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Coronavirus

USDA confirms $14b in CFAP2 aid for farmers

USDA confirms $14b in CFAP2 aid for farmers
Payments will be made for price trigger commodities, flat-rate crops and sales commodities.

On Friday morning, the U.S. Department of Agriculture confirmed details of its second tranche of coronavirus assistance payments for farmers. USDA will provide an additional $14 billion for agricultural producers who continue to face market disruptions and associated costs because of COVID-19. Signup for the Coronavirus Food Assistance Program (CFAP) will begin Sept. 21 and run through Dec. 11, 2020.

“We listened to feedback received from farmers, ranchers and agricultural organizations about the impact of the pandemic on our nations’ farms and ranches, and we developed a program to better meet the needs of those impacted,” the agency said.

USDA will use funds being made available from the Commodity Credit Corp. (CCC) Charter Act and the Coronavirus Aid, Relief & Economic Security (CARES) Act to support row crops, livestock, specialty crops, dairy, aquaculture and many additional commodities. USDA has incorporated improvements in tranche 2 of CFAP (CFAP 2) based from stakeholder engagement and public feedback to better meet the needs of the affected farmers and ranchers.

Producers can apply for CFAP 2 at USDA’s Farm Service Agency (FSA) county offices. This program provides financial assistance that gives producers the ability to absorb increased marketing costs associated with the COVID-19 pandemic. Producers will be compensated for ongoing market disruptions and assisted with the associated marketing costs.

CFAP 2 payments will be made for three categories of commodities: price trigger commodities, flat-rate crops and sales commodities.

Price trigger commodities

Price trigger commodities are major commodities that meet a minimum 5% price decline over a specified period of time. Eligible price trigger crops include barley, corn, sorghum, soybeans, sunflowers, upland cotton and all classes of wheat. Payments will be based on 2020 planted acres of the crop, excluding prevented planting and experimental acres. Payments for price trigger crops will be the greater of: (1) the eligible acres multiplied by a payment rate of $15 per acre or (2) the eligible acres multiplied by a nationwide crop marketing percentage, multiplied by a crop-specific payment rate and then by the producer’s weighted 2020 actual production history (APH) approved yield. If the APH is not available, 85% of the 2019 Agriculture Risk Coverage-County Option benchmark yield for that crop will be used.

For broilers and eggs, payments will be based on 75% of the producer's 2019 production.

Dairy payments will be based on actual (cow’s) milk production from April 1 to Aug. 31, 2020. Milk production for Sept. 1 to Dec. 31, 2020, will be estimated by FSA.

Eligible beef cattle, hogs, pigs, lambs and sheep payments will be based on the maximum owned inventory of eligible livestock, excluding breeding stock, on a date selected by the producer between April 16 and Aug. 31, 2020.

“We are pleased to see that USDA is using unspent funds in the Coronavirus Food Assistance Program to provide further relief to cattle producers who have been hit hardest by the COVID-19 pandemic," National Cattlemen’s Beef Assn. (NCBA) vice president of government affairs Ethan Lane said. "The initial CFAP payments served as an important stopgap in the immediate wake of the coronavirus. Unfortunately, many in our industry are still reeling from abnormal marketing decisions they were forced to make in the spring, unprecedented supply chain disruptions and an overall tumultuous farm economy.

“CFAP’s incurred loss payments had the potential to deliver a tremendous amount of relief, but an arbitrary cutoff date left many producers out in the cold. Put simply, April 15 marked the height of this crisis, and many producers incurred losses just as severe following part 1 deadline as the days leading up to it. Further, the part 2 inventory payment rate failed to deliver assistance equitably when compared with the rate for incurred losses,” Lane added. “While USDA’s announcement is an important next step, NCBA is calling on Congress to eliminate CFAP’s remaining disparities and deliver to our nation’s ranchers and farmers the support they so badly need in the next coronavirus package.”

Flat-rate crops

Crops that either do not meet the 5% price decline trigger or do not have data available to calculate a price change will have payments calculated based on eligible 2020 acres multiplied by $15 per acre. These crops include alfalfa, extra-long staple cotton, oats, peanuts, rice, hemp, millet, mustard, safflower, sesame, triticale, rapeseed and several others.

Sales commodities

Sales commodities include specialty crops; aquaculture; nursery crops and floriculture; other commodities not included in the price trigger and flat-rate categories, including tobacco; goat's milk; mink (including pelts); mohair; wool, and other livestock (excluding breeding stock) not included under the price trigger category that were grown for food, fiber, fur or feathers. Payment calculations will use a sales-based approach, where producers are paid based on five payment gradations associated with their 2019 sales.

Additional commodities are eligible for CFAP 2 that weren’t eligible in the first iteration of the program. An agricultural operation that has been affected by the pandemic since April 2020 is encouraged to apply for CFAP 2. A complete list of eligible commodities, payment rates and calculations can be found on farmers.gov/cfap.

Eligibility

There is a payment limitation of $250,000 per person or entity for all commodities combined. Applicants from corporations, limited liability companies or limited partnerships may qualify for additional payment limits when members actively provide personal labor or personal management for the farming operation. In addition, this special payment limitation provision has been expanded to include trusts and estates for both the first and second tranches of CFAP.

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

Applying for assistance

Producers can apply for assistance beginning Sept. 21, 2020. Applications will be accepted through Dec. 11, 2020.

Additional information and application forms can be found at farmers.gov/cfap. Documentation to support the producer’s application and certification may be requested. All other eligibility forms, such as those related to adjusted gross income and payment information, can be downloaded from farmers.gov/cfap/apply. For existing FSA customers, including those who participated in the first CFAP round, many documents are likely already on file. Producers should check with FSA county office to see if any of the forms need to be updated.

Customers seeking one-on-one support with the CFAP 2 application process can call 877-508-8364 to speak directly with a USDA employee who is ready to offer assistance. This is a recommended first step before a producer engages with the team at the FSA county office.

All USDA Service Centers are open for business, including some that are open to visitors to conduct business in person, by appointment only. All Service Center visitors wishing to conduct business with FSA, the Natural Resources Conservation Service or any other Service Center agency should call ahead and schedule an appointment. Service Centers that are open for appointments will pre-screen visitors based on health concerns or recent travel, and visitors must adhere to social distancing guidelines. Visitors are also required to wear a face covering during their appointment. Program delivery staff will be in the office and will be working with producers in the office, by phone and via online tools. More information can be found at farmers.gov/coronavirus.

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