New Farm Disaster Aid Mandates Insurance: Producers Must Buy Coverage for Two Years to Get Relief

The Agricultural Emergency Relief Act of 2025 is setting up a new, formal emergency relief program run by the Secretary of Agriculture to help farmers who get hit by natural disasters like droughts, floods, or wildfires. If you’re a producer who suffers a “qualified loss”—that’s damage to crops, trees, bushes, or vines, or even being prevented from planting—you can apply for a payment. The bill defines a “disaster” broadly, including everything from hurricanes and excessive heat to derechos and winter storms, giving the program wide reach.

The Catch: No Insurance, No Aid

Here’s the first major detail: to get this emergency money, you have to agree to buy Federal Crop Insurance or sign up for the Noninsured Crop Disaster Assistance Program (NAP) for the next two succeeding crop years. This is a mandatory condition (SEC. 3). Basically, the government is saying, “We’ll help you out this time, but you need to commit to managing your risk going forward.” For a lot of producers, especially those who prefer to self-insure or operate in areas where premiums are high, this turns emergency relief into a mandated expense for the next two seasons. If you’re a small farm operating as a joint venture or general partnership, watch out: the bill explicitly excludes these structures from the definition of “producer,” meaning they won’t be eligible for this aid at all (SEC. 2).

The Payment Penalty for Going Uninsured

The way your disaster payment is calculated depends heavily on whether you already had insurance when the disaster hit. If you had Federal Crop Insurance or NAP, your payment calculation is based on existing data and can cover up to 90 percent of your qualified loss. If you didn’t have insurance, your payment is based on a comparison of your disaster-year revenue versus a “benchmark year,” and your total payment is capped at just 70 percent of your qualified loss (SEC. 3). That 20 percentage point difference is a significant penalty for producers who haven’t historically used federal insurance programs, making recovery much harder for those who chose to operate without it.

Income Limits and the High-Roller Loophole

The bill sets payment caps based on your average adjusted gross farm income over the last three years. If your farm income is less than 75 percent of your total income, your total aid is capped at $250,000 ($125,000 each for specialty/high-value crops and other crops). However, if your farm income is 75 percent or more of your total income, those limits jump significantly: up to $900,000 for specialty/high-value crops and $250,000 for other crops (SEC. 3). This tiered structure means that large-scale commercial operations with high farm income can receive nearly four times the disaster aid for their specialty crops compared to smaller or diversified producers.

The Secretary’s Discretion

It’s also worth noting that the Secretary of Agriculture has a lot of power here. For the insured group, the Secretary sets the percentage factor (up to 90%) used in the calculation. For the uninsured group, the Secretary sets the percentage factor (up to 70%) and determines what counts as a “benchmark year” for revenue comparison. This means the final payout amounts are not fixed in the bill but depend heavily on the Secretary’s policy decisions, which could be adjusted to either maximize or minimize relief depending on the administration and available funds. The program is authorized to run from fiscal years 2025 through 2030, with up to 1 percent of the funding earmarked for administrative costs (SEC. 4).