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USDA Supports Coronavirus Food Assistance Program

May. 20 2020 Community By Cathie Hartung

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Coronavirus Food Assistance Program

Are you a farmer or rancher whose operation has been directly impacted by the coronavirus pandemic? The Coronavirus Food Assistance Program will provide direct relief to producers who faced price declines and additional marketing costs due to COVID-19.

About the Coronavirus Food Assistance Program

USDA Secretary Sonny Perdue announced the Coronavirus Food Assistance program on April 17, 2020. CFAP will use funding and authorities provided in the Coronavirus Aid, Relief, and Economic Security Act, the Families First Coronavirus Response Act, and other USDA existing authorities. This $19 billion immediate relief program includes direct support to agricultural producers as well as the Farmers to Families Food Box Program.

CFAP will provide vital financial assistance to producers of agricultural commodities who have suffered a five-percent-or-greater price decline or who had losses due to market supply chain disruptions due to COVID-19 and face additional significant market costs. Eligible commodities include:

  • Non-specialty Crops: malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat, and hard red     spring wheat 

  • Wool

  • Livestock:     cattle, hogs, and sheep (lambs and yearlings only)

  • Dairy

  • Specialty Crops 

  • Fruits: apples, avocados, blueberries, cantaloupe, grapefruit, kiwifruit, lemons, oranges, papaya, peaches, pears, raspberries, strawberries, tangerines, tomatoes, watermelons

  • Vegetables: artichokes, asparagus, broccoli, cabbage, carrots, cauliflower, celery, sweet corn, cucumbers, eggplant, garlic, iceberg lettuce, romaine lettuce, dry onions, green onions, peppers, potatoes, rhubarb, spinach, squash, sweet potatoes, taro

  • Nuts: almonds, pecans, walnuts 

  • Other: beans, mushrooms

USDA will consider additional crops to be eligible for CFAP by collecting information on potentially eligible crops.

Eligible farmers and ranchers will receive one CFAP payment, drawn from two possible funding sources. The first source of funding is $9.5 billion in appropriated funding provided in the CARES Act and compensates farmers for losses due to price declines that occurred between mid-January 2020, and mid-April 2020 and for specialty crops for product that was shipped and spoiled or unpaid product. 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.

Beginning May 26, USDA's Farm Service Agency will be accepting applications from agricultural producers who have suffered losses. The application form and a payment calculator for producers will be available online once signup begins. A video preview of the payment calculator is currently available.

To learn more about CFAP, download the final rule and the cost-benefit analysis.

Program details specific to agricultural commodities. Please visit the USDA CFAP website for additional details:

Non-Specialty Crops. CFAP payments are eligible to producers of non-specialty crops who have suffered a five percent-or-greater price decline over a specified time as a result of the COVID-19 pandemic, and who face increased marketing costs for inventories. Visit farmers.gov/cfap/non-specialty for more information on CFAP eligibility and payment details related to non-specialty crops.

Wool. CFAP payments are eligible to wool producers who have suffered a five percent-or-greater price decline over a specified time as a result of the COVID-19 pandemic, and who face increased marketing costs for inventories.

Livestock. CFAP assistance is available to livestock producers who have an ownership interest in eligible livestock that have suffered a five percent-or-greater price decline as a result of the COVID-19 pandemic and face additional significant costs in marketing their inventories due to unexpected surplus and disrupted markets. Livestock eligible for CFAP include cattle, hogs, and sheep (lambs and yearlings only). Visit farmers.gov/cfap/livestock for more information on CFAP eligibility and payment details related to livestock.

Dairy. CFAP payments are eligible to all dairy operations with milk production in January, February, and/or March 2020. Any dumped milk production during the months of January, February, and March 2020 is eligible for assistance. However, any milk production that is not subject to price risk for any time during January, February and/or March is ineligible.

Specialty Crops. Producers of specialty crops are eligible for CFAP payments. Visit farmers.gov/cfap/specialty for more information on CFAP eligibility and payment details related to specialty crops.

CFAP Eligibility

Eligible producers (person or legal entity) of specified agricultural commodities outlined above who have suffered a five percent-or-greater price decline as a result of the COVID-19 pandemic, and who face substantial marketing costs for inventories, are eligible for CFAP payments.

To be eligible for payments, a person or legal entity must have an average adjusted gross income of less than $900,000 for tax years 2016, 2017, and 2018. However, if 75 percent of their adjusted gross income comes from farming, ranching, or forestry, the AGI limit of $900,000 does not apply.

Persons and legal entities also must:

  • comply with the     provisions of the “Highly Erodible Land and Wetland Conservation”     regulations, often called the conservation compliance provisions;

  • if a foreign     person, provides land, capital, and a substantial amount of active     personal labor to the farming operation; and   

  • not have a     controlled substance violation.

