U.S. Secretary of Agriculture Sonny Perdue announced details May 19 of the Coronavirus Food Assistance Program (CFAP), which will provide up to $16 billion in direct payments to deliver relief to farmers impacted by the coronavirus pandemic.
Farmers who suffered a 5% or greater price loss will be eligible for direct payments of up to $250,000 per person.
The aid program will include dairy farmers, livestock producers, fruit and vegetable growers and farmers of traditional row crops such as grains, soybeans and cotton.
Farmers will receive 80% of the payment upon approval of their application, which they can submit as soon as May 26.
Congress allocated money for farm aid in the last coronavirus relief package. The program includes $16 billion in direct payments to farmers and $3 billion for purchases of commodities including dairy products, meat and fruits and vegetables.
“America’s farming community is facing an unprecedented situation as our nation tackles the coronavirus,” Perdue said in a news release. “These payments will help keep farmers afloat while market demand returns as our nation reopens and recovers.”
Beginning May 26, the USDA, through the Farm Service Agency, will be accepting applications from agricultural producers who have suffered losses.
Producers will be paid based on inventory subject to price risk held as of Jan. 15, 2020. A payment will be made based on 50% of a producer’s 2019 total production or the 2019 inventory as of Jan. 15, 2020, whichever is smaller, multiplied by the commodity’s applicable payment rates.
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 Jan. 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.
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.
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% 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.
Producers can apply for assistance beginning on May 26. Additional information and application forms can be found at farmers.gov/cfap. Producers of all eligible commodities will apply through their local FSA office. 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 Aug. 28.
To ensure the availability of funding throughout the application period, producers will receive 80% 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.