Washington More than $2 billion in government aid will be needed from Congress to compensate farmers and ranchers for damages from drought and other weather problems this year, Agriculture Secretary Dan Glickman said Wednesday.
Some $1.4 billion would cover losses from crops, while another $800 million would go to livestock producers, many of whom have lost pasture to drought.
"Those numbers could rise as we watch and see what happens" with the fall harvest, Glickman told the House Agriculture Committee.
Most farmers have enjoyed good weather this year. Growers are expected to harvest record amounts of corn and soybeans this year, the nation's two biggest crops, but several states, including Nebraska, Kansas, Texas, Georgia, have been going through a severe drought.
Nebraska lawmakers have been seeking more than $500 million in aid for their state alone.
Lawmakers are planning to include money for disaster payments in the final version of a pending appropriations bill for the Agriculture Department. The Senate version of the bill earmarked about $1 billion for disaster assistance; the House version had none.
The money is intended to compensate producers for losses that aren't covered by federally subsidized crop insurance. About 30 percent of the nation's acreage isn't covered by the insurance, and some farmers who do only have enough coverage to reimburse them for near-total losses.
The government is trying to get more producers to buy the insurance. Congress passed legislation earlier this spring that would provide $8.2 billion over the next five years to reduce premiums and expand the coverage to more crops.
"By and large this is a good deal for American farmers," Glickman said.
But he told the committee that private companies that sell and service the policies are making excessive profits in comparison to other lines of insurance.
Glickman, the former Kansas congressman who leaves office in January, said his successor should renegotiate the terms of the government's contract with the insurance companies.
Last year, companies had an operating profit of $276 million on the insurance and received another $500 million to cover their administrative expenses.
Some 18 companies now sell the insurance.