Drought aid announced by U.S. Agriculture Dept.

The U.S. Department of Agriculture is streamlining the process for farmers to apply for government disaster help as crops in many states burn up in the widest drought in nearly 25 years.

Agriculture Secretary Tom Vilsack says more than 1,000 counties nationwide will automatically qualify for disaster assistance if they're in a severe drought for at least eight weeks or were in extreme drought this growing season.

The department also is lowering the interest rate on emergency loans to 2.25 per cent from 3.75 percent.

As much as $39 million US is available under the program.

In addition, the government will help farmers use part of the land set aside in a conservation program for hay or grazing since the drought is expected to reduce the amount of corn available for feed.

Almost a third of the U.S. corn crop is already showing signs of damage, and on Wednesday, the Department of Agriculture released yet another report predicting that farmers will get only a fraction of the corn anticipated last spring when they planted 96.4 million acres, the most since 1937.

It's too soon to say how that will affect food prices. The cost of meat is most likely to be affected because corn is used to feed cattle, and its price is usually passed along in the cost of hamburger and steak.

But meat prices were already rising and were expected to stay high after last year's drought in Texas forced many ranchers to reduce their herds.

Corn also is widely used as an ingredient — in corn flakes to ketchup, bread and soda pop — but it accounts for a small fraction of their costs compared to such things as transportation and marketing. A rule of thumb is that food prices typically climb about one per cent for every 50 per cent increase in average corn prices, said Richard Volpe, a USDA food markets research economist.

The government has already predicted food prices will increase this year by as much as 3.5 per cent. It won't be clear until the fall, when all the damage is known, how much the crop loss will add to that, Volpe said.

The drought stretches from parts of Ohio to California. The historic drought that gripped Texas and other parts of the Southwest last year was more severe, but this year is notable for the ground covered.

"To see something on this continental scale where we're seeing such a large portion of the country in drought you have to go back to 1988," said Brad Rippey, a USDA agricultural meteorologist. That year, farmers saw corn yields, or the amount produced per acre, drop by nearly a third.

The USDA said Wednesday it now expects farmers to get 146 bushels per acre this year, rather than the 166 bushels per acre it predicted at the beginning of the year. They will harvest an estimated 12.97 billion bushels of grain, a 12 per cent reduction from an estimate in June of 14.79 billion bushels.

'A lot of the landscape is just dying.' —Don Duvall, Illinois farmer

 But even with that loss, farmers may still do better than they would have 10 years ago because plant breeders have developed corn varieties better able to withstand drought.

The average yield in 2002 was about 129 bushels per acre. Even farmers who lose much or all of their corn this year are unlikely to go under. Most take out crop insurance to cover weather-related losses.

Matt Johnson's popcorn fields in Redkey, Ind., have been burning up by the day, and he expects his insurance adjuster to tell him to mow them over if no rain comes by next month.

"It's pretty sad," said Johnson. "Everything's just so short, so small. We haven't mowed our yard since sometime in May. We didn't even get an inch of rain in June and haven't gotten an inch yet in July."

In the end, it may be farmers' spirits that take the hardest hit.

"It's a farmers' nature to want to grow a good crop, and that's a very depressing state to be in when that doesn't happen," said Don Duvall, who farms near the Illinois-Indiana state line in Carmi, Ill.

"Not only has it hit the corn crop, but there are well-established trees that are dying," he added. "Leaves are falling like it's autumn, and a lot of the landscape is just dying."