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At Landrieu's Request, GAO Conducts Study of USDA-SBA Disaster

Press Release

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Date:
Location: Washington, DC

United States Senator Mary L. Landrieu, D-La., Chair of the Senate Committee on Small Business and Entrepreneurship, reacted today to a study conducted by the Government Accountability Office (GAO) on disaster assistance for aquaculture businesses. The study was requested by Sen. Landrieu in October 2010 following reports from industry groups and businesses on a lack of awareness on and ineligibility for federal disaster programs.

The GAO report found that the Farm Services Agency (FSA) and the Small Business Administration (SBA) have 10 disaster assistance programs that small agricultural producers and businesses that support agriculture can use to recover from natural disasters. Unfortunately, according to the report, the producers don't participate, because they are often not aware of the programs.

In order to make producers more aware of the existence of these programs, GAO recommended conducting targeted outreach to small aquaculture and nursery producers and developing a strategy to improve interagency collaboration and educate staff about the other agency's disaster assistance program.

"As Louisianians saw up close last month with Hurricane Isaac, disasters can and will strike at any moment," said Senator Landrieu. "This report, coming out so soon after the hurricane, reiterates that we must ensure that businesses of all kinds have the tools necessary to recover and rebuild from a disaster. Aquaculture and nursery producers, in particular, are an important part of Louisiana's economy. It is essential that they are educated about assistance options available to them before disaster strikes to make better informed decisions in the difficult recovery that often follows disasters.

"I look forward to working with the SBA to utilize this report to continue improvements to SBA's disaster programs, especially the report's findings on pre-disaster business outreach and targeted outreach to aquaculture businesses."

Sen. Landrieu included a key provision in [Public Law 11-240] the Small Business Jobs Act of 2010 that allows small aquaculture businesses to be eligible for SBA Economic Injury Disaster Loans (EIDLs).

In the 1980s, Congress repealed SBA disaster assistance for all agricultural businesses. As part of this effort, SBA was prohibited from providing assistance to these industries as it was assumed that they would always be covered by other federal agencies, more specifically, the U.S. Department of Agriculture (USDA). However, the 2005 and 2008 Gulf Coast hurricanes demonstrated gaps between USDA and SBA disaster assistance. For example, in 2005, the southern part of Louisiana was hit hard by both Hurricanes Katrina and Rita. Aquaculture businesses, many crawfish farmers or those with fish farms, were ineligible for both USDA disaster assistance and SBA disaster loans. More recently, small aquaculture businesses, including oyster farmers, were ineligible for EIDLs following the Deepwater Horizon disaster. For this disaster, no other federal agency was providing similar disaster assistance but these businesses were still excluded from SBA assistance.

However, following President Barack Obama's signing of the Small Business Jobs Act into law on September 27, 2010, small aquaculture businesses became eligible for SBA Economic Injury Disaster Loans if no other federal assistance is available for that disaster. Industries that now are eligible for future SBA EIDLs include farmers of: algae, alligators, frogs, turtles, seaweed, clams, crawfish, pearls, fish farms/hatcheries, mussels and oysters. These small aquaculture businesses are also now eligible for EIDL assistance in 24 Louisiana parishes declared a disaster as a result of Hurricane Isaac. Those interested in SBA disaster assistance may contact the SBA Customer Service Center at 1-800-659-2955 or visit SBA's website at www.sba.gov.


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