Contract producers of eligible livestock and poultry have until Oct. 12 to sign up for aid under the second Coronavirus Food Assistance Program, or CFAP2.
John Anderson, economist with the University of Arkansas System Division of Agriculture and the Dale Bumpers College of Agricultural, Food and Life Sciences, said up to $1 billion has been allocated through the Consolidated Appropriations Act of 2021 to provide CFAP 2 payments to contract growers.
Anderson said the pandemic was extremely disruptive to the poultry sector.
“As COVID-related illness and/or quarantines disrupted labor, processing operations slowed, as did movement of inputs and product along the entire supply chain,” he said. “For growers, the effect of this situation was, in many cases, a reduction in birds delivered and, as a result, lower revenue. The impacts on individual grower operations were potentially severe.”
Arkansas leads the nation in poultry production. Poultry is the largest agricultural product in Arkansas, and poultry production accounts for 1 in 4 agriculture jobs.
The expanded eligibility for CFAP2 includes not only contract broiler growers but also contract growers of other poultry such as pullets, layers, eggs, turkeys, ducks, geese, and pheasants and quail. It also includes contract growers of hogs and pigs.
To calculate payments under the program, Anderson said contract growers will compare eligible revenue from Jan. 1, 2020, through Dec. 27, 2020, with eligible revenue from that same date range in a base year – the grower may select between 2018 or 2019. Growers will receive 80% of any revenue loss between 2020 and their chosen base year.
For purposes of CFAP 2 assistance payments, “eligible revenue” is defined as “revenue received by a contract producer for contract production of eligible contract livestock or poultry as reported on Internal Revenue Service Form 1099.” So, essentially whatever revenue is reported to the grower on the annual 1099 form received from their integrator.
Growers can sign up by completing a CFAP2 application at their local Farm Service Agency office. Find a local office here: farmers.gov/service-locator.
The inclusion of contract growers was unprecedented, Anderson said.
“This announcement represents the culmination of several months of work by USDA to redefine program eligibility requirements to include contract growers,” he said. Contract growers haven’t “historically been directly eligible for most forms of federal assistance because they do not own the animals they raise.”
USDA announced eligibility for contract growers on Aug. 24.