Through the auspices of the USDA’s Farm Service Agency (FSA), the Coronavirus Food Assistance Program (CFAP) is providing financial relief to farmers and ranchers who experienced adverse economic effects from COVID-19.
Broadly, the program addresses pricing relief and supports producers who incurred additional marketing costs for their products. To date, it distributed $5.4 billion, equating to approximately $15,000 per producer.
Program conditions and access
CFAP is available if you sustained a loss of 5% or greater during a pre-established time frame between mid-January and mid-April of 2020. The list of eligible commodities includes:
- Non-specialty crops, including a wide range of grains
- Wool
- Livestock
- Dairy
- Specialty crops, including a wide range of fruits and vegetables
Among the ineligible commodities for CFAP are some varieties of wheat, some livestock (sheep older than two years), certain types of cotton, hemp, tobacco, and other types of grain like rice and flax.
Prior to June 22, 2020, producers could submit crops not on the initial eligibility list for consideration for relief, but the window is presently closed.
Applications for relief are available online at https://www.farmers.gov/cfap. Phone and email assistance are available from the USDA. The initial application requires producers to self-certify, but the USDA notes producers should retain documentation used for filling out the application in the event USDA requests additional information.
Other farm sectors are seeking program modifications
With beef producers receiving almost half of the total relief payments, other farm sectors, such as the potato and apple industries, are looking to get a bigger slice of the pie. The National Potato Council recently wrote a letter to the Secretary of Agriculture Sonny Perdue requesting reclassification to Category 1 payments.
Both the apple and potato sectors claim they incurred the 5% price reduction to qualify for Category 1, but the USDA did not have sufficient data to include them when the classifications were initially made. Indeed, apple farmers note losses ranging from 6.5% to nearly 25%. For the potato industry, the council noted that the USDA analyzed data representing a mere 6.5% of all potato transactions for the year.
While CFAP enormously benefited some producers, for those that qualify in the lowest tier, Category 3, payments are as low as 1 cent per pound. Some potato producers elected to give their crop away due to reduced demand from restaurants and food service companies shut down by COVID-19 restrictions.
With a total of $16 billion in funding expected from the CFAP program, many producers will derive at least short-term support until the market stabilizes. If you are a row crop farmer who experienced a 5% price drop between January and April, you are likely eligible for support. The support payment is based on the formula of the unsold bushels x 0.5 x (CARES Act payment rate). Producers should check the USDA guidelines to determine their eligibility.
With nearly a century of experience advising producers about farm policies and their impact on farm operations and planning, Halderman Real Estate and Farm Management can advise you about CFAP support programs, if you qualify, how to apply and provide other essential knowledge for navigating these uncertain times.
