On September 18, 2020, President Donald J. Trump and U.S. Secretary of Agriculture Sonny Perdue announced an additional $14 billion for agricultural producers who continue to face market disruptions and associated costs because of COVID-19. This is the second round of COVID assistance relief through the Coronavirus Food Assistance Program (CFAP), or “CFAP 2”.
Below are a few key items to note:
- USDA has determined that CFAP 1 and CFAP 2 are separate programs. USDA’s first CFAP program was designed to address disruptions that had occurred by April 15, 2020. CFAP 2 payments are intended to address the disruptions that have occurred since then. As a result, CFAP 1 payments will not impact how CFAP 2 payments are calculated, and two separate payment limits will be in effect.
- For price-triggered livestock, payments will be based on a fixed number of head, which is defined as the lower of the maximum owned inventory of eligible livestock, excluding breeding stock, on a date selected by the eligible producer from April 16, 2020, through August 31, 2020, or a specific number of head (4,546 head of cattle or 10,870 head of hogs, for example). Cattle payments can be calculated by multiplying the maximum number of head by the payment rate (for example, if you have 325 head eligible, you should expect to receive $17,875).
- Commodities not eligible for CFAP 2 include: Hay, except for alfalfa, crops intended for grazing, and animals raised for breeding stock. USDA’s FAQ elaborates: the payments to livestock are focused on market inventory because there are limited funds available for CFAP 2 and the Commodity Credit Corporation (CCC) authority that fully funds the program is meant to assist with costs associated with market disruptions. Breeding stock is typically kept for many years and therefore their value is less likely to be impacted by temporary price impacts. Non-breeding animals are more likely to be sold and therefore more likely impacted by market value changes.
Cattle Payments
The CFAP 2 payment rate for eligible beef cattle is $55 per head. Payments will be based on the maximum owned inventory of eligible livestock, excluding breeding stock, on a date selected by the producer, between Apr. 16, 2020 and Aug. 31, 2020.
Eligibility
There is a payment limitation of $250,000 per person or entity for all commodities combined. Applicants who are corporations, limited liability companies, limited partnerships may qualify for additional payment limits when members actively provide personal labor or personal management for the farming operation. In addition, this special payment limitation provision has been expanded to include trusts and estates for both CFAP 1 and 2. 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 Sept. 21, 2020. Applications will be accepted through Dec. 11, 2020. Additional information and application forms can be found at farmers.gov/cfap
Documentation to support the producer’s application and certification may be requested. All other eligibility forms, such as those related to adjusted gross income and payment information, can be downloaded from farmers.gov/cfap/apply. For existing FSA customers, including those who participated in CFAP 1, many documents are likely already on file. Producers should check with their FSA county office to see if any of the forms need to be updated. Customers seeking one-on-one support with the CFAP 2 application process can call 877-508-8364 to speak directly with a USDA employee ready to offer assistance. This is a recommended first step before a producer engages with the team at the FSA county office.
More details are available on the USDA’s CFAP website: farmers.gov/cfap/livestock.