Action Alert - 5/20/20

This alert was distributed via email to subscribers of the GFB Legislative Team's Action Alert on May 5, 2020.

White House & USDA Provide Details for Direct Payments Through Coronavirus Food Assistance Programs

On May 19, 2020, President Trump and USDA Secretary Sonny Perdue provided details for the Coronavirus Food Assistance Program (CFAP), which will provide roughly $16 billion in direct payments to farmers who have been impacted by the COVID-19 crisis. These payments are in addition to USDA’s Farmers to Families Food Box program, through which USDA is purchasing $3 billion in fresh produce, dairy, and meat for distribution to Americans in need. Below you will find information from a USDA press release outlining eligible commodities, payment structures and limitations, application instructions, and more.

You are encouraged to review the program details and also visit farmers.gov, where you will find several forms that will need to be completed and submitted to your local FSA office when sign up begins on May 26. USDA expects payments to begin going out to producers seven to ten days after sign up opens, and the sign up period will run through August 28, 2020.

Additionally, last Friday evening, the Small Business Administration (SBA) released its Loan Forgiveness Application for Payroll Protection Program participants. More information, including the form and detailed instructions, can be found below.

As always, please feel free to reach out to Georgia Farm Bureau’s Public Policy Department with any questions.

USDA: FARMERS AND RANCHERS TO RECEIVE DIRECT SUPPORT FOR LOSSES RELATED TO COVID-19

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.

Background

CFAP provides vital financial assistance to producers of agricultural commodities who have suffered a five-percent-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.

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 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 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

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.

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 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.

Specialty Crops

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.

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 is derived from farming, ranching or forestry-related activities. Producers must also be in compliance with Highly Erodible Land and Wetland Conservation provisions.

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 office. 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.

Payment Structure

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 field work 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.

SBA RELEASES LOAN FORGIVENESS APPLICATION FOR PAYCHECK PROTECTION PROGRAM

This past Friday evening, the Small Business Administration (SBA) released the Paycheck Protection Program (PPP) Loan Forgiveness Application Form. The form and detailed instructions can be found here.

Those who have participated in PPP will need to complete and submit this form to their lender to determine the amount of the loan that is forgiven. The obligation to complete and submit the forgiveness application form rests with the PPP participant, not the lending institution. If an application for loan forgiveness is not received the entire PPP amount received by the participant will continue to be treated as a loan. The SBA will be releasing additional guidance to assist borrowers complete the form. Borrowers will be able to begin submitting this application in mid-June.

According to the SBA, the form and instructions include:

Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles;
Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan;
Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness;
Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30; and
Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.

Farmers should consult with their accountant, tax preparer and/or financial advisor about the PPP Loan Forgiveness Application form to ensure all the proper documentation has been completed.

Public Policy Department Staff
Jeffrey Harvey, Director
Joe McManus, Assistant Director
Alex Bradford, State Affairs Coordinator
Raynor Churchwell, Agricultural Programs Specialist
Tripp Cofield, National Policy Counsel
Katie Duvall, Advocacy and Policy Development Coordinator
Renee Jones, Office Coordinator
Jeremy Taylor, Agricultural Programs Specialist