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COVID-19 Response: Initial details on Coronavirus Food Assistance Program (CFAP)

by Megan Roberts, Extension educator

The United States Department of Agriculture (USDA) announced initial details of the Coronavirus Food Assistance Program (CFAP). This program is funded through dollars already appropriated through last month’s CARES Act. As previously described in an earlier post, the CARES Act appropriated $9.5 billion in agricultural economic relief, $14 billion in replenishment to the Commodity Credit Corp, and billions to food and nutrition programs.

According to the USDA, the $19 billion in the first round of CFAP includes $16 billion in direct payments to producers and $3 billion in indirect commodity purchases. CFAP uses all of the $9.5 billion of discretionary USDA emergency funding from CARES, $6.5 billion in existing CCC funding and Section 32 authority, and $3 billion in CARES bulk agricultural product purchases (which will then be distributed to food banks and other hunger relief programs).

Limited details are available from the USDA; however, the Senate Agriculture Appropriates Committee, via Committee Chairman Senator Hoeven, issued further details about the $16 billion of direct assistance to farmers and ranchers. The following is quoted from his April 17, 2020 news release:

"USDA will provide $16 billion in direct payments to farmers and ranchers including:
  • $9.6 billion for the livestock industry
    • $5.1 billion for cattle
    • $2.9 billion for dairy
    • $1.6 billion for hogs
    • $3.9 billion for row crop producers
  • $2.1 billion for specialty crops producers
  • $500 million for others crops
"Producers will receive a single payment determined using two calculations:
  • Price losses that occurred January 1-April 15, 2020. Producers will be compensated for 85% of price loss during that period.
  • Second part of the payment will be expected losses from April 15 through the next two quarters, and will cover 30% of expected losses.
"The payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity. Qualified commodities must have experienced a 5% price decrease between January and April. 

"USDA is expediting the rule making process for the direct payment program and expects to begin sign-up for the new program in early May and to get payments out to producers by the end of May or early June."

We await further details from the USDA.

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