USDA provides details of direct assistance to farmers through CFAP
U.S. Secretary of Agriculture Sonny Perdue announced details of the Coronavirus Food Assistance Program (CFAP), which will provide up to $16 billion in direct payments to deliver relief to America’s farmers and ranchers impacted by the coronavirus pandemic.
In addition to this direct support to farmers and ranchers, USDA’s Farmers to Families Food Box program is partnering with regional and local distributors, whose workforces have been significantly impacted by the closure of many restaurants, hotels, and other foodservice entities, to purchase $3 billion in fresh produce, dairy, and meat and deliver boxes to Americans in need.
“America’s farming community is facing an unprecedented situation as our nation tackles the coronavirus. President Trump has authorized USDA to ensure our patriotic farmers, ranchers, and producers are supported and we are moving quickly to open applications to get payments out the door and into the pockets of farmers,” said Secretary Perdue. “These payments will help keep farmers afloat while market demand returns as our nation reopen and recover. America’s farmers are resilient and will get through this challenge just like they always do with faith, hard work, and determination.”
Beginning May 26, the U.S. Department of Agriculture (USDA), through the Farm Service Agency (FSA), will be accepting applications from agricultural producers who have suffered losses.
“This aid can’t arrive soon enough as many farmers file for bankruptcy, facing unprecedented losses. We are grateful to the Administration and to Congress for sending aid to America’s farmers and ranchers reeling from the breakdown in distribution channels resulting from COVID-19. Although supply is strong, the shutdown of restaurants and school cafeterias caused the markets for meat, dairy and produce to shrink drastically almost overnight," said American Farm Bureau Federation President Zippy Duvall.
Duvall said the CFAP is critically important, but the long-term effects of this pandemic are still rippling through the farm economy.
"The livestock sector is a prime example. As America begins to reopen for business, it’s imperative that we ensure the nation’s farms and ranches are able to hold on through this season and next to help put this country back on the road to recovery,” Duvall said.
CFAP payments will go directly to farmers who have suffered a 5 percent or greater price loss and who are facing significant marketing costs due to the coronavirus. Eligible commodities include cattle, hog, dairy, specialty crops and row crops. Payments will be limited to $250,000 per person.
Farmers and ranchers will receive direct support, drawn from two possible funding sources. The first source of funding 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 and provides support for specialty crops for a product that had been shipped from the farm between 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 on-going market disruptions.
Non-Specialty Crops and Wool
Non-specialty crops eligible for CFAP payments include malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat, and hard red spring wheat. Wool is also eligible. Producers will be paid based on inventory subject to price risk held as of January 15, 2020. A payment will be made based on 50 percent of a producer’s 2019 total production or the 2019 inventory as of January 15, 2020, whichever is smaller, multiplied by the commodity’s applicable payment rates.
Livestock eligible for CFAP include cattle, lambs, yearlings, and hogs. The total payment will be calculated using the sum of the producer’s number of livestock sold between January 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.
For dairy, the total payment will be calculated based on a producer’s certification of milk production for the first quarter of the 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.
For eligible specialty crops, the total payment will be based on the volume of production sold between January 15 and April 15, 2020; the volume of production shipped, but unpaid; and the number of acres for which harvested production did not leave the farm or mature product destroyed or not harvested during that same time period, and which have not and will not be sold. Specialty crops include, but are not limited to, almonds, beans, broccoli, sweet corn, lemons, iceberg lettuce, spinach, squash, strawberries, and tomatoes. A full list of eligible crops can be found on farmers.gov/cfap. Additional crops may be deemed eligible at a later date.
There is a payment limitation of $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 where members actively provide personal labor or personal management for the farming operation. Producers will also have to certify they meet the Adjusted Gross Income limitation of $900,000 unless at least 75 percent or more of their income is derived from farming, ranching, or forestry-related activities. Producers must also be in compliance with Highly Erodible Land and Wetland Conservation provisions.
Your local FSA staff will work with you to apply for the program, and will asking for this type of information:
- Personal, including your Tax Identification Number
- Farming operating structure
- Adjusted Gross Income to ensure eligibility
- Direct deposit to enable payment processing
Applying for Assistance
Producers can apply for assistance beginning on May 26, 2020. Additional information and application forms can be found at farmers.gov/cfap. Producers of all eligible commodities will apply through their local FSA offices. Documentation to support the producer’s application and certification may be requested. FSA has streamlined the signup process to not require an acreage report at the time of application and a USDA farm number may not be immediately needed. Applications will be accepted through August 28, 2020.
To ensure the availability of funding throughout the application period, producers will receive 80 percent of their maximum total payment upon approval of the application. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date as funds remain available. USDA Service Centers are open for business by phone appointment only, and fieldwork will continue with appropriate social distancing. While program delivery staff will continue to come into the office, they will be working with producers by phone and using online tools whenever possible. All Service Center visitors wishing to conduct business with the FSA, Natural Resources Conservation Service, or any other Service Center agency are required to call their Service Center to schedule a phone appointment. More information can be found at farmers.gov/coronavirus.