USDA Announces CFAP 2
September 21, 2020
On September 18, 2020, the United States Department of Agriculture (USDA) announced details for the Coronavirus Food Assistance Program 2 (CFAP 2). The program’s purpose is to provide $14 billion in direct payment support to farmers who have continued to sustain losses due to price declines as a result of the ongoing pandemic. Eligible commodities include, but are not limited to: corn, soybeans, cattle, sheep, dairy, hogs, and other specialty crops and livestock. See the link to the USDA website at the bottom of this article for a complete listing of eligible commodities. The USDA’s local Farm Service Agency (FSA) offices began accepting applications today, September 21, and applications will be due by December 11.
Row Crop Calculation
Row crop payments, (which include corn and soybeans, among others) will be calculated as the greater of:
- 2020 eligible acres of crop multiplied by $15 per acre, or
- 2020 eligible acres of crop multiplied by a nationwide crop marketing percentage, multiplied by a crop-specific payment rate, multiplied by a producer’s weighted 2020 Actual Production History (APH)
- Livestock payments will be based on a pre-determined rate per head multiplied by a producer’s highest level of inventory, excluding breeding stock, between April 16 through August 31
Maximum Payment Levels
Payments are limited to $250,000 for both entities and individuals. There are special rules that allow some entities to receive up to $750,000 if the entity has three or more owners and three owners each contribute at least 400 hours of active management or labor to the operation. These payment limitations are independent from CFAP 1. Entities and individuals will qualify as long as average adjusted gross income (AGI) is below $900,000 for the 2016, 2017, and 2018 tax years. Producers whose average AGI is above $900,000 for those years can still qualify if 75% or more of their AGI comes from eligible farming activities. In that case, a CPA or attorney will need to certify that 75% or more of AGI comes from farming activities in order to be eligible for funding.
Coordination with PPP, EIDL, and CFAP 1
Participation in either the Payroll Protection Program (PPP), Economic Injury Disaster Loan Program (EDIL), or CFAP 1 does not prevent or limit farmers from receiving CFAP 2 funds.
How to Find More Information
Farmers who wish to apply for CFAP 2 funds are encouraged to reach out to their local FSA office. More information about the CFAP 2, including a full list of eligible commodities, rules, and payment rates, can be found at farmers.gov/cfap. The application and payment calculation tool are available beginning today, September 21.
If you have any questions on the program, please contact your HBE advisor.
This communication and any applicable contents pertaining to COVID-19 employer relief provisions is based on our professional judgment given the facts provided to us and the COVID-19 employer relief provisions guidance as of the date of the communication. Subsequent developments changing the facts provided to us, or differences in the final guidance and regulations once they are issued, may affect the advice provided. These effects may be material.