U.S. Secretary of Agriculture Sonny Perdue recently announced details of the Coronavirus Food Assistance Program (CFAP). CFAP will provide up to $16 billion in direct payments to America’s farmers and ranchers impacted by the pandemic. The rule announced Tuesday eliminates the $125,000 per commodity limit but keeps the $250,000 per recipient limit on payments.  USDA will only pay out 80% of the maximum direct payment initially. The remaining 20% is reserve in case funding for the program runs out.  Furthermore, the remainder of the CFAP payment will occur at a later date. USDA did not indicate when they would make those second tranche payments.

Beginning May 26, the U.S. Department of Agriculture (USDA), through the Farm Service Agency (FSA), will accept applications from agricultural producers who have suffered losses.

Details of CFAP Payments

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. In addition, wool is also eligible. A producer will receive payment based on inventory subject to price risk held as of January 15, 2020. A payment will be made based 50 percent of a producer’s 2019 total production or the 2019 inventory as of January 15, 2020, whichever is smaller. After that, the number is multiplied by the commodity’s applicable payment rates. Visit farmers.gov/cfap/non-specialty for more information on CFAP eligibility and payment details related to non-specialty crops.

Livestock

Livestock eligible for CFAP include cattle, lambs, yearlings and hogs. You calculate the total payment by 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. Visit farmers.gov/cfap/livestock for more information on CFAP eligibility and payment details related to livestock.

Dairy

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. You then multiply that number by a national price decline during the same quarter. In addition, the second part of the payment is based a national adjustment to each producer’s production in the first quarter.

Specialty Crops

Several factors will affect the total payment for eligible specialty crops. First, the volume of production sold between January 15 and April 15, 2020. Next, the volume of production shipped but unpaid and the number of acres for which harvested production did not leave the farm. This also includes mature product destroyed or not harvested during that same time in which it has not or will not sell. Specialty crops include, but are not limited to, almonds, beans, broccoli, sweet corn, lemons, iceberg lettuce, spinach, squash, strawberries and tomatoes. Visit farmers.gov/cfap/specialty for more information on CFAP eligibility and payment details related to specialty crops.

Eligibility

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 derives from farming, ranching or forestry-related activities. The producer must maintain compliance with Highly Erodible Land and Wetland Conservation provisions as well.

Applying for Assistance

Producers can apply for assistance beginning on May 26, 2020. Additional information and application forms are available at farmers.gov/cfap. Producers of all eligible commodities will apply through their local FSA office.  Requesting documentation to support the producer’s application and certification may occur. FSA has streamlined the signup process that may not require an acreage report at the time of application as well as a USDA farm number. They are accepting applications through August 28, 2020.

Payment Structure

Availability of funding throughout the application period is very important. Therefore,  producers will receive 80 percent of their maximum total payment upon approval of the application. In addition, the remaining portion of the payment, not to exceed the payment limit, will pay out later as funds remain available. In conclusion, you can find additional program details and payment structure tables here.

USDA to provide relief to producers in response to the COVID-19 pandemic.