Drought management decisions have consequences
CHICO, Calif. — Help is available for ranchers trying to survive California’s historic drought, but each decision a producer makes brings consequences.
So advised Wally Roney, a cow-calf operator here whose ranch survived the state’s last catastrophic drought in the mid-1970s and whose family survived a similar dry spell in the 1920s.
Roney made it through the drought in 1976 and ‘77 by getting a low-interest loan from the USDA’s Farm Service Agency to purchase forage, only because there weren’t programs yet to defer income from cattle sell-offs for tax purchases, he said.
However, even a low-interest loan is “a short-term fix with a long-term loss, and now you’ve got to worry about paying that back,” Roney told other ranchers at a recent workshop on drought management.
Established in the 1850s, the Roney Land and Cattle Co. encompasses about 150 square miles in Butte and Tehama counties. Roney, who was the Tehama County Cattlemen’s Association’s Man of the Year in 2013, is perhaps best known among ranchers for advocating for private property rights.
He fought a rangeland reform proposal by then-U.S. Interior Secretary Bruce Babbitt in the 1990s and a so-called “safe harbor agreement” with state resource agencies in 2010 that would have given area ranchers relief from Endangered Species Act violations if they made habitat improvements on their land.
A statewide University of California survey last month found that more than one-third of ranchers expect devastating impacts to their operations if drought conditions persist. Many ranchers have been trimming their herds to cut down on feed costs.
Roney said his family’s ranch survived drought in 1924 by selling off its cattle and marketing in sheep, which didn’t need as much drinking water. But it took the ranch decades to re-establish a genetic identity for its cattle, which was partly why the ranch didn’t sell its herd again in the 1970s, he said.
With the loss of genetics and the tax liability for the income from the cattle, “we were scared we wouldn’t be able to get back into the business,” he said.
He said the ranch initially was turned down for loans by three banks.
“They said, ‘You guys are so broke you’ll never be able to pay it back,’” Roney said. “So we were on the edge of not qualifying for the low-interest financing that was available to us.
“Then we were faced back with the choice of selling cows,” he said. “So back to Sacramento I went and kept working with them, and pretty soon I got the loan.”
More programs are available today to help ranchers, including the FSA’s Noninsured Crop Disaster Assistance Program, which helps producers when low yields or loss of inventory occur because of a natural disaster.
However, many ranchers have seen delays in drought-related NAP payments. Roney said he hasn’t yet been compensated for losses from 2012.
“Yet when I make out a budget, I have to put down what I’m going to pay for that insurance with no guarantees I’m going to get it,” he said. “I buy insurance with the assumption that in a drought, I’m going to get something.”
Roney said there were various factors that pushed ranchers out of business in the mid-1970s drought. Some sold all their cattle and couldn’t get back into the business, others tried to feed their herds and couldn’t sustain the expense and others had difficulty paying back loans and taxes, he said.
UC drought workshop presentations on video: http://sfrec.ucanr.edu/Outreach_-_Education/Workshops_and__Field_Days/