U.S. Secretary of Agriculture Sonny Purdue presented details regarding the $16 billion Coronavirus Food Assistance Program (CFAP) for agriculture producers, on Monday, May 19.
The allocated $16 million in direct assistance through the CFAP will become available to producers through a Farm Service Agency Application process, beginning May 26.
“America’s farming community is facing an unprecedented situation as our nation tackles the coronavirus. President Trump has authorized USDA to ensure our patriotic farmers, ranchers and producers are supported and we are moving quickly to open applications to get payments out the door and into the pockets of farmers,” Purdue said in a press released by the USDA.
Financial assistance values will be determined on and individual basis through a process of providing compensation based on actual price losses due to COVID-19, market drops.
“It (CFAP)is unique as it scales to the size of the individual operation, and can help regain some of these price losses,” Jessica Groskopf, UNL extension educator for agricultural economics, said.
This agriculture relief program will provide financial assistance to those who have suffered a five percent or greater price decline, Groskopf said.
According to the USDA, the five percent losses involve COVID-19 impacts on commodity markets as a result of lower demand, also including surplus production, shipping pattern disruption and disruptions to the marketing of commodities.
“This is the first time in history livestock producers have turned to the government for assistance and it really demonstrates the tremendous loss they have suffered in the last few months,” Jessica Herrmann, Nebraska Cattlemen vice president of legal and government affairs, said.
Through the assistance program, livestock, non-specialty crops, wool, dairy, and select specialty crops will be eligible for direct assistance.
“I think the intent of CFPA is to make agriculture producers whole again after these tremendous losses,” Herrmann said.
Livestock eligible for assistance includes cattle, lambs, yearlings and hogs, which will be calculated using USDA specified guidelines to determine producer financial assistance amounts.
The total payment will be calculated using the sum of the producer’s number of livestock sold between Jan. 15 and April 15, multiplied by the payment rates per head, and the highest inventory number of livestock between April 16 and May 14, multiplied by the payment rate per head, according to a USDA press release.
In terms of crops, USDA assistance calculations differ between the categorizations of non-specialty crops and specialty crops.
According to the USDA, non-specialty crops include malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat, and hard red spring wheat.
Non-specialty crops eligible for CFAP payments ... will be paid based on inventory subject to price risk held as of Jan. 15. A payment will be made based 50% of a producer’s 2019 total production or the 2019 inventory as of Jan. 15, whichever is smaller, multiplied by the commodity’s applicable payment rates, according to a USDA press release.
Specialty crops, according to the USDA, include but are not limited to almonds, beans, broccoli, sweet corn, lemons, iceberg lettuce, spinach, squash, strawberries, tomatoes and more which can be found on farmers.gov/cfap, along with additional crops which may be deemed at a later date.
For eligible specialty crops, the total payment will be based on the volume of production sold between Jan. 15 and April 15; 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, according to a USDA press release.
Financial assistance for dairy producers falls into its own category determined by the USDA.
“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,” said the USDA press release.
Groskopf said at this time, hay is not involved in CFPA, but there may be an opportunity for hay to be added into the specialty crop categorization at a later date.
“I told a hay producer who contacted me this morning to keep detailed record of his production, just as any good business would, if it (hay) does become available for direct assistance in the future,” Groskopf said.
Groskopf and Herrmann said documentation for producers to apply for CFPA will be clarified and determined by the local FSA.
“My understanding is the application documentation will be determined by the local Farm Service agency,” Herrmann said.
Groskopf said she recommends producers to keep scale tickets, sale records and storage numbers, in order to make the documentation and application process easier.
Per usual, a USDA payment limitation of $250,000 per person or entity will be applied to CFPA, Groskopf said.
Applicants who are corporations, limited liability companies or limited partnerships have the ability to receive additional payment if members actively provide personal labor or management of the farming operation, according to the USDA.
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.
Herrmann said it is clear to see producers need help after being subject to tremendous losses. She said she remains hopeful that this program can fill some gaps left by price losses over the recent months.