The Agriculture Department is launching a new round of coronavirus relief payments worth up to $14 billion that will be spread over more commodities with new methods of calculating the assistance.
The commodities that will qualify for the Coronavirus Food Assistance Program payments for the first time include wine grapes, goats, bison, mohair, tobacco, hemp, mink and three classes of wheat: soft red winter, hard red winter, and white.
Enrollment will start Monday for the second round of CFAP, which is designed to compensate farmers for losses related to the COVID-19 pandemic since mid-April. The deadline for signup is Dec. 11.
In its cost-benefit analysis of the new rules, USDA estimates the payments will eventually total $13.2 billion, with $5.7 billion of that going to producers of row crops, $2.5 billion for beef cattle, $2.2 billion to specialty commodities, and $1.3 billion to dairy producers.
President Donald Trump announced the planned launch of CFAP-2 Thursday night at a campaign event in Wisconsin ahead of the release of the rules by USDA on Friday.
“We listened to feedback received from farmers, ranchers and agricultural organizations about the impact of the pandemic on our nation's farms and ranches, and we developed a program to better meet the needs of those impacted,” said Agriculture Secretary Sonny Perdue.
Under the first round of CFAP, commodities generally qualified for payments if their price had declined by at least 5% for a specified time period, generally between January and April 15.
Under CFAP-2, the 5% price decline will continue to be one of the three methods used to determine eligibility, and the time period will extend from April 15 to the end of the year, according to USDA. The eligible commodities will include barley, corn, sorghum, soybeans, sunflowers, upland cotton, all classes of wheat, milk, broilers, eggs, beef cattle, hogs, lambs and sheep.
Payments for such “price trigger” crops will be calculated using the greater of the 2020 planted acres multiplied by $15 per acre; or the eligible acres 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.
The marketing percentage and payment rates are:
- Barley, 63% and 54 cents a bushel.
- Corn, 40% and 58 cents a bushel.
- Cotton, 46% and 8 cents per pound.
- Sorghum, 55% and 56 cents a pound.
- Soybeans, 54% and 58 cents a bushel.
- Sunflowers, 44% and 2 cents per pound.
- Wheat, 73% and 54 cents per bushel.
If an APH isn’t available for the farmer, the CFAP yield will be 85% of the benchmark yield used for the Agriculture Risk Coverage-County Option program.
Poultry and livestock will be paid this way:
- Broilers and egg payments will be based on 75% of the farm’s 2019 production.
- Dairy payments will be based on actual production from April 1 to Aug. 31 and an estimate by the Farm Service Agency of production from Sept. 1 to Dec. 31. The dairy payment rate is $1.20 per hundredweight. Goat's milk also is eligible for payments at varying rates.
- Beef cattle, hogs and pigs, and lambs and sheep payments will be based on the maximum owned inventory of eligible livestock, excluding breeding stock, on a date selected by the producer between April 16 and Aug. 31.
Payments for cattle and hogs will be calculated by multiplying the number of payment limitations for the producer, multiplied by the payment rate for each species. The payment rates are $55 per head for beef cattle and $23 for hogs and pigs. The payment rate for lambs and sheep is $27 per head.
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Crops such as hemp that don’t qualify for payments under the price-trigger method either because they didn’t have a 5% price decline or don’t have sufficient price data available can qualify for payments at a flat rate of $15 per acre.
Row crops that will qualify for the flat rate include alfalfa, buckwheat, canola, extra long staple cotton, oats, peanuts, rice, hemp, millet, mustard, peanuts, safflower, sesame, sugarcane, sugar beets, teff, triticale, and rapeseed.
The third category of commodities can qualify for payments based on sales. They include “specialty crops; aquaculture; nursery crops and floriculture; other commodities not included in the price trigger and flat-rate categories, including tobacco; goat milk; mink (including pelts); mohair; wool; and other livestock (excluding breeding stock) not included under the price trigger category that were grown for food, fiber, fur, or feathers,” USDA says.
Payments for fruits, vegetables, horticulture, tree nuts, honey, and maple sap will be calculated on a “a sales-based approach, payment rates vary by the amount of sales. Producers with sales of less than $50,000 will be paid at a rate of 10.6% of the sales amount. For sales over $50,000, the payment rate lowers in increments to 8.8% for sales of more than $1 million.
Payments will be limited to $250,000 per producer for all commodities combined, regardless of the payment type. CFAP-1 had a similar cap.
USDA isn't prorating the CFAP-2 payments, reflecting the department's confidence that the $14 billion in available funding will be sufficient. Farmers who applied for the first round received an initial payment of 80% of the amount for which they qualified. The remaining 20% was paid after it was clear there would be plenty of money left.
A USDA spokesperson said in an email, "USDA rigorously analyzed the impacts of market disruptions and associated costs caused by COVID-19 on production agriculture. This analysis was used to determine how USDA would make payments as well as how much funding would be needed (factoring in the effects of payment limitations and adjusted gross income limits)."
Despite the expansion fo the program, some commodities are specifically ineligible for CFAP-2:
- Hay, except alfalfa, and other crops intended for grazing.
- Horses, pets, and animals raised for breeding stock or game.
- Birdsfoot and trefoil, clover, cover crop, fallow, forage soybeans, forage sorghum, gardens (commercial and home), grass, kochia (prostrata), lespedeza, milkweed, mixed forage, pelts (excluding mink), perennial peanuts, pollinators, sunn hemp, vetch, and the seed of ineligible crops.
Losses to contract poultry growers won't qualify for payments either. USDA officials say that would require a change in law.
But many farm groups applauded the program's expansion. The California Farm Bureau Federation noted that wine grapes, raisins and pima cotton had been added. “We appreciate the administration’s flexibility in adjusting CFAP to make it available to a wider range of farmers and ranchers in a wider range of circumstances,” said the group's president, Jamie Johansson.
Oklahoma GOP Rep. Frank Lucas, a former House Agriculture Committee chairman who led a group of lawmakers pushing USDA to make all wheat classes eligible for payments, applauded the CFAP-2 rules.
"The coronavirus pandemic has weakened market positions across all commodities throughout the nation and, whether you’re a wheat farmer who wrapped up harvest in May or those looking ahead to harvest in the coming weeks, CFAP 2 will help those weather the uncertainties of the pandemic," Lucas said.
According to the latest weekly report, USDA has paid out $9.9 billion in the first round of CFAP, which launched in May. Enrollment ended Sept. 11. The first round was initially estimated to cost $16 billion.
Iowa farmers have received the largest share of CFAP payments, $961 million, followed by Nebraska ($701 million), California ($606 million), Minnesota ($601 million) and Texas ($598 million).
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