May 19, 2020USDA: Farmers to get direct support for losses related to COVID-19
U.S. Secretary of Agriculture Sonny Perdue announced May 19 details of the Coronavirus Food Assistance Program (CFAP), which will provide up to $16 billion in direct payments to deliver relief to America’s farmers and ranchers impacted by the coronavirus pandemic.
According to a news release, in addition to this direct support to farmers and ranchers, USDA’s Farmers to Families Food Box program is partnering with regional and local distributors, whose workforces have been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase $3 billion in fresh produce, dairy, and meat and deliver boxes to Americans in need.
“America’s farming community is facing an unprecedented situation as our nation tackles the coronavirus. President Trump has authorized USDA to ensure our patriotic farmers, ranchers, and producers are supported and we are moving quickly to open applications to get payments out the door and into the pockets of farmers,” said Secretary Perdue. “These payments will help keep farmers afloat while market demand returns as our nation reopens and recovers. America’s farmers are resilient and will get through this challenge just like they always do with faith, hard work, and determination.”
Beginning May 26, the U.S. Department of Agriculture (USDA), through the Farm Service Agency (FSA), will be accepting applications from agricultural producers who have suffered losses.
CFAP provides vital financial assistance to producers of agricultural commodities who have suffered a five-percent-or-greater price decline due to COVID-19 and face additional significant marketing costs as a result of lower demand, surplus production, and disruptions to shipping patterns and the orderly marketing of commodities.
Farmers and ranchers will receive direct support, drawn from two possible funding sources. The first source of funding is $9.5 billion in appropriated funding provided in the Coronavirus Aid, Relief, and Economic Stability (CARES) Act to compensate farmers for losses due to price declines that occurred between mid-January 2020, and mid-April 2020 and provides support for specialty crops for product that had been shipped from the farm between the same time period but subsequently spoiled due to loss of marketing channels. 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.
For eligible specialty crops, the total payment will be based on the volume of production sold between January 15 and April 15, 2020; the volume of production shipped, but unpaid; and the number of acres for which harvested production did not leave the farm or mature product destroyed or not harvested during that same time period, and which have not and will not be sold. Specialty crops include, but are not limited to, almonds, beans, broccoli, sweet corn, lemons, iceberg lettuce, spinach, squash, strawberries and tomatoes.
Additional crops may be deemed eligible at a later date.
As part of the Coronavirus Farm Assistance Program, the U.S. Department of Agriculture (USDA) today announced that it will provide up to $2.1 billion in direct payments to specialty crops producers. The payments will be based on losses where prices and market supply chains have been impacted and will help producers facing additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year as a result of COVID-19.
Producers that fall into one of the following categories may be eligible to receive a direct payment:
- Sales with a price loss of 5% or more between January 15 and April 15, 2020. Almonds, artichokes, beans, broccoli, cabbage, carrots, cauliflower, sweet corn, cucumbers, eggplant, lemons, iceberg and Romaine lettuce, dry onions, peaches, pears, pecans, bell and other types of peppers, rhubarb, spinach, squash, strawberries and tomatoes are eligible.
- Shipments that left the farm by April 15 and spoiled due to no market or for which no payment was received. All specialty crops are eligible.
- Shipments that have not left farm or mature crops that remained unharvested by April 15. All specialty crops are eligible.
Beginning on May 26, 2020, producers of all eligible commodities may apply for assistance through their local USDA Farm Service Agency Service Center. Specialty crops producers are encouraged to complete the application forms ahead of the application date. Producers can locate their service center and find application forms and additional information at farmers.gov/cfap.
The payments are one of several measures USDA is taking to support America’s specialty crops industry which has been greatly impacted by the COVID-19 national emergency. In addition to the direct payments, USDA has implemented the Farmers to Families Food Box Program, in which the USDA Agricultural Marketing Service is partnering with national, regional and local suppliers to purchase fresh produce, dairy and meat products and have suppliers package these products into family-sized boxes, then transport them to food banks, community and faith-based organizations, and other non-profits serving Americans in need. More information about the food box program is available at www.usda.gov/farmers-to-families .
