Policy Update: USDA Unveils Details of Coronavirus Food Assistance Program
On Tuesday, May 19, USDA released details on the Coronavirus Food Assistance Program (CFAP), which will provide $16 billion in direct payments to producers. Starting on Tuesday, May 26, and remaining open through August, farmers and ranchers impacted by the pandemic can apply for financial assistance, with payments going out as soon as the beginning of June.
Producers can submit applications through their local USDA Farm Service Agency Service Center.
For more information on CFAP, go to https://www.farmers.gov/cfap.
CFAP details from USDA Press Release
- 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 marketing costs as a result of lower demand, surplus production, and disruptions to shipping patterns and marketing of commodities.
- Producers will receive direct support drawn from two funding sources:
- $9.5 billion provided by the Coronavirus Aid, Relief, and Economic Stability (CARES) Act to compensate farmers for losses due to price declines that occurred between mid-January and mid-April 2020, and provides support for specialty crops that had been shipped from the farm between the same time period, but subsequently spoiled due to loss of marketing channels.
- $6.5 billion from the Commodity Credit Corporation to compensate producers for losses due to ongoing market disruptions.
- Because need is likely to exceed available funding, payments will be prorated. 80% of the payment to a farmer or rancher will be made immediately, with the additional 20% provided if funds remain available. Despite this, it is likely that funding will run out, so producers are encouraged to apply as quickly as possible.
- Producers will have to certify that their adjusted gross income is less than $900,000 OR that at least 75% of their income is derived from farming, ranching or forestry.
- There is a $250,000 limit per producer. Agricultural entities (such as LLCs) with 3 or more actively-engaged partners are eligible to receive up to $750,000.
- This category includes most local, direct-to-market producers.
- Diversified operations will have to request compensation for each individual crop grown.
- Eligible specialty crop producers must have experienced one of the following:
- Sales with a price loss of 5% or more between January 15 and April 15, 2020.
- Eligible crops include, but are not limited to: Almonds, artichokes, beans, broccoli, cabbage, carrots, cauliflower, sweet corn, cucumbers, eggplant, lemons, iceberg and Romaine lettuce, dry onions, peaches, pears, pecans, peppers, rhubarb, spinach, squash, strawberries and tomatoes.
- Shipments that left the farm by April 15 and spoiled due to no market or for which no payment was received.
- All specialty crops are eligible.
- Shipments that have not left farm or mature crops that remained unharvested by April 15.
- All specialty crops are eligible.
- 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.
Other Eligible Products:
- Commodity Crops
- Malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat, and hard red spring wheat
- Payments will be based on inventory subject to price risk held as of January 15, 2020. A payment will be made based on 50% 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.
- Cattle, hogs, and sheep (lambs and yearlings only)
- 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.
- 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 a national adjustment to each producer’s production in the first quarter.
- Sheep more than two years old, eggs/layers, soft red winter wheat, hard red winter wheat, white wheat, rice, flax, rye, peanuts, feed barley, Extra Long Staple cotton, alfalfa, forage crops, hemp, and tobacco.
- USDA may reconsider the excluded commodities if credible evidence is provided that supports a 5% price decline.
Other Aspects of CFAP:
- $3 billion will go towards purchasing commodities (produce, meat, and dairy products) and sending them to food banks and other community organizations, also known as the “Farmers to Families Food Box Program.”
- Separate from CFAP, USDA will also spend an additional $873.3 million in Section 32 purchases of specialty crops products for distribution to food banks. The use of these additional Section 32 funds will be determined by industry requests, USDA agricultural market analysis and food bank needs.