What is LIP and How to Apply

What is LIP (Livestock Indemnity Program)?

LIP provides benefits to eligible livestock owners or contract growers for livestock deaths in excess of normal mortality caused by eligible loss conditions, including eligible adverse weather, eligible disease, and attacks by animals reintroduced into the wild by the federal government or protected by federal law.

Who Can Apply

A livestock owner must have legally owned the livestock on the day the livestock died and/or were injured by an eligible loss condition. An individual or entity applying must also have Adjusted Gross Income (AGI) below $900,000

Eligible Livestock

Eligible livestock must:

• have been maintained for commercial use as part of a farming operation on the day they died,
• and not have been produced or maintained for reasons other than commercial use as part of a farming operation.

Eligible livestock must have either:

• died in excess of normal mortality as a direct result of an eligible loss condition,
• or been injured as a direct result of an eligible loss condition and were sold at a reduced price.

CATTLE	POULTRY	SWINE	OTHER
Adult Beef Bulls Adult Beef Cows Adult Buffalo/Bison Bulls Adult Beefalo Bulls Adult Beefalo Cows Adult Buffalo/Bison Cows Adult Dairy Bulls Adult Dairy Cow s/ Non-Adult Beef Cattle Non-Adult Buffalo/Bison Non-Adult Beefalo	Non-Adult Dairy Cattle Chickens, Broilers, Pullets (regular size) (4.26 to 6.25 pounds) Chickens, Chicks Chickens, Layers Chickens, Pullets/Cornish Hens (small size) (Less than 4.26 pounds) Roasters (6.26 to 7.75 pounds)Super Roasters/Parts (7.76 pounds or more) Ducks, Ducklings Ducks, Ducks Geese, Goslings Geese, Goose Turkeys, Poults Turkeys, Toms, Fryers, Roasters	Suckling/Nursery Pigs (less than 50 pounds) Swine, Lightweight Barrows, Gilts (50 to 150 pounds) Swine, Sows, Boars, Barrows, Gilts (151 to 450 pounds) Swine, Sows, Boars (over 450 pounds)	Alpacas Deer Elk Emus Equine Goats, Bucks Goats, Nannies Goats, Slaughter Goats/Kids Llamas Ostriches Reindeer Caribou Sheep, Rams Sheep, Ewes Sheep, Lambs

**Excluded livestock includes wild free-roaming animals, pets, or animals used for recreational purposes, such as hunting, roping, or for show.

Eligible Events

Adverse Weather Event 

Eligible adverse weather event means extreme or abnormal damaging weather that is not expected to occur during the loss period for which it occurred, which directly results in eligible livestock losses.

• Earthquake, hail, lightning, tornado, tropical storm, typhoon, vog, winter storm (if lasting 3 days with high winds, freezing rain/sleet, extreme cold, or heavy snow), hurricane, flood, blizzard, wildfire, extreme heat, extreme cold, or straight-line winds.
• DOES NOT include drought.

The USDA office determines whether a particular weather event, in fact, reached an “extreme or abnormal damage”’ threshold to be considered an eligible event. Farmers can ask their local office for more details on how this threshold is determined or the FSA Handbook on LIP (linked at the bottom of the page) includes further details. 

For example, livestock death losses due to extreme heat must have a documented heat index of 105 degrees or greater for three days or more with nightly temperatures remaining 75 degrees or above for those days prior to the deaths. And livestock death loss due to extreme cold are qualified when, for newborn to one-month-old livestock, there are temperatures of 0 degrees or less for at least two hours and, for livestock one month or older, temperatures of -20 degrees (or colder depending on size and type of livestock) for two consecutive days.

Disease 

A disease that is exacerbated by an eligible adverse weather event that directly results in eligible livestock losses OR a disease that is caused and/or transmitted by vectors — and vaccination or acceptable management practices are not available, whether or not they were or were not implemented, that directly result in loss in excess of normal mortality.

• Weather exacerbated: anthrax, cyanobacteria, (beginning in 2015 calendar year) and larkspur poisoning.
• Vector caused: Blue Tongue, EHD, and CVV.

Animal Attack 

An attack by animals reintroduced into the wild by the federal government or protected by federal law, including wolves and avian predators, that directly results in either injured livestock sold at a reduced price or death of eligible livestock, in excess of normal mortality.

LIP Payment Calculation

LIP Payment for Livestock Mortality 

= National Payment Rate**   x   # livestock affected   x   producer’s share

**National Payment Rate = 75% of average fair market value (or average income loss for contract livestock) View the LIP national payment rates here.

LIP Payment for Injured Livestock Sold at Reduced Price 

=  National Payment Rate   –   income from sale   x   producer’s share

Example LIP Calculation

A farmer has full ownership over 20 head of adult beef bulls that died due to an extreme flooding event. Based on FSA’s LIP payment rate (which is 75% of the average fair market value of adult beef bulls) the farmer’s LIP payment would be:  $1,195.31/head x 20 head x 100% = $23,906.20

LIP Process

What To Do Before A Loss

• Know your local FSA agent
• Keep good documentation of your livestock
• Ensure that you have all grower contracts easily on hand

What To Do After A Loss

• Document loss
  • Make sure you collect documentation that shows evidence of loss, current physical location of livestock in inventory and location of the livestock at the time of death
  • Have notes about how many, what kind of livestock were lost
  • If sold for reduced price due to injury, have sales receipts

• Contact Local FSA office
  • Submit Notice of Loss to FSA office within 30 days of when loss/injury became apparent.
  • Submit application to FSA office within 60 days after the calendar year in which the loss/injury occurred.
    • Contract Growers — include copy of contract.
    • All – include documentation of loss.

FSA Contact information

You visit: https://offices.sc.egov.usda.gov/locator/app to locate your nearest FSA office. If you have trouble locating, getting in touch with, or receiving adequate service from your agent, please let us know.

To learn more and inquire about particular FSA disaster assistance programs, email [email protected] or call 877.207.6373

USDA LIP Fact Sheet

Want to really dig into the details of LIP? Review FSA’s Handbook on LIP.

About the Farmers of Color Network (FOCN) at RAFI-USA

FOCN develops relationships with farmers of color in order to support and honor multi-generational organizing, sustainable agricultural practices, and ancestral traditions and knowledge. FOCN provides farmer-led technical assistance, offers funding opportunities, and hosts networking events and gatherings to expand market access.