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Agriculture's $19 Billion Coronavirus Food Assistance Program (CFAP)

Coronavirus Food Assistance Program (CFAP), created in response to the COVID-19 national emergency, includes two major elements: direct support to farmers and ranchers, and the purchase and distribution of food products for those in need (Farmers to Families Food Box).

USDA funded the $16 billion in direct payments to producers via $9.5 billion provided in the Coronavirus Aid, Relief, and Economic Stability (CARES) Act and $6.5 billion through the Commodity Credit Corporation (CCC).

The remaining $3 billion will be used for food purchases, including U.S.-produced cooked meat products, dairy and produce.

TIMING

USDA announced on August 11 that the deadline has been extended to September 11. The original application deadline was August 28, 2020.

As of August 11, producers who apply for CFAP will receive 100 percent of their total payment, not to exceed the payment limit, when their applications are approved. Producers who already received their initial payment of 80% will automatically receive the remaining 20% from the FSA.

PAYMENT LIMITATIONS / REQUIREMENTS

There is a payment limit of $250,000 per individual or entity for all commodities combined.

Entities such as a corporation, LLC, or partnership may qualify for as many as three limits (total $750,000) if they have at least three participants who provide 400 hours of active involvement per year.

The Adjusted Gross Income test applies: An operation with average AGI of $900,000 or less the past three years qualifies. However, an operation with more than that AGI may still qualify if 75% or more of the income is from farming or ranching.

Operations must be in compliance with Highly Erodible Lands and Wetland Conservation requirements.

Participation in the Small Business Administration Paycheck Protection Program (PPP) or the Economic Injury Disaster Loan (EIDL) program does not affect eligibility or payments under CFAP, nor does it affect any other FSA programs or loans.

WHERE FUNDS WILL GO

Funds will go to qualifying producers who suffered a 5% or greater price decline due to COVID-19 and/or additional significant marketing costs as a result of lower demand, surplus production and disruptions to shipping patterns and the orderly marketing of commodities.

Based on USDA’s Cost-Benefit Analysis, outlays are estimated in the table below.

Commodity Group

Estimated gross payments ($ bil.)

Initial 80% of estimated gross payments ($ bil.)

Estimated total net payments after payment limitations ($ bil.)

Non-specialty crops

$3.76

$3.01

$3.50

Specialty crops

$2.88

$2.30

$2.40

Dairy

$3.47

$2.78

$2.77

Livestock – Cattle

$5.44

$4.35

$5.06

Livestock – Hogs/pigs

$2.67

$2.14

$1.60

Other sectors

$1.00

$0.80

$0.67

Total

$19.22

$15.38

$16.00

 

PAYMENT RATES AND METHODOLOGY

The table below shows payment rates by commodities. USDA splits out rates by sources of funding: CARES Act and CCC funds. How they are applied differs depending on product category.

Commodity

CARES Payment rate ($)

CCC Payment rate ($)

Barley (malting), bu.

0.34

0.37

Canola, lb.

0.01

0.01

Corn, bu.

0.32

0.35

Durum wheat, bu.

0.19

0.20

Hard red spring wheat, bu.

0.18

0.20

Millet, bu.

0.31

0.34

Oats, bu.

0.15

0.17

Sorghum, bu.

0.30

0.32

Soybeans, bu.

0.45

0.50

Sunflowers, lb.

0.02

0.02

Upland cotton, lb.

0.09

0.10

Slaughter cattle and mature (cull) cattle, head

92

33

Slaughter cattle (fed), head

214

33

Feeder cattle <600 lb., head

102

33

Feeder cattle ≥600 lb., head

139

33

All other cattle, head

102

33

Pigs <120 lb., head

28

17

Hogs ≥120 lb., head

18

17

Lambs/yearlings, head

33

7

 

Effective price

Dairy/milk, cwt.

6.20

 

Here are the calculations by product category.

Non-specialty crops (malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat and hard red spring wheat):
2019 inventory subject to price risk on January 15, 2020, not to exceed 50% of 2019 production X 50% of each payment rate totaled.

Specialty crops (see farmers.gov/cfap for list):
Volume of production sold January 15-April 15, 2020, production shipped but unpaid, and number of acres from which harvested production did not leave the farm or mature product was destroyed or not harvested and will not be sold.

Dairy:
Part 1 – First-quarter production x $4.71/cwt.
Part 2 – First-quarter production x 1.014 (101.4%) x $1.47 (effective price is $6.20).

Livestock:
Livestock sold January 15-April 15 x CARES payment rate + unpriced inventory April 16-May 14 x CCC payment rate.

For more detailed explanations of methodology regarding payments, visit farmers.gov/cfap or click the links below:
Final rules
Cost-benefit analysis

 

USDA Commodity and Food Purchases

Through the Agricultural Marketing Service, USDA will buy $3 billion in fresh U.S. produce, dairy, and meat products, beginning with estimated monthly purchases of:

$100 million:
fresh fruits and vegetables

$100 million:
dairy products

$100 million:
meat products

Requests for contracts opened April 24 and awards were being made by mid-May. In addition, USDA has other funding available for purchases to benefit food banks.

An additional $470 million in CCC funding has been slated for later in 2020, bringing the total to $4.89 billion.

Prepare for Application

Application opened May 26 via USDA form 3114. USDA staff are working with producers by phone and technology, no in-office visits. Producers must call their local FSA office to set up an appointment. They should NOT send personal information without first initiating a phone call to the county FSA office.

However, it is a good idea to get paperwork in order as soon as possible or ahead of time, particularly if they don’t already have an existing relationship with FSA.


NEEDED DOCUMENTATION

Those who have worked with USDA in the past likely have most of the following documents already on file, but it’s a good idea to have the information available. Production, sales, etc. are self-certified, but be prepared to document your amounts as USDA will be spot checking. These forms are available to download now at farmers.gov/cfap.

  • CCC-901: Use if your farm/ranch is a legal entity. You need members’ names, addresses, tax IDs, and citizenship status.
  • CCC-941: This form is used to certify average adjusted gross income to determine eligibility relative to income caps/restrictions (i.e. $900,000 AGI).
  • CCC-942: If your AGI is more than $900,000, use this form to certify income from farming, ranching, and forestry. (Three tax years prior, at least 75% of the person or entity’s income must have been derived from farming, ranching or forestry operations. Certification from CPA or attorney is required for the three years.)
  • AD-1026: Conservation compliance.
  • AD-2047: Basic contact information and change of partners.
  • SF-3881: Banking information to allow direct deposits from USDA.

No acreage report is required at the time of application. USDA farm number may not be needed immediately.


FUTURE

USDA says it is not finished with COVID-19 aid to producers. That is one reason for two stages of payments – to ensure money is available for anticipated additions to the program. The CARES Act provided an additional $14 billion USDA can spend beginning in July, but it is taking a cautious approach as some of that may be needed for existing programs and other purposes.

USDA leaders mention the following considerations:

  • USDA is collecting additional data regarding the euthanization of animals due to inability to deliver in the face of disruptions such as packing plant closures or reduced capacity.
  • It is open to adding commodities not included due to the department’s lack of price data. Specifically mentioned were nursery crops and aquaculture, maple syrup and eggs (shell vs. liquid prices acted differently).
  • Growers of hard red winter, soft red winter and white wheat are appealing being left out of the program.

DIRECT ACCESS

Watch a video that highlights how CFAP payments are calculated based on various scenarios for dairy, grain and livestock.

See the latest USDA guidance on the types of sales contracts that are eligible versus ineligible to be counted as inventory.

Additional information from USDA including the payment calculator and application can be found at farmers.gov/cfap.

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