Obama Says U.S. to Add $30 Million to Drought Relief

President Barack Obama said the administration will provide an additional $30 million to aid farmers and ranchers who are dealing with the worst drought in 56 years.

“This has been an all hands on deck response,” Obama said before meeting with Cabinet officials including Labor Secretary Hilda Solis and Agriculture Secretary Tom Vilsack at the White House. “It is a historic drought and it has had a profound impact on farmers and ranchers.”

Obama said the new Agriculture Department aid will help get more water to livestock and rehabilitate land affected by the drought, which is scorching crops and forcing farmers to sell cattle and hogs for lack of feed. The conditions ultimately will hit consumers in higher food prices.

The president also urged Congress to pass the farm bill, saying that as members go home he hopes they will see the devastation and have a “greater sense of urgency.”

The U.S. House passed a $383 million emergency relief package on Aug. 2 for livestock producers affected by the drought but didn’t take action on a larger five-year reauthorization of agricultural programs because lawmakers lacked enough votes. The Senate, which returns Sept. 10, took no action.

In addition to boosting aid, Obama said his administration is working with crop insurance companies to offer a “grace period” for unpaid insurance premiums and is opening up more land for haying and grazing for livestock.

Grazing Land

The government also expanded the area of federally subsidized conservation land available for emergency grazing to 3.8 million acres, and said crop-insurance companies have agreed to a short grace period for farmer premium payments.

The effects of the drought are hitting grain-processing and export companies, such as Cargill Inc., as well as shippers and even tourism. Tyson Foods Inc. (TSN), the largest U.S. meat processor, said yesterday its profit will be lower after the company was forced to pay more for grain to feed animals.

Conditions for the top two U.S. crops, corn and soybeans, are the worst since 1988. The U.S. corn crop, valued at $76.5 billion in 2011 is rated 50 percent poor or very poor, the Agriculture Department said yesterday. About 39 percent of the soybean crop, worth $35.8 billion last year, was rated poor or very poor as of Aug. 5.

To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net; Kate Andersen Brower in Washington at kandersen7@bloomberg.net

To contact the editor responsible for this story: Steve Komarow at skomarow1@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.