Coronavirus Food Assistance Program – CFAP

The United States Department of Agriculture (“USDA”) announced very high-level details regarding the Coronavirus Food Assistance Program (“CFAP”) on April 17, 2020. The CFAP is designed to provide money directly to crop and livestock producers to solidify the food chain during COVID-19.

Finally, one month after the initial release, the USDA has issued an updated announcement and final rules about the program. The most helpful website is https://www.farmers.gov/cfap.

To receive money through the $16 billion program (paid directly to you through your local FSA office), eligible producers must:

1. Certify they meet the Adjusted Gross Income limitation of $900,000 unless at least 75% or more of their income is derived from farming, ranching or forestry-related activities;
2. Have experienced a 5% decline in commodity prices between January and April 2020; or
3. Have experienced “increased marketing costs” due to coronavirus.

Commodities include non-specialty crops (including corn, soybeans, oats, and sorghum), cattle, hogs, and dairy, among others.

Each commodity has different payment calculations, but the USDA will provide a Microsoft Excel spreadsheet on March 26, 2020 allowing producers to calculate their total payment based on their circumstances. The USDA released a YouTube video previewing the spreadsheet.

Eligible producers have a payment limitation of $250,000 per person or up to $750,000 per entity with multiple shareholders/members who actively participate in the operation. These amounts are capped based on all of your commodities eligible for payments, combined. Farmers will receive 80% of their total payment in a first-round payment from the FSA and the remaining 20% is scheduled to be paid at a later date.

Producers who are interested in the program should take action now to be ready when the FSA begins accepting applications on Tuesday, May 26, 2020.

Applications can be made through August 28 or until funds are exhausted.

It’s unclear what documentation you will need for the application, but you should prepare and organize written records now. Substantiation is required within 60 days of your application and payments will not be made until all records have been provided to the FSA office.  The USDA hopes to have payments in the hands of producers 7-10 days after all documentation has been provided.

1. Corn and Soybean Producers
   1. Obtain your 2016-2019 tax returns; and
   2. Prepare a written record of (i) your 2019 production for the commodity that suffered a five percent-or-greater price decline, and (ii) your total 2019 production that was not sold as of January 15, 2020.
2. Livestock Producers
   1. Obtain your 2016-2019 tax returns; and
   2. Prepare a written record of your (i) total sales of eligible livestock, by species and class, between January 15, 2020, to April 15, 2020, of owned inventory as of January 15, 2020, including any offspring from that inventory; and (ii) your highest inventory of eligible livestock, by species and class, between April 16, 2020, and May 14, 2020.

It is also unclear whether producers who have received other coronavirus support (including PPP loans or EIDL) qualify for CFAP.

Additional questions should be directed to your local FSA office or the BrownWinick attorney you work with.