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USDA reconciles issues with CFAP

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MORE MONEY: USDA announces details of offering 80% indemnity payments for livestock producers who had to depopulate animals during COVID pandemic meat processing plant shutdowns.
Contract growers now eligible and updated payment calculations added to coronavirus ad hoc assistance program for farmers.

In one of many final actions heading out the door on Friday, the Trump administration’s USDA made significant clarifications to the Coronavirus Food Assistance Program in hopes of widening the assistance available to agricultural producers. USDA will provide additional assistance through CFAP, expanding eligibility for some agricultural producers and commodities as well as updating payments to accurately compensate some producers who already applied for the program.

Some of these changes are being made to align with the recently enacted Consolidated Appropriations Act of 2021 while others are discretionary changes being made in response to ongoing evaluation of CFAP.

“The COVID-19 pandemic has left a deep impact on the farm economy, and we are utilizing the tools and monies available to ease some of the financial burdens on American producers to ensure our agricultural economy remains strong, independent and a global leader in production,” says Secretary of Agriculture Sonny Perdue. “As part of implementing CFAP 1 and CFAP 2, we identified new areas of support and Congress recently directed us to provide additional relief. This additional assistance builds on to the $23.6 billion in assistance already provided to our farmers and ranchers impacted by the pandemic, and we will continue to implement other provisions enacted by Congress.”

Contract growers now included

When Congress rushed to get the first coronavirus aid package out in the spring of 2020, contract growers were left out from receiving government assistance. This left many integrated poultry producers unable to qualify, despite significant losses experienced.

Michael Nepveux, livestock economist at the American Farm Bureau Federation, spoke earlier in the week saying that contract growers remains one of the segments that still needs to be whole. For instance, for those producers who normally receive birds four times a year, and instead only receive 3, see an instant drop of 25% in revenue.

As a result of reductions in chicken processing capacity, chicken farmers across the country experienced longer waiting periods between flocks, received fewer birds to raise, and in some cases have been forced to depopulate millions of healthy birds.

Contract producers of swine, broilers, laying hens, chicken eggs and turkeys who suffered a drop in revenue in 2020 as compared to their 2019 revenue because of the pandemic now are eligible for AFAP assistance. Producers could receive up to 80% of their revenue loss, subject to the availability of funds. Specifically, contract growers are eligible for up to $1 billion of an allocated $3 billion for livestock in the latest round of funding and payments of up to 80% of their revenue losses.

Eligible producers must:

  • have raised broilers, pullets, layers, chicken eggs, turkeys, hogs, or pigs under a contract in 2019 and 2020.
  • demonstrate a drop in revenue for the period from January 1, 2020, through December 27, 2020, as compared to the period from January 1, 2019, through December 27, 2019.
  • provide a copy of their contract and documentation to support the information provided on their application, if requested by USDA’s Farm Service Agency.

“No industry has escaped the economic challenges of COVID-19, including turkey farming families across the country,” says Joel Brandenberger, National Turkey Federation president. “This expanded eligibility recognizes the losses many contract turkey farmers experienced in 2020 as a result of the pandemic and will provide some assistance as they continue in their mission to feed American families. NTF looks forward to working with USDA as implementation of this program moves forward in the coming weeks.”

The National Chicken Council was also a leading advocate for including these funds in the most recent COVID-19 stimulus bill passed by Congress in late December. “We are pleased that after several months of discussions this has come to fruition and our hard working chicken growers that were impacted by COVID-19 will finally get some relief,” says NCC President Mike Brown.

Producers of pullets and turfgrass sod also now are eligible for CFAP payments. The commodities were not explicitly included in the initial CFAP 2 rule. Payments are based on eligible sales, and the payment calculation in the updated rule includes crop insurance indemnities, Noninsured Crop Disaster Assistance Program, and Wildfire and Hurricane Indemnity Program – Plus payments.

FSA is also providing an additional CFAP 1 inventory payment for swine to help producers who face continuing market disruptions from changes in U.S. meat consumption due to the pandemic. Swine producers with approved CFAP 1 applications will soon automatically receive a “top-up” payment of $17 per head increasing the total CFAP1 inventory payment to $34 per head. The National Pork Producers Council also compiled a one-page fact sheet on what the updated rules mean for the pork industry. 

Payment calculations

Similarly, FSA adjusted the payment calculation to use the producer’s eligible 2019 calendar year sales, and 2019 crop insurance indemnities, NAP, and WHIP+ payments, multiplied by the applicable payment rate for all sales commodities, which include specialty crops, aquaculture, tobacco, specialty livestock, nursery crops and floriculture, for CFAP 2. Producers who applied during the sign-up period that closed Dec. 11, 2020, can modify an existing CFAP 2 application between Jan. 19 and Feb. 26, 2021.

Additionally, FSA adjusted the payment calculation for certain row crops for CFAP 2, specifically those for which a producer had crop insurance coverage but not an available 2020 Actual Production History approved yield. FSA is now using 100% of the 2019 Agriculture Risk Coverage-County Option  benchmark yield to calculate payments when an APH is not available rather than 85%, which was in the original CFAP 2 calculations. This calculation change is only for producers with crop insurance coverage who grow barley, corn, sorghum, soybeans, sunflowers, upland cotton and wheat. Producers who applied during the sign-up period that closed Dec. 11, 2020, can modify an existing CFAP 2 application between Jan. 19 and Feb. 26, 2021.

Upcoming deadlines

Producers who are now eligible and those who need to modify existing applications due to these updates can contact FSA between Jan. 19 and Feb. 26. New applicants can also obtain one-on-one support with applications by calling 877-508-8364.

In addition to the changes being made to CFAP, per language in the Consolidated Appropriations Act of 2021, FSA will extend 2020 Marketing Assistance Loans to provide additional flexibilities for farmers. FSA is also preparing to move forward on implementation of the remaining provisions of the recently passed Consolidated Appropriations Act of 2021.


TAGS: Regulatory
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