A farm bill that would have set aside $40 million to provide grants to S.C. farmers who sustained crop damage in the 2015 floods was vetoed by Gov. Nikki Haley.
In an executive order (.pdf), Haley returned the bill to House Speaker Jay Lucas, R-Hartsville, and said she vetoed the bill “because it is an unprecedented bailout for a single industry affected by last year’s flooding.”
The House, the day after Haley returned the bill, overrode her veto by a 112-2 margin. Lucas countered Haley’s argument by suggesting she failed to mention farmers when requesting federal aid after the floods.
“Because of the governor’s refusal to advocate on behalf of our state’s largest industry, the General Assembly was forced to take action,” Lucas said, in a statement.
The veto override moves as a message from the House to the Senate and could possibly be taken up as early as today, when the full Senate meets.
House Ways and Means Chairman Brian White, R-Anderson, said in a statement, “I sponsored this bill in the House because our many of our farmers desperately need our help after the historic flooding.”
Haley followed through with the promise she made at last week’s S.C. Republican Convention when she said she would not “support any bailout of any industry over any other industry that suffered from this 1,000-year flood.”
The bill establishes the S.C. Farm Aid Fund, a separate fund from the state’s general fund, and allocates $40 million from the state’s contingency reserve fund to begin granting dollars. Under the terms of the grant, any award cannot exceed 20% of a person’s verifiable loss of agricultural commodities, and grants cannot exceed $100,000 to any one person. A Farm Aid Advisory Board will be created to distribute the funds. The bill stipulates the board will dissolve 45 days after the awarding of the final grant, or by June 30, 2017, whichever comes first. If there are funds remaining, they will go back into the state’s general fund.
Farmers also cannot receive grants for losses already covered by their insurance. Haley used the fact that farmers get crop insurance as another rationale for her veto saying that “federally subsidized insurance covers up to 85% of their business losses with the taxpayer covering an average of 62% of the insurance premium costs.”
During a panel discussion sponsored by the Clemson University Cooperative Extension Service, agricultural economist Nathan Smith said higher insurance premiums have left farmers opting for higher deductibles, which lowers claim payments, according to a release from Clemson University. He said farm insurance coverage is capped at 85% of a farm’s acreage, but farmers usually purchase insurance to cover 65% to 75%.
But, in her veto order, Haley countered by saying that federal resources are made available to farmers year-round and others were made available after the floods. She added that farmers have received nearly $27 million in cash payments for commodity price reports since October 2015.
“This bill would give farmers an additional $40 million in cash payments other small businesses will never receive,” Haley said.
Agriculture Commissioner Hugh Weathers said the day Haley issued her veto that the General Assembly should override it.
“Even though farmers were among those hit hardest by the October floods, with more than $376 million in losses, the governor is turning her back on our state’s largest industry,” Weathers said, in a statement. “The floods devastated many who lost a year’s income and are struggling to put a new crop in the ground.”
Frank Knapp, president and CEO of the S.C. Small Business Chamber of Commerce, criticized Haley for using small businesses as an excuse for not supporting the farm bill.
“Our small businesses want our farmers, who contribute to the economic health of our state, to recover,” Knapp said. “They don’t begrudge farmers from receiving funds available to them just because other small businesses don’t have the opportunity.”
Estimates of the damage to farming caused by the 2015 floods is between $330 million and $375 million, with another estimated $45 million in losses because the ground remained too saturated to plant winter crops.
Reach Matthew Clark at 864-235-5677, ext. 107, or @matthewclark76 on Twitter.
The Columbia Regional Business Report contributed to this story.