Written by Sage Saffran, Public Policy Intern, NASDA
The U.S. Department of Agriculture (USDA) is implementing a second round of the Coronavirus Food Assistance Program (CFAP 2). Producers began applying for assistance under CFAP 2 on Sept. 21, 2020. Applications will be accepted through Dec. 11, 2020.
The USDA will use funds being made available from the Commodity Credit Corporation (CCC) and CARES Act to support row crops, livestock, specialty crops, dairy, aquaculture, and many additional commodities.
- USDA has incorporated improvements in CFAP 2 based on stakeholder engagement and public feedback to better meet the needs of impacted farmers and ranchers.
- Specifically, NASDA advocated for and secured the inclusion of aquaculture as an eligible commodity for CFAP 2.
The Farm Service Agency (FSA) is charged with implementing CFAP 2. Producers will be compensated for ongoing market disruptions and assisted with the associated marketing costs.
- Producers can apply for CFAP 2 at USDA’s Farm Service Agency (FSA) county offices.
- Payments to eligible producers will be issued when applications are approved.
- Net payments from the CCC to producers are estimated at$13.21 billion Additional information and application forms can be found at farmers.gov/cfap.
- For existing FSA customers, including those who participated in CFAP 1, many documents are likely already on file.
- Producers should check with FSA county office to see if any of the forms need to be updated.
Participation in CFAP2 is subject to payment limitations 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 when members actively provide personal labor or personal management for the farming operation. 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% 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.
- While additional commodities were made eligible under CFAP2, those not yet designated can still petition to be included.
- Eligible commodities under CFAP 2 can be found at https://www.farmers.gov/cfap/commodities. This page also lists those commodities designated as ineligible.
- USDA indicated that if an agricultural operation has been impacted by the pandemic since April 2020, they are still encouraged to apply for CFAP2.
Economic Relief for the Food and Agriculture Sector
CFAP2 payments will be broken into three categories:
Price trigger commodities
- This category includes corn, soybeans, wheat (all classes), upland cotton, barley, sorghum, sunflowers, dairy, beef cattle, hogs and pigs, broilers, eggs, and lambs and sheep.
- The approach to calculating CFAP 2 payments is very similar to that used for CFAP 1 (which covered Quarter 1 of 2020), although the focus now is on Quarter 2 (Q2) through Quarter 4 (Q4) of calendar 2020.
- CFAP payment rates are based on the price decline calculated between mid-January and late-July and use an 80 percent coverage factor. Depending on the yield for a given producer’s crop in this category, the payment may calculate to less than $15 per acre. In such cases, the payment is raised to $15 per acre, which is the payment for the flat-rate category discussed below.
- The commodity must have suffered a 5%-or-greater national price decline based on a comparison of the average prices for the weeks of Jan. 13-17, 2020, and July 27-31, 2020.
- Either do not meet the 5%-or-greater national price decline trigger noted above or do not have data available to calculate a price change.
- These row crops without price information will be eligible for a $15-per-acre base payment. These crops either do not meet the 5-percent price decline trigger noted above or do not have data available to calculate a price change.
- These crops include alfalfa, Extra Long Staple (ELS) cotton, oats, peanuts, and rice as well as crops with relatively small acreage—such as hemp, millet, mustard, safflower, sesame, triticale, rapeseed, and several others. Producers of these commodities receive a $15 per-acre payment based on their 2020 production.
- Include specialty crops, aquaculture and other commodities not included in the price trigger and flat-rate categories. For sales commodities, payment calculations will be based on a producer’s 2019 sales.
- This category includes fruits, vegetables, and nuts; dry edible beans, lentils, dry edible peas, and chickpeas; and commodities including aquaculture, turkeys, mink, mohair, rabbits, and others.
- Payment calculations will use a sales-based approach, where producers are paid based on five payment gradations associated with their 2019 sales.