Sponsored By
Wallaces Farmer

Farmers: COVID-19 aid signup begins May 26Farmers: COVID-19 aid signup begins May 26

Producers will receive 80% of their maximum payment upon application approval.

6 Min Read
American Farm Bureau Federation President Zippy Duvall praises President Donald Trump in a May 19 conference in which Trump announced aid for farmers.screenshot/White House

Beginning May 26, agricultural producers may begin applying for government assistance at USDA's Farm Service Agency offices. The application period continues through Aug. 28, 2020. Please call ahead to schedule an appointment.

The assistance is to compensate producers who have suffered losses due to the COVID-19 outbreak.

It includes:

  • Up to $16 billion in direct payments; and

  • The purchase of $3 billion in fresh produce, dairy, and meat to deliver to families in need.

“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 Agriculture Secretary Sonny Perdue. “These payments will help keep farmers afloat while market demand returns as our nation reopens and recovers.”

Producers will receive 80% 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.

Is there a payment limit?

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% 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.

Related:Farm aid to flow after Memorial Day

The aid

The direct funding comes from the Coronavirus Food Assistance Program and the the Coronavirus Aid, Relief, and Economic Stability (CARES) Act. Congress allocated $9.5 billion in the CARES Act to compensate farmers for losses due to price declines that occurred between mid-January 2020 and mid-April 2020 and to support specialty crop growers for product that had been shipped from the farm between the same time period, but subsequently spoiled due to loss of marketing channels.

Additional funding comes from the Commodity Credit Corporation. USDA will use $6.5 billion in CCC funds to cover losses due to ongoing market disruptions.

Who qualifies?

Farmers with a 5% or greater price decline due to COVID-19 and who face additional marketing costs as a result of lower demand, surplus production and shipping disruptions qualify for aid through the Coronavirus Food Assistance Program.

Related:USDA officials offer details on COVID-19 aid program

What ag products qualify?

  • 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 Jan. 15, 2020. A payment will be made based 50% of a producer’s 2019 total production or the 2019 inventory as of Jan. 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 Jan. 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.

  • For eligible specialty crops, the total payment will be based on the volume of production sold between Jan. 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. A full list of eligible crops can be found on farmers.gov/cfap. Additional crops may be deemed eligible at a later date.

The reaction

“This aid can’t arrive soon enough as many farmers file for bankruptcy, facing unprecedented losses," said Agriculture Secretary Sonny Perdue. “The Coronavirus Food Assistance Program is critically important, but the long-term effects of this pandemic are still rippling through the farm economy. The livestock sector is a prime example. As America begins to reopen for business, it’s imperative that we ensure the nation’s farms and ranches are able to hold on through this season and next to help put this country back on the road to recovery.” 

The pandemic has contributed to an increase in farm bankruptcies, up 23% in March 2020 compared to a year earlier, according to ABFB. Also, the pandemic depressed agricultural prices with hog futures falling 53%, ethanol futures falling 33%, and live cattle and cotton futures falling 25% by mid-April.

“The COVID-19 pandemic has led to much uncertainty across farm country,” said National Corn Growers Association President Kevin Ross. “This assistance is a first step to getting farmers, and our customers, back on solid footing.”

A recent NCGA analysis projects a $50 per acre average revenue decline for the 2019 corn crop with losses anticipated to be higher for the 2020 crop as two of corn’s largest uses, livestock feed and ethanol, have been especially impacted by COVID-19.

“We applaud the announcement of a direct payment program for fruit and vegetable growers," said Tom Stenzel, President & CEO, United Fresh Produce Association. "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.”

“Given the scope of this crisis, we knew the initial funding would be insufficient to meet the need of family farms," said Kam Quarles, CEO, National Potato Council. "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.”

“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," said Dave Puglia, President & CEO, Western Growers. "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."

Read more about:

Covid 19

About the Author(s)

Farm Progress Staff

/author/compiled-by-staff, Farm Progress


Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like