USDA announces details of Coronavirus Food Assistance Program
Beginning May 26, the U.S. Department of Agriculture (USDA), through its Farm Service Agency (FSA), will begin accepting applications from farmers and ranchers whose markets have been negatively impacted by the coronavirus pandemic. The USDA will provide up to $16 billion in direct payments to eligible producers through the Coronavirus Food Assistance Program (CFAP).
CFAP provides vital financial assistance to producers of ag commodities that have suffered a 5% 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 funds appropriated 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. This funding 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. 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.
How payments will be determined:
• Non-Specialty Crops and Wool - Non-specialty crops eligible for CFAP payments include upland cotton, corn, soybeans, canola, oats, sorghum, durum wheat, hard red spring wheat, malting barley, millet and sunflowers. 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% 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, yearlings, hogs and lambs. 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 on 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 Jan. 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 www.farmers.gov/cfap. Additional crops may be deemed eligible at a later date.
There is a payment limit 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.
Additional information and application forms can be found at www.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.
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; field work will continue with appropriate social distancing. More information can be found at www.farmers.gov/coronavirus.
In addition to the application form, farmers may be required to complete portions of Form CCC-902 (Farm Operating Plant). The following forms will be needed for CFAP; for existing customer FSA customers, this information is likely on file at their local service center:
• CCC-901 (Also Available in Spanish) – Identifies members of a farm or ranch that is a legal entity. Member information will be completed by legal entities and joint operations to collect member names, addresses, and Tax Identification Numbers, and citizenship status;
• CCC-941 (Also Available in Spanish) – Reports average adjusted gross income for programs where income restrictions apply;
• CCC-942 – If applicable, this certification reports income from farming, ranching and forestry, for those exceeding the adjusted gross income limitation;
• AD-1026 (Also Available in Spanish) – Ensures compliance with highly erodible land conservation and wetland conservation;
• AD-2047 – Provides basic customer contact information;
• SF-3881 – Collects banking information to allow USDA to make payments via direct deposit.
FSA does not require an acreage report at the time of application and a USDA farm number may not be immediately needed.
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 food service entities, to purchase $3 billion in fresh produce, dairy, and meat and deliver boxes to Americans in need.