USDA will also make an additional $873.3 million in Section 32 purchases of specialty crops products for distribution to food banks. The use of these additional Section 32 funds will be determined by industry requests, USDA agricultural market analysis and food bank needs. The latest purchase solicitations are available at www.ams.usda.gov/selling-food-to-usda-terms/solicitations.
Specialty crop industry responds
The leaders of a national coalition of organizations representing specialty crop producers reacted to the details of the U.S. Department of Agriculture’s direct payment program for farmers and ranchers impacted by COVID-19.
Tom Stenzel, President & CEO, United Fresh Produce Association
“We applaud the announcement of a direct payment program for fruit and vegetable growers. That being said, we understand the resource and policy constraints that have been placed on USDA and the Administration and will work closely with Congress on implementing a stronger and more effective program in the next round of discussion with Capitol Hill. It is essential that USDA and Congress focus on programs that target resources for growers, grower-shippers, and others in the produce distribution supply chain that had direct job losses and immediate financial impact from government mandated closures.”
Kam Quarles, CEO, National Potato Council
“Given the scope of this crisis, we knew the initial funding would be insufficient to meet the need of family farms. Based upon the limited resources announced today under this direct payment program, the potato industry is strongly urging Congress to act rapidly to provide more resources and flexibility to fill this huge gap and maintain producers’ livelihoods.”
Dave Puglia, President & CEO, Western Growers
“The Administration is doing what it can to help as many farmers as possible from a limited source of relief funds. The tough part of this is that even with the increased cap on relief payments to individual farmers, the actual losses are far greater for many. By way of example, the average sized lettuce farm in the West is 250 acres and requires about $5,000 per acre to grow the crop. The relief payment cap means the farmer who lost the entire crop when the food service industry was closed will have no relief for all but 50 acres of that loss.
“We appreciate all the Administration has already done, especially on regulatory and administrative challenges, to keep our industry operating through the crisis. I urge the President and Secretary Perdue to closely monitor the full scope of economic damage done to fresh produce growers and other farmers and ranchers, and to work with Congress to close the gap in future COVID-19 relief efforts.”
Mike Joyner, President, Florida Fruit & Vegetable Association
“We appreciate the administration’s efforts to help agriculture overcome many of the challenges we have faced during this pandemic. Florida specialty crop producers experienced devastating losses from the shutdown of the foodservice supply chain and slowdown at retail – losses far greater than the direct payment limits announced today will cover. We will continue to work with Congress and the administration to secure additional relief for hard-hit Florida growers of fresh fruits and vegetables.”
Non-Specialty Crops and Wool
Non-specialty crops eligible for CFAP payments include malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat, and hard red spring wheat. Wool is also eligible. Producers will be paid based on inventory subject to price risk held as of January 15, 2020. A payment will be made based 50 percent of a producer’s 2019 total production or the 2019 inventory as of January 15, 2020, whichever is smaller, multiplied by the commodity’s applicable payment rates.
Livestock eligible for CFAP include cattle, lambs, yearlings and hogs. The total payment will be calculated using the sum of the producer’s number of livestock sold between January 15 and April 15, 2020, multiplied by the payment rates per head, and the highest inventory number of livestock between April 16 and May 14, 2020, multiplied by the payment rate per head.
For dairy, the total payment will be calculated based on a producer’s certification of milk production for the first quarter of calendar year 2020 multiplied by a national price decline during the same quarter. The second part of the payment is based a national adjustment to each producer’s production in the first quarter.
There is a payment limitation 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 where members actively provide personal labor or personal management for the farming operation. 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 on May 26, 2020. Additional information and application forms can be found at farmers.gov/cfap. Producers of all eligible commodities will apply through their local FSA office. Documentation to support the producer’s application and certification may be requested. 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. Applications will be accepted through August 28, 2020.
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.
USDA Service Centers are open for business by phone appointment only, and field work will continue with appropriate social distancing. While program delivery staff will continue to come into the office, they will be working with producers by phone and using online tools whenever possible. All Service Center visitors wishing to conduct business with the FSA, Natural Resources Conservation Service, or any other Service Center agency are required to call their Service Center to schedule a phone appointment. More information can be found at farmers.gov/coronavirus.