The U.S. Department of Agriculture (USDA) is now accepting applications for a second round of the Coronavirus Food Assistance Program (CFAP 2). The program will provide an additional $14 billion to farmers who are continuing to struggle with market disruptions and the related expenses associated with the COVID-19 pandemic.
CFAP 2 is funded by the Commodity Credit Corporation (CCC) Charter Act, as well as the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
CFAP 2 payments will be allocated to support three different types of agricultural commodities:
1. Price Trigger Commodities
Price trigger commodities are specific major commodities that meet a minimum 5% price decline over a defined period of time. Eligible price trigger commodities include:
- Crops (barley, corn, sorghum, soybeans, sunflowers, upland cotton and all classes of wheat)
- Livestock (beef cattle, hogs and pigs, lambs and sheep)
- Broilers and eggs
Payments for price trigger crops will be determined based on planted acres of the crop in 2020, not including prevented planting or experimental acres. The USDA has set defined payment rates per type of crop, which will be multiplied by the acreage and the Actual Production History (APH) approved yield. For example, the payment rate for soybeans is 31 cents per bushel and the rate for corn is 23 cents per bushel.
Payments for eligible livestock will be determined based on the maximum inventory of that livestock (excluding breeding stock) on a date selected by the producer between April 16 and August 31, 2020. The payment rates for livestock are:
- Beef cattle: $55/head
- Hogs and pigs: $23/head
- Lambs and sheep: $27/head
Payments for dairy will be based on actual milk production between April 1 and August 31, 2020. The milk production for September 1 through December 31, 2020 will then be estimated by the USDA Farm Service Agency (FSA).
Broilers and egg payments will be determined based on 75% of the producer’s production in 2019.
2. Flat-Rate Crops
Flat-rate crops are those that either don’t have a 5% price decline or don’t have data available to determine a price decline percentage. These include alfalfa, oats, peanuts, rice, hemp and several others.
Payments for flat-rate crops will be determined by multiplying eligible 2020 acres by $15 per acre.
3. Sales Commodities
Sales commodities include specialty crops that are not included in the price trigger or flat-rate crop categories. These can include aquaculture, nursery crops, floriculture, tobacco and livestock not included in the price-trigger category that was raised for food, fiber, fur or feathers.
Producers will be paid for sales commodities based on five payment gradations associated with their sales in 2019.
Payments will be limited to $250,000 per person or entity for all three commodity types combined. Farms that are managed by multiple owners who all provide labor or management may qualify for higher payment limits.
Additionally, producers must be able to certify that they meet the Adjusted Gross Income limitation of $900,000, unless 75% or more of their income is derived by farming, ranching or forestry.
How to Apply
Farmers can apply for CFAP 2 through December 11, 2020 at USDA FSA county offices. Additional information and application forms can be found at www.farmers.gov/cfap.
Disclaimer: This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our Firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.