You are here
CFAP applications to open May 26
Farmers may begin applying for direct payments as part of the Coronavirus Food Assistance Program (CFAP) through their local Farm Service Agency (FSA) office on May 26, President Donald Trump announced Tuesday. Producers can expect payment one week after application, he explained.
CFAP was first announced April 17 by Secretary of Agriculture Sonny Perdue. In total, the two-part aid package offers $19 billion in support for agriculture. Part one is $16 billion dedicated to direct payments to farmers who face pandemic-related losses. The remaining $3 billion is being used to purchase produce, dairy, and protein products for food banks and other nonprofits for distribution to those in need.
Perdue, adviser Ivanka Trump, American Farm Bureau president Zippy Duvall, and several other farmers joined Trump at the White House for the announcement.
“COVID-19 has disrupted the entire food supply chain, and the agriculture community is hurting,” said Iowa Secretary of Agriculture Mike Naig. “We are grateful to the Trump administration and the USDA for acting quickly and providing some immediate financial relief to crop and livestock producers. There’s still more work to do to help egg and ethanol producers, and to help livestock producers who are facing the impossible decision to euthanize animals due to supply chain and processing plant disruptions.”
What commodities are eligible for CFAP assistance?
Producers of agricultural commodities who have suffered a 5% or greater price decline or had losses due to market supply chain disruptions because of the new coronavirus are eligible. Crops are categorized as nonspecialty crops, wool, livestock, dairy, or specialty crops, and each has its own payment structure.
What crops are eligible for CFAP assistance?
- Malting barley
- Upland cotton
- Durum wheat
- Hard red spring wheat
- Sheep (lambs and yearlings only)
- Sweet corn
- Iceberg lettuce
- Romaine lettuce
- Dry onions
- Green onions
- Sweet potatoes
What crops are not eligible for CFAP support?
Commodities that did not suffer a 5% or greater price decline are not eligible for CFAP. This includes:
- Sheep more than two years old
- Soft red winter wheat
- Hard red winter wheat
- White wheat
- Feed barley
- Extra Long Staple (ELS) cotton
- Forage crops
However, for all commodites except hemp and tobacco, USDA may reconsider if credible evidence is provided that supports a 5% price decline.
What does CFAP mean for farmers of nonspecialty crops like corn and soybeans?
Farmers who grow nonspecialty crops such as corn and soybeans can apply for direct payments beginning May 26, 2020. Crops intended for grazing are not eligible.
One payment will be made based on 50% of the farmer’s total 2019 production, or the 2019 inventory as of January 15, 2020, whichever is smaller, multiplied by the commodity’s applicable payment rates.
Be ready to provide the following information when you apply for CFAP:
- Total 2019 production for the commodity that suffered a 5% or greater price decline
- Total 2019 production that was not sold as of January 15, 2020
What are the payment rates for nonspecialty commodities?
|Commodity||Unit of Measure||CARES Act Payment Rate||CCC Payment Rate|
|Barley (malting barly only)||bushel||$0.34||$0.37|
|Wheat, Hard Red Spring||bushel||$0.18||$0.20|
What does CFAP mean for livestock producers?
Producers who have an ownership interest in eligible livestock that have suffered a 5% or greater price decline because of coronavirus and face additional significant costs in marketing their animals can apply for direct payments beginning May 26, 2020.
A single payment will be made to livestock producers based on a two-part calculation. Part one is based on the number of livestock sold between January 15 and April 15, 2020 multiplied by the payment rate per head, plus part two, the highest inventory number of livestock between April 16 and May 14, 2020 multiplied by the payment rate per head.
Be ready to provide the following information when you apply for CFAP:
- Totals of eligible livestock, by species and class, between January 15, 2020 and April 15, 2020 of owned inventory as of January 15, 2020, including offspring from that inventory
- Highest inventory of eligible livestock, by species and class, between April 16, 2020, and May 14, 2020
What are the payment rates for livestock?
|Livestock||Eligible Livestock||Unit of Measure||CARES Act Part 1 Payment Rate||CCC Part 2 Payment Rate|
|Cattle||Feeder Cattle: <600 lbs.||head||$102.00||$33.00|
|Feeder Cattle: 600+ lbs.||head||$139.00||$33.00|
|Slaughter Cattle: Fed Cattle||head||$214.00||$33.00|
|Slaughter Cattle: Mature Cattle||head||$92.00||$33.00|
|All Other Cattle||head||$102.00||$33.00|
|Hogs and Pigs||Pigs: <120 lbs.||head||$28.00||$17.00|
|Hogs: 120+ lbs.||head||$18.00||$17.00|
|Lambs and Yearlings||All sheep less than 2 years old||head||$33.00||$7.00|
What does CFAP mean for dairy farmers?
All dairy farms with milk production in January, February, and/or March 2020 are eligible for CFAP payments. Any dumped milk production during that time period is eligible for assistance. Any milk production priced under a forward contract for any time during the three-month period is ineligible.
What is the payment rate for dairy?
A single payment will be made to dairy farmers based on a two-part calculation. Part one will be based on a producer’s certification of milk production for the first quarter of calendar year 2020 multiplied by $4.71 per hundred weight. The second part of the payment is based on a national adjustment to each producer’s production in the first quarter multiplied by $1.47 per hundred weight.
Who is 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 2015, 2016, and 2017. However, if 75% of their adjusted gross income comes from farming, ranching, or forestry, the $900,000 limit does not apply.
People and legal entities must also:
- Comply with the provisions of the “Highly Erodible Land and Wetland Conservation” regulations, often called the conservation compliance provisions
- Not have a controlled substance violation
- Foreign people who are in the country legally must meet the "actively engageed in farming" provisions which requires them to provide land, capital, and be actively involved in working on the farm
Participation in the Small Business Administration’s Paycheck Protection Program (PPP) or Economic Injury Disaster Loan program does not impact a farmer’s eligibility for CFAP.
What are the CFAP payment limitations?
CFAP payments are subject to a per-person and legal-entity payment limitation of $250,000. This limit applies to the total amount of CFAP payments with respect to all eligible commodities.
Special payment limitation rules will be applied to participants that are corporations, limited liability companies, and limited partnerships. These corporate entities may recieve 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.
|Corporate Entity Shareholders||Payment Limit|
|2||$500,000 (If at least two members contribute substantial labor or management with respect to the operation of the corporate entity.)|
|3||$750,000 (If at least three members contribute substantial labor or management with respect to the operation of the corporate entity.)|
How will CFAP payments be structured?
To ensure the availability of funding throughout the application period, producers will recieve 80% of their maximum total payment upon approval of the application. The remaining portion of the payment will be paid at a later date as funds remain available.
Where does the funding for CFAP come from?
The Coronavirus Aid, Relief and Economic Security Act (CARES), the Families First Coronavirus Response Act, and other USDA existing authorities provide the funding and authorities for CFAP.