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Pa. Dems set drought hearing

August 23, 1999|By DON AINES

CHAMBERSBURG, Pa. - Pennsylvania legislators will sit down with farmers, agriculture businessmen and federal officials on Aug. 31 to learn what the state can do to help ease the economic impact of the drought.

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"We hope to hear from folks that are on the potential receiving end" of assistance, State Rep. Jeff Coy, D-Franklin, said Monday. The day-long hearing by the House Democratic Policy Committee will begin at 9:30 a.m. in the Capitol Building's East Wing.

Coy said their are no specific recommendations for state assistance at this point, "but the bottom line is the state has a healthy surplus right now."

He said the 1998-99 surplus was about $700 million, with some of that moved to the Rainy Day Fund, which has more than $1 billion.

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Pennsylvania Gov. Tom Ridge has written the U.S. Congress, including leaders of the Agriculture and Appropriations committees, about federal assistance, said spokeswoman April Hutcheson.

"When Congress returns in the fall, he will be advocating Congress give farmers grants, not loans," Hutcheson said. She said Congress last year approved $6 billion in emergency aid that included $3.2 billion in direct cash assistance to farmers, mostly in the Midwest.

Last Thursday, Pennsylvania U.S. Senator Rick Santorum got the message that farmers need cash assistance, not more debt in the form of low-interest federal loans. Meeting with farmers near Waynesboro, Pa., Santorum said farmers receiving cash assistance should be required to get crop insurance to guard against future losses.

"Crop insurance is really paying off this year," said Tom Kerr, executive director of the Franklin County Farm Service Agency. He estimated about 60 percent of county farmers have crop insurance, but the payout won't be known until after the harvest.

Kerr said farmers can insure crops for up to 90 percent of their value based on production history or average county yields. "If you don't make that production level ... they pay the difference," he said.

If the state approves aid to drought-stricken farmers, Kerr wondered how the Pennsylvania Department of Agriculture would determine who qualifies and how it the money would be distributed.

As for federal loans, Kerr said he expects a lot of inquiries, but not many applicants. The loans are useful for restructuring debt, but a farmer has to first be turned down by commercial lenders, yet show he can make payments in order to qualify.

Kerr said banks could delay interest payments and use other incentives to keep farm customers. Kerr said he thinks farmers will wait to see whether Congress or the state offer grants before making decisions on disaster loans.

"Good managers will come through this in good shape," Kerr said. Many farmers have a feed surplus from last year to help cushion the impact of the drought.

Because of a drought in Maryland in 1997, some Franklin County farmers were eligible for assistance, but there was only one applicant, Kerr said.

Farmers often applied for assistance under a federal price-support program that was discontinued in 1996, he said.

This year, farmers have begun harvesting their reduced corn crop. Joe Middour of Waynesboro expects his to be about 60 percent of normal.

"Normally, I'd have enough corn for silage and grain," Middour said. It usually takes about 90 of his 225 acres of corn to fill the silos, but the figure will be closer to 140 acres this year. The rest will be harvested for grain, but Middour said he'll have to buy more to feed his herd of 150 dairy cattle.

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