by Megan Roberts, Extension educator
The United States Department of Agriculture (USDA) announced the second round of direct farmer assistance, the Coronavirus Food Assistance Program 2 (CFAP 2), on September 18, 2020. Sign up for CFAP 2 begins with Farm Service Agency (FSA) on Monday September 21, 2020 and concludes Friday, December 11, 2020. (Sign-up for the original program, CFAP 1, ended September 11.) The wide-reaching program covers hundreds of commodities, including specialty and non-specialty crops and livestock. Funding for CFAP 2 comes from the authority of the Commodity Credit Corp (CCC) Charter Act. CCC funds were replenished through the CARES Act back in March 2020. USDA estimates distributing a total of $14 billion in ad-hoc direct payments to producers nationwide through CFAP 2.
Row crops, wool, livestock, specialty livestock, dairy,
specialty crops, floriculture and nursery crops, aquaculture, broilers and
eggs, and tobacco are all commodities included in CFAP 2. In general, non-specialty commodity payments are based off of producer specific data from spring and summer 2020.
CFAP 2 calls these price trigger commodities and flat-rate commodities. Examples of these types of commodities include cow milk under dairy, non-specialty livestock, and row crops. In
contrast, sales commodities use historical 2019 sales data to calculate
payments. For example, specialty crops and specialty livestock payments in CFAP 2 are sales commodities. These payments are based off of 2019
eligible sales multiplied by a payment percentage factor. For Minnesotan
specialty producers that may have been ineligible for the original CFAP because of timing of the covered period,
the new CFAP 2 specialty crop revenue based formula should help more Minnesotan farmers access payments. For sales commodities, new
farms formed in 2020 may use actual 2020 sales instead of historical 2019 sales to calculate payments.
CFAP 2 is a separate program from CFAP 1 with a separate application. Meaning if you are eligible, you can apply for CFAP 2 regardless of whether you participated in CFAP 1 or any other FSA program (see USDA's FAQs for more information.)
Payment limitations for CFAP 2 remain similar to the
original CFAP 1, with an individual/entity limit of $250,000 (with multiple owner
formal entities possibly being able to access up to $750,000). Trusts and
estates are now also eligible.
For the most up-to-date information on CFAP including how to apply, visit the USDA website farmers.gov/cfap or contact your local FSA office.
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Addendum A: Row crop example
For row crops that are price trigger based, you will need to use the formulas provided by FSA along with your 2020 FSA annual acreage report. Let’s say you had 100 acres of corn with a 2020 Actual Production History (APH) approved yield of 179 bushels per acre. Using the CFAP 2 formula you would have 100 acres x 40% x $0.58 x 179 bu/acre = a payment of $4,152.80.
The 40% is the nationwide crop marketing percentage for corn; FSA has calculated this separately for each price trigger crop. The $0.58 is the crop-specific payment rate, which again is a separately calculated rate for each price trigger crop. Corn and soybeans both happen to have a payment rate of $0.58.
According to FSA, “payments for eligible row crops included in the price trigger payment category will be equal to the greater of:
1. Eligible acres of the crop multiplied by a rate of $15 per acre; OR
2. Eligible acres of the crop multiplied by a nationwide crop marketing percentage, multiplied by a crop-specific payment rate, and then by the producer’s weighted 2020 Actual Production History (APH) approved yield. If the APH is not available, 85 percent of the weighted 2019 Agriculture Risk Coverage-County Option (ARC-CO) benchmark yield for that crop will be used.”
Addendum B: Specialty crop example
For sales commodities such as specialty crops, you will need to provide 2019 sales figures. For many producers, your 2019 Schedule F coupled with your 2019 farm records will likely provide the information needed to determine 2019 sales. CFAP is a commodity based program, so make sure figures reported are based on the raw agricultural product, not any value-added processing and/or packaging. Let’s say you are a direct-sale producer and had $95,400 in total sales in 2019 related to production of bulk, unprocessed apples, strawberries, grapes and honey. Based on your 2019 sales, you'd in the 10.6% payment factor for your sales of $0-49,999 and you’d be in the 9.9% percent payment factor range for your sales of $50,000-99,000. $49,999 x 10.6% = a payment of $5,300. $45,400 x 9.9% = a payment of $4,494. Total payment = $9,794.
Note: A previous version of this post had an addition error in Addendum B.