 CFAP Payment Limitations and Structure

Payment Limitations

CFAP payments are subject to a per person and legal entity payment limitation of $250,000. This limitation applies to the total amount of CFAP payments made with respect to all eligible commodities.

Unlike other FSA programs, special payment limitation rules will be applied to participants that are corporations, limited liability companies, and limited partnerships (corporate entities). These corporate entities may receive up to $750,000 based upon the number of shareholders (not to exceed three shareholders) who contribute at least 400 hours of active person management or personal active labor.  

For a corporate entity:

  • With one such     shareholder the payment limit for the entity is $250,000;

  • With two such     shareholders, the payment limit for the entity is $500,000 if at     least two members contribute substantial labor or management with     respect to the operation of the corporate entity; and    

  • With three     such shareholders, the limit is $750,000 if at least three members     contribute substantial labor or management with respect to the     operation of the corporate entity.

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. 

Ineligible Commodities

Commodities that did not suffer a five percent-or-greater price decline from mid-January 2020 to mid-April 2020 are not eligible for CFAP. Specifically, this includes 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 (ELS) cotton, alfalfa, forage crops, hemp, and tobacco. However, for all commodities except for hemp and tobacco, USDA may reconsider the excluded commodities if credible evidence is provided that supports a five percent price decline.

Request for Additional Commodities

USDA will consider additional crops to be eligible for CFAP by collecting information on potentially eligible crops. 

Producers of commodities not included on the original CFAP list who believe they’ve suffered a five percent-or-greater price decline between January and April 2020, and who face additional marketing costs due to COVID-19, may submit comments to provide information about additional commodities. 

USDA is particularly interested in the obtaining information with respect to the following specific categories of agricultural commodities. Read more about this request for information.

How to Prepare

USDA will begin taking applications for CFAP on May 26. While the application process has not started, you can start gathering and understanding your farm’s recent sales and inventory.

Your local FSA staff will work with you to apply for the program. Please do not send any personal information to USDA without first initiating contact through a phone call. We take your privacy and security of your information very seriously. You can find contact information for your local USDA Service Center at the bottom of the page.

How to Apply Once Signup Begins

USDA Service Centers are open for business by phone appointment only. Once the application period opens, please call your FSA county office to schedule an appointment.

FSA staff at local USDA Service Centers will work with producers to file applications. Applications will be submitted electronically either by scanning, emailing, or faxing. Please call your office prior to sending applications electronically.

In addition to the application form, our staff will work with you to complete portions of the CCC-902 – Farm Operating Plan – if necessary. Additionally, will be needed for CFAP; if you are an existing customer, this information is likely on file at your local Service Center. 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.

New to the Farm Service Agency?

FSA has county offices located at USDA Service Centers across the country. To find your office use the service locator at the bottom of the page.

 CFAP and Small Business Administration Programs

Participation in SBA’s Paycheck Protection Program (PPP) or Economic Injury Disaster Loan program does not impact producer eligibility for CFAP or for any USDA farm program. The PPP duplicate benefit provision does not have an impact on FSA farm programs or farm loan programs.

Resources 

  • Frequently     Asked Questions: These include recent questions that we have     received from producers. They were last updated on May 19, 2020.

  • Stakeholder     Toolkit: USDA encourages producers and agricultural     groups to share information with those in their network. This     toolkit includes an article, an infographic, and social media posts.   

  • CFAP     Prepare Now Infographic: This infographic shares what     producers can do now to prepare for applying for CFAP.

  • CFAP     Introductory Webinar: This webinar hosted by USDA’s     Farm Service Agency and Agricultural Marketing Service provides     basic information on how producers can prepare for the upcoming     signup for CFAP.

 USDA Farmers to Families Food Box Program

Beyond direct support to farmers and ranchers, through this program, USDA’s Agricultural Marketing Service is partnering with national, regional, and local suppliers, whose workforce has been significantly impacted by the closure of restaurants, hotels, and other food service businesses, to purchase up to $3 billion in fresh produce, dairy, and meat products. The program will purchase $461 million in fresh fruits and vegetables, $317 million in a variety of dairy products, $258 million in meat products, and $175 million in a combination box of fresh produce, dairy, or meat products. Suppliers will package these products totaling $1.2 billion into family-sized boxes, then transport them to food banks, community and faith-based organizations, and other non-profits serving Americans in need from May 15 through June 30, 2020. AMS may elect to extend the period of performance of the contracts, via option periods, dependent upon program success and available remaining funds, up to $3 billion. More information is available at www.usda.gov/farmers-to-families.

 Broader USDA Efforts

In addition to CFAP, USDA has other programs and services available to farmers impacted by the coronavirus pandemic. Learn more at farmers.gov/coronavirus.

SOURCE: Taken directly from USDA Website: https://www.farmers.gov/cfap