USDA Unveils Pandemic Assistance for Producers

March 26, 2021 | Kristine A. Tidgren

Update: Sign-up for this program opened April 5.

On March 24, 2021, USDA Secretary Vilsack announced a new program to assist farmers, ranchers, and producers who “felt the impact of COVID-19 market disruptions.” Called “USDA Pandemic Assistance for Producers,” the program is intended to “reach a broader set of producers” than previous aid. The announcement explains that the agency will devote more than $12 billion to this relief, which will include expanding existing aid and creating new programs.

The USDA will reopen the second Coronavirus Food Assistance Program (CFAP 2) to allow additional producers to apply and will issue additional assistance (CFAP AA) provided by the Consolidated Appropriations Act, 2021 (CAA). The additional assistance, which was initiated January 19, 2021, by the prior administration, was placed under administrative review on January 26, 2021, after President Biden took office.  Most farmers who already applied for CFAP 2 will not need to reapply, but producers should watch for announcements from their FSA office. Sign-ups for CFAP 2 will reopen for at least 60 days beginning April 5, 2021.

The Pandemic Assistance for Producers program will also comprise new programs that will “put a greater emphasis on outreach to small and socially disadvantaged producers, specialty crop and organic producers, timber harvesters, as well as provide support for the food supply chain and producers of renewable fuel, among others.” These programs are needed, the announcement explained, because the agency’s review of previous COVID-19 relief “identified a number of gaps and disparities in how assistance was distributed, as well as inadequate outreach to underserved producers and smaller and medium operations.”

The notice clarified that payments paid through the CFAP program will be made under existing rules, but that future Pandemic Assistance will be reviewed for need. The USDA will be attempting during the rulemaking process to align eligibility with that required under the Farm Bill.

The announcement details four parts to the newly-named USDA Pandemic Assistance for Producers program.

Part One: $6 Billion to Expand Help and Assistance to More Producers (New Program)

The USDA will spend $6 billion, funded by discretionary money from the CAA and other unspent COVID-19 relief funds, to provide assistance for the following:

  • Dairy farmers through the Dairy Donation Program or other means
  • Euthanized livestock and poultry
  • Biofuels
  • Specialty crops, beginning farmers, local, urban and organic farms
  • Costs for organic certification or to continue or add conservation activities
  • Other possible expansion and corrections to CFAP that were not part of today’s announcement such as to support dairy or other livestock producers
  • Timber harvesting and hauling
  • Personal Protective Equipment (PPE) and other protective measures for food and farm workers and specialty crop and seafood producers, processors and distributors
  • Improving the resilience of the food supply chain, including assistance to meat and poultry operations to facilitate interstate shipment
  • Developing infrastructure to support donation and distribution of perishable commodities, including food donation and distribution through farm-to-school, restaurants or other community organizations
  • Reducing food waste

The notice states that “when rulemaking is required,” it will begin this spring. No further details for these new programs have been released.

Part Two: An Additional $500 million for Existing Programs

The announcement details that USDA will be investing an additional $500 million to provide expedited assistance, through April 30, for these existing programs:

  • $100 million for the Specialty Crop Block Grant Program
  • $75 million for the Farmers Opportunities Training and Outreach program
  • $100 million for the Local Agricultural Marketing Program
  • $75 million for the Gus Schumacher Nutrition Incentive Program
  • $20 million for the Animal and Plant Health Inspection Service to improve and maintain animal disease prevention and response capacity, including the National Animal Health Laboratory Network
  • $20 million for the Agricultural Research Service to work collaboratively with Texas A&M on the critical intersection between responsive agriculture, food production, and human nutrition and health
  • $28 million for NIFA to provide grants to state departments of agriculture to expand or sustain existing farm stress assistance programs
  • Approximately $80 million in additional payments to domestic users of upland and extra-long staple cotton based on a formula set in the CAA that USDA plans to deliver through the Economic Adjustment Assistance for Textile Mills program

Part Three: Formula Payments under CFAP 1, CFAP 2, and CFAP AA

The announcement explained that certain direct payments authorized by the Consolidated Appropriations Act are “self-enacting,” meaning that the agency must make the payment according to a statutory formula. USDA states that it will be expediting these required payments..

Increased CFAP 1 Payment Rates for Cattle.

Cattle producers with approved CFAP 1 applications will automatically receive supplemental payments beginning in April, based upon a mandated formula in the CAA. These farmers do not need to submit new applications because the payments will be based upon their CFAP 1 applications. The additional payments of more than $1.1 billion will be made to approximately 410,000 producers.

The “top-up” payments to cattle producers are based on the producer’s eligible highest owned inventory between April 16, 2020, to May 14, 2020, on an approved CFAP 1 Application (AD-3114). FSA will calculate these payments based on AD-3114 inventory using the following payment rates.

Note: Although they were part of the relief announced on January 17, any “top up” payments for swine producers are on hold, pending further review.

Additional CFAP 2 payments for Price Trigger and Flat-Rate Crops

An additional payment of $20 per acre will be made to producers of eligible crops identified as CFAP 2 flat-rate or price-trigger crops beginning in April. These crops include alfalfa, corn, cotton, hemp, peanuts, rice, sorghum, soybeans, sugar beets, wheat and others. These “top up” payments will also be automatic, based upon eligible acres included on approved CFAP 2 applications (AD-3117). Producers should not submit new CFAP 2 applications unless they have not already submitted one. USDA estimates these additional payments will be made to more than 560,000 producers and will total more than $4.5 billion, according to the mandated formula.

CFAP Additional Assistance

In addition to processing these automatic payments, the agency will be finalizing application review and payment processing for certain applications that have been filed and may be filed as part of the CFAP AA. This includes additional assistance under CFAP 2 for the following:

  • Applications filed for pullets and turfgrass sod
  • A formula correction for row-crop producer applications to allow producers with a non-Actual Production History (APH) insurance policy to use 100% of the 2019 Agriculture Risk Coverage-County Option (ARC-CO) benchmark yield in the calculation
  • Sales commodity applications revised to include insurance indemnities, Noninsured Crop Disaster Assistance Program payments, and Wildfire and Hurricane Indemnity Program Plus payments

Note: Additional payments for swine producers and contract growers under CFAP AA remain on hold and, according to USDA, are likely to require modifications to the regulation as part of the agency's broader evaluation and future assistance; however, FSA will continue to accept applications from interested producers.

Part 4: Reopening CFAP 2 Sign-Up to Improve Access & Outreach to Underserved Producers

USDA will re-open the CFAP 2 application period for all producers, for at least 60 days beginning on April 5, 2021. FSA will spend at least $2.5 million on direct outreach efforts to ensure that socially disadvantaged communities are informed and aware of the application process.

During this application period, prior CFAP applicants may also request an increase in their payment limitation if their earlier CFAP 1 or CFAP 2 application did not reflect all members (up to three) who provided 400 or more hours of active personal labor, active personal management, or a combination thereof. Unlike other farm programs, CFAP provides these special payment limitation rules to applicants that are corporations, LLCs, LPs, trusts, or estates. The CFAP payment limitations for these entities are as follows:

  • Entity with one active member - $250,000
  • Entity with two active members - $500,000
  • Entity with three active members - $750,000

As the new programs are refined and unveiled, producers should regularly visit for program updates.