USDA Releases Coronavirus Food Assistance Program Payment Regulations

The CFAP provides financial assistance to producers of agricultural commodities who have suffered a 5% or greater price decline due to COVID-19 and face additional significant marketing costs.

 

The U.S. Department of Agriculture (USDA) has released regulations for direct payments under the Coronavirus Food Assistance Program (CFAP).

 

“CFAP provides vital financial assistance to producers of agricultural commodities who have suffered a 5% or greater price decline due to COVID-19 and face additional significant marketing costs as a result of lower demand, surplus production and disruptions to shipping patterns and the orderly marketing of commodities,” says Ron Haugen, North Dakota State University Extension farm management specialist.

 

 

Farmers and ranchers will receive direct support from two funding sources. The first is $9.5 billion in appropriated funding provided in the Coronavirus Aid, Relief and Economic Stability (CARES) Act to compensate farmers for losses due to price declines that occurred between mid-January 2020 and mid-April 2020. It also provides support for specialty crops for product that had been shipped from the farm during the same time period but subsequently spoiled due to loss of marketing channels.

 

The second funding source uses the Commodity Credit Corporation Charter Act to compensate producers for $6.5 billion in losses due to ongoing market disruptions.

 

 

Nonspecialty crops eligible for the CFAP payments include malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat and hard red spring wheat. Wool also is eligible.

 

Producers will be paid based on inventory subject to price risk held as of Jan. 15, 2020. A payment will be made based on 50% of a producer’s 2019 total production or the 2019 inventory as of Jan. 15, 2020, whichever is smaller, multiplied by the commodity’s applicable payment rates. Payment rates for each commodity can be found at https://www.farmers.gov/cfap.

 

 

Livestock eligible for the CFAP include cattle, lambs and yearling sheep, and hogs. The total payment will be calculated using the sum of the producer’s number of livestock sold between Jan. 15 and April 15, 2020, multiplied by the payment rates per head, and the highest inventory number of livestock between April 16 and May 14, 2020, multiplied by the payment rate per head. Payment rates for various types of livestock can be found at https://www.farmers.gov/cfap.

 

 

For dairy, the total payment will be calculated based on a producer’s certification of milk production for the first quarter of calendar year 2020 multiplied by a national price decline during the same quarter. The second part of the payment is based on a national adjustment to each producer’s production in the first quarter. Payment calculations can be found at https://www.farmers.gov/cfap.

 

 

For eligible specialty crops, the total payment will be based on the volume of production sold between Jan. 15 and April 15, 2020. That is the volume of production shipped, but unpaid, and the number of acres for which harvested production did not leave the farm or mature product was destroyed or not harvested during that same time period, and which has not and will not be sold.

 

Specialty crops include almonds, beans, broccoli, sweet corn, lemons, iceberg lettuce, spinach, squash, strawberries and tomatoes. A full list of eligible crops can be found at https://www.farmers.gov/cfap. Additional crops may be deemed eligible at a later date.

 

 

Payments are limited to $250,000 per person or entity for all commodities combined. Applicants who are corporations, limited liability companies or limited partnerships may qualify for additional payment limits in situations in which members actively provide personal labor or personal management for the farming operation.

 

Producers also will have to certify they meet the adjusted gross income limitation of $900,000 unless at least 75% of their income is derived from farming, ranching or forestry-related activities. Producers must be in compliance with Highly Erodible Land and Wetland Conservation program provisions.

 

 

Producers can apply for assistance beginning May 26, 2020. Additional information and application forms can be found at https://www.farmers.gov/cfap. Producers of all eligible commodities must apply through their local Farm Service Agency (FSA) office.

 

Documentation to support the producer’s application and certification may be requested. FSA has streamlined the signup process so it does not require an acreage report at the time of application. Applications will be accepted through Aug. 28, 2020.

 

 

The $125,000 per commodity limit is eliminated but keeps the $250,000 per recipient limit on payments. The USDA will pay out only 80% of the maximum direct payment initially, reserving the remaining 20% in case funding is used up. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date as funds remain available.

 

Contact your local FSA office for more information. Information also can be found at https://www.farmers.gov/coronavirus.