NPPC Update Regarding USDA Coronavirus Food Assistance Program Details

Today, USDA formally unveiled details of its Coronavirus Food Assistance Program (CFAP), which provides direct payments to farmers impacted by the COVID-19 crisis. The program includes $3 billion in planned agricultural product purchases and $1.6 billion in direct payments to hog farmers. [Source: NPPC 19 May 2020]

According to the details announced today, CFAP will:

• Provide payments directly to farmers who have suffered a five percent-or-greater price loss and who are facing significant marketing costs due to COVID-19. USDA intends to issue a single payment to each eligible producer, with the total calculated based upon the two funding sources: the CARES Act and the Commodity Credit Corporation (CCC). The CFAP final rule defines hogs as "any swine 120 pounds or more" and pigs as "any swine weighing less than 120 pounds." Under the CARES Act, payment for income loss will be based on the actual sales of hogs and pigs sold between Jan. 15 and April 15, 2020, multiplied by the CARES Act rate ($18/head for hogs, $28/head for pigs). Payments from CCC to aid in the removal or disposition of surplus agricultural commodities and for additional marketing and production costs will be based on a producer's unpriced hog and pig inventory between April 16 and May 14, 2020, multiplied by the CCC payment rate of $17/head for hogs and pigs;
• Provide eligible farmers with 80 percent of the total payment, up to the payment limit, upon approval of the application. The remaining 20 percent will be paid at a later date as funds remain available; and
• Include payment limitations of $250,000 per individual, as well as a $900,000 Adjusted Gross Income limit for individuals who do not derive 75 percent or more of their income from farming. Corporations, limited liability companies and limited partnerships that can certify that up to three members of the corporate entity provide at least 400 hours of active personal management or personal labor may be eligible to receive payments up to three times the limit.