlyzed FSA technicl progrm hndbooks nd SBA progrm summries nd interviewed FSA nd SBA officils. We nlyzed mjor ctegories of griculturl producers involved in the production of food nd fiber, including commodities, specilty crops, orchrd nd nursery products, nd livestock, including quculture producers. We believe tht this hs enbled us to identify gps in coverge, but we recognize tht there could be dditionl gps tht we did not detect in this nlysis. We focused our second objective on the fctors limiting smll quculture nd nursery producers prticiption in these disster ssistnce progrms becuse quculture nd nursery producers re covered by both FSA nd SBA disster ssistnce progrms. Other griculturl producers re not covered by the SBA progrms. We identified the fctors limiting smll nursery nd quculture producers prticiption in these disster ssistnce progrms by reviewing the eligibility criteri for the progrms tht pertin to them nd by interviewing FSA nd SBA officils bout eligibility criteri nd outrech policies nd prctices. We lso interviewed stte-level FSA officils nd industry representtives in seven sttes bout the fctors tht my limit smll quculture nd nursery producers prticiption in disster ssistnce, including progrm 2 Food, Conservtion, nd Energy Act of 2008, Pub. L. No , 122 Stt Pge 33

38 Appendix I: Objectives, Scope, nd Methodology prticiption nd outrech prctices. We ssessed the gencies outrech policies nd prctices ginst prior GAO reports on reching progrm s intended recipients. 3 The industry representtives we selected for interviews were heds of quculture or nursery industry ssocitions or others who could represent the views of producers in their sttes. The sttes we selected were Cliforni, Florid, Louisin, Michign, Mississippi, North Crolin, nd Wshington. We selected these sttes becuse they hve significnt nursery industry or quculture industry presence bsed on the number of nursery nd quculture frms nd nnul sles, s reported by the 2007 USDA Census of Agriculture. We lso considered the geogrphic distribution of the sttes to ensure tht vriety of plces experiencing different types of nturl dissters ws included. We did not conduct ntionwide study on this issue. To determine how FSA nd SBA collborte to provide disster ssistnce to smll nursery nd quculture producers, we reviewed uthorizing sttutes nd FSA nd SBA documents nd interviewed FSA nd SBA officils to obtin informtion bout the gencies policies nd prctices for collborting on disster ssistnce. We lso interviewed stte-level FSA officils in seven sttes nd industry representtives bout their experience with the gencies collbortion. We exmined the degree to which the gencies collbortive efforts reflected key prctices we previously identified tht cn help enhnce nd sustin collbortion 4 mong federl gencies. In ddition, we interviewed officils t the Deprtment of Homelnd Security s Federl Emergency Mngement Agency bout its role in coordinting disster ssistnce. We conducted this performnce udit from September 2011 to September 2012 in ccordnce with generlly ccepted government uditing stndrds. Those stndrds require tht we pln nd perform the udit to obtin sufficient, pproprite evidence to provide resonble bsis for our findings nd conclusions bsed on our udit objectives. We believe tht the evidence obtined provides resonble bsis for our findings nd conclusions bsed on our udit objectives. 3 GAO G nd GAO/GGD GAO Pge 34

39 Appendix II: Federl Assistnce Appendix II: Federl Disster Assistnce Progrms Progrms Agency nd progrm Deprtment of Agriculture Federl Crop Insurnce Progrm Disster Set-Aside Progrm Disster Supplementl Nutrition Assistnce Progrm Emergency Assistnce for Livestock, Honeybees, nd Frmrised Fish Progrm Emergency Conservtion Progrm Emergency Forest Restortion Progrm Emergency Lon Progrm Emergency Hying nd Grzing of Conservtion Reserve Progrm Livestock Forge Disster Progrm Livestock Indemnity Progrm Noninsured Crop Disster Assistnce Progrm Supplementl Revenue Assistnce Pyments Progrm Tree Assistnce Progrm Deprtment of Helth nd Humn Services The Substnce Abuse nd Mentl Helth Services Administrtion Disster Technicl Assistnce Center Purpose Federlly subsidized insurnce progrm tht covers crop nd livestock losses due to nturl dissters s well s other risks. Provides producers in disster counties declred or contiguous to disster counties who hve existing direct lons with FSA nd re unble to mke lon pyments with the opportunity to set side up to 1 full yer s pyment to the end of the lon. Provides food ssistnce specificlly for disster survivors following presidentilly declred disster. Provides csh ssistnce for livestock feed losses nd deths tht re not covered by other FSA disster ssistnce progrms, frmrised fish, nd honeybee deths nd feed losses. Provides prtil reimbursement for griculturl producers to rehbilitte frmlnd tht hs been severely dmged. Provides prtil reimbursement for owners of nonindustril privte forestlnd (including frmers nd rnchers) in order to crry out emergency mesures to restore dmged lnd. Provides lons up to $500,000 to help smll griculturl producers recover from production nd physicl losses due to drought, flooding, other nturl dissters, or qurntine. Allows livestock producers enrolled in the progrm to hy or grze Conservtion Reserve Progrm crege during n emergency in counties tht hve suffered 40 percent or greter loss in norml hy nd psture production due to drought or excessive moisture. Provides csh ssistnce for livestock grzing losses cused by qulifying drought conditions or fire on federl lnd used for grzing. Provides csh ssistnce for livestock deths in excess of norml mortlity due to dverse wether. Provides coverge for crops for which crop insurnce is not vilble. Results in csh pyments to preenrolled producers when low yields, loss of inventory, or prevented plnting occur due to nturl dissters. Provides csh ssistnce for griculturl producers with qulifying crop production losses or crop qulity losses. Provides prtil reimbursement for qulifying orchrdists nd nursery producers to replnt or rehbilitte eligible trees, bushes, nd vines. Provides disster behviorl helth technicl ssistnce grnt support to eligible sttes, territories, nd federlly recognized tribes; supports FEMA s Crisis Counseling Assistnce nd Trining Progrm. Pge 35

