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USDA expands CFAP assistance to contract growers

USDA
January 28 update
In accordance with a White House memo freezing implementation of proposed rules and regulations pending review, the USDA has indefinitely suspended processing and payments under the “Coronavirus Food Assistance Program (CFAP) – Additional Assistance” announced January 15. Farm Service Agency (FSA) local offices will continue to accept applications during the evaluation period. For the latest updates, see Farmers.gov/CFAP.

The U.S. Department of Agriculture (USDA) recently expanded eligibility to more farmers under the Coronavirus Food Assistance Program (CFAP), including contract hog and poultry growers who suffered a drop in revenue because of the COVID-19 pandemic.

“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,” former USDA Secretary Sonny Perdue said Jan. 15 in one of his final acts as head of the Agriculture Department. “As part of implementing CFAP 1 and CFAP 2, we identified new areas of support and Congress recently directed us to provide additional relief.”

The USDA announced an additional $2.3 billion in CFAP funding, primarily for contract growers of hogs, broilers, laying hens, chicken eggs and turkeys. Growers could receive up to 80% of their revenue loss, subject to the availability of funds. 

“Many producers were left out of the CARES Act and subsequent CFAP programs because farmers who raise animals under a contract for another entity that owns the animals could not participate,” said AFBF economist Michael Nepveux. “However, these producers saw their income significantly reduced as many of their barns remained empty due to supply chain disruptions earlier in the pandemic.”

Additionally, the USDA said producers of pullets and turfgrass sod now are eligible for CFAP payments. 

Top-up payments for hogs

The package also includes an automatic “top-up” payment of $17 per head for hog farmers under the CFAP 1 program, increasing the total payment to $34 per head. The top-up payment aims to rectify large differences between actual first quarter sales losses and CFAP 1 payment rates, Nepveux explained.

“Payment rates for swine are increasing from 25% to 50% of the estimated total economic loss,” he said. 

Row crop adjustments

The USDA also adjusted the CFAP 2 payment calculation for some major row crops, addressing an issue that existed for farmers who had crop insurance coverage but not an available 2020 Actual Production History (APH) approved yield. Now when APH isn’t available, the agency will use 100% of the 2019 Agriculture Risk Coverage-County benchmark yield to calculate payments instead of the 85% the earlier CFAP2 calculations required. The calculation change is only for farmers with crop insurance coverage who grow barley, corn, sorghum, soybeans, sunflowers, upland cotton and wheat.

Payment calculations were also adjusted for some specialty crops and livestock. 

Eligible producers have until Feb. 26 to submit new applications or modify existing applications by contacting their local USDA service center.


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