40 Appendix II: Federl Disster Assistnce Progrms Agency nd progrm Deprtment of Homelnd Security Purpose Crisis Counseling Assistnce nd Trining Progrm Supports short-term interventions tht involve the counseling gols of ssisting survivors of presidentilly declred disster in understnding their current sitution nd rections, mitigting stress, ssisting survivors in reviewing their disster recovery options, promoting the use or development of coping strtegies, providing emotionl support, nd encourging linkges with other individuls nd gencies who my help survivors in their recovery process. Disster Legl Services Provides legl ssistnce to low-income disster survivors of presidentilly declred disster. Legl ssistnce generlly includes help with insurnce clims, hospitl bills, lost property, prepring lost legl documents, nd home repirs nd contrcts. Individuls nd Households Progrm Housing Assistnce Provides ssistnce to individuls nd households ffected by disster to enble them to ddress necessry expenses nd serious needs, which cnnot be met through other forms of disster ssistnce or insurnce. Forms of housing ssistnce include temporry housing, repir, replcement, nd semipermnent/permnent housing construction. Individuls nd Households Progrm Other Needs Assistnce Provides ssistnce to individuls nd households ffected by disster to enble them to ddress necessry expenses nd serious needs, which cnnot be met through other forms of disster ssistnce or insurnce. Forms of other needs ssistnce include personl property, medicl, dentl, nd funerl. Deprtment of Housing nd Urbn Development 203(h) Mortgge Insurnce for Disster Victims Helps survivors in presidentilly designted disster res to obtin mortgges to purchse new home or rebuild their home tht ws destroyed or dmged by disster. Community Development Block Grnt Disster Recovery Assistnce Deprtment of Lbor Disster Unemployment Assistnce Deprtment of the Interior Bureu of Indin Affirs Emergency Assistnce Deprtment of the Tresury Internl Revenue Service Disster Assistnce nd Emergency Relief Progrm Provides grnts to sttes, locl governments, Americn Indin tribes, nd other res s result of presidentilly declred disster to rebuild the ffected res nd provide seed money to strt the recovery process. The grnts re to primrily benefit low-income residents. Provides unemployment benefits to individuls who hve become unemployed s result of presidentilly declred mjor disster nd re not eligible for regulr unemployment insurnce benefits. Provides csh pyments to federlly recognized Americn Indins nd Alsk Ntive tribe members who suffer from burnout, flood, or other destruction of their homes nd loss or dmge to personl possessions. Allows txpyers to deduct nonreimbursed csulty losses in presidentilly declred disster. Txpyers my deduct the losses in the yer the disster occurred or file n mended return to deduct the loss in the yer preceding the disster. Pge 36

41 Appendix II: Federl Disster Assistnce Progrms Agency nd progrm Svings Bond Redemption nd Replcement Smll Business Administrtion Economic Injury Disster Lon Progrm Home nd Property Disster Lons Business Physicl Disster Lons Purpose Allows bond owners in res ffected by presidentilly declred disster to redeem bonds prior to the expirtion of the initil 12- month holding period. Provides working cpitl lons to smll businesses or privte, nonprofit orgniztions for up to $2 million in working cpitl to meet finncil obligtions tht could hve been met hd the disster not occurred. Provides lons to renters nd homeowners up to $40,000 to repir or replce clothing, furniture, crs, pplinces, etc. dmged or destroyed in disster nd lons to homeowners up to $200,000 to repir or replce their primry residence to its predisster condition. Provides lons up to $2 million for business to repir, rehbilitte, or replce dmged property, including rel estte, equipment, inventory, nd fixtures. Sources: GAO review of federl disster ssistnce progrms. These progrms re included in this GAO report nd re those tht become vilble to griculturl producers nd businesses tht support griculture following disster nd provide direct finncil ssistnce. Pge 37

42 Appendix III: GAO nd Stff Appendix III: GAO Contcts nd Stff Acknowledgments Acknowledgments GAO Contcts Lis Shmes, (202) or Willim B. Sher, (202) or Stff Acknowledgments In ddition to the individuls nmed bove, Anne K. Johnson, Assistnt Director; Ky Kuhlmn, Assistnt Director; Lucs Alvrez; Kevin Bry; Ann Crbino; John Forrester; Annmrie Lopt; Lindsy Red; Anne Rhodes-Kline; nd Crol Herrnstdt Shulmn mde significnt contributions to this report. Pge 38

43 Relted GAO Relted GAO Products Crop Insurnce: Svings Would Result from Progrm Chnges nd Greter Use of Dt Mining. GAO Wshington, D.C.: Mrch 13, Hurricnes Ktrin nd Rit: Federlly Funded Progrms Hve Helped to Address the Needs of Gulf Cost Smll Businesses, but Agency Dt on Subcontrcting Are Incomplete. GAO Wshington, D.C.: July 29, USDA Crop Disster Progrms: Lessons Lerned Cn Improve Implementtion of New Crop Assistnce Progrm. GAO Wshington, D.C.: June 4, Smll Business Administrtion: Continued Attention Needed to Address Reforms to the Disster Lon Progrm. GAO T. Wshington, D.C.: My 19, Smll Business Administrtion: Additionl Steps Should Be Tken to Address Reforms to the Disster Lon Progrm nd Improve the Appliction Process for Future Dissters. GAO Wshington, D.C.: July 29, Gulf Cost Disster Recovery: Community Development Block Grnt Progrm Guidnce to Sttes Needs to Be Improved. GAO Wshington, D.C.: June 19, (361333) Pge 39

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