FSA accepting applications for CFAP funds

South Dakota farmers and ranchers who were already hammered by low prices, last year’s flooding and the U.S.-China trade war were rocked again by the COVID-19 pandemic. Fortunately, the federal government is providing some relief through the Coronavirus Food Assistance Program (CFAP).

An application period for the new program opened May 26. Farmers can apply for direct payments any time through August 28 by contacting their local Farm Service Agency office. During the past two weeks, more than 86,000 applications were filed nationally. As of June 8, South Dakotans have filed more than 6,900 applications and been approved for more than $80 million in payments, ranking among the top five states.

Two websites will provide much more information about the program. You can find a detailed breakdown of the program and a payment calculator at https://www.farmers.gov/cfap. For answers to a long list of frequently asked questions, visit farmers.gov/cfap/faq.

South Dakota Corn hosted a conference call June 3 with U.S. Rep. Dusty Johnson and FSA Administrator Richard Fordyce to provide information about the program and answer questions. Johnson called the payments a “very good first step.”

Johnson said he and others in Congress realize the relief package isn’t nearly enough so he and Rep. Austin Scott of Georgia introduced a bill that would provide an additional $50 billion to USDA to expand relief efforts for farmers and ranchers.

“Our producers and our supply chains are at a breaking point,” Johnson said.

Fordyce agreed with Johnson that the dollar amounts aren’t enough, but said they help.

“This does not get folks whole,” Fordyce said. “But it’s our way of doing something.”

Fordyce emphasized that many FSA programs have a limit of $125,000, but they were able to bump the limit of this one up to $250,000.

CFAP provides payments to producers of agricultural commodities who have suffered a 5-percent-or-greater price decline over a specified time as a result of the pandemic and face increased marketing costs for their inventories.

Eligible commodities include:

• Non-specialty crops: corn, soybeans, sorghum, durum wheat, hard red spring wheat, oats, sunflowers, malting barley, canola, millet and upland cotton
• Livestock: cattle, hogs and sheep (lambs and yearlings only)
• Dairy
• Wool

Crops intended for grazing aren’t eligible.

CFAP is available to an individual or legal entity who shares in the risk of producing a crop or livestock and who either: a) is entitled to a share in the crop or livestock available for marketing, or b) would have shared had the crop or livestock been marketed. Processing entities are ineligible.

Producers will be paid based on inventory subject to price risk held as of January 15, 2020. A single payment will be made based on 50 percent of a producer’s 2019 total production or the 2019 inventory as of January 15, 2020, whichever is smaller, multiplied by 50 percent and then multiplied by the commodity’s applicable payment rates.

To apply, a producer must provide the following:

• Total 2019 production for the commodity that suffered a loss of 5 percent or greater
• Total 2019 production that was not sold as of January 15, 2020

CFAP payments are subject to a per person and legal entity payment limitation of $250,000. This limitation applies to the total amount of CFAP payments made with respect to all eligible commodities.

Unlike other FSA programs, special payment limitation rules are applied to participants that are corporations, limited liability companies and limited partnerships. These corporate entities may receive up to $750,000 based upon the number of shareholders (not to exceed three shareholders) who are contributing at least 400 hours of active person management or personal active labor.

For a corporate entity:

• With one such shareholder, the payment limit for the entity is $250,000;
• With two such shareholders, the payment limit for the entity is $500,000 if at least two members contribute at least 400 hours of active personal labor or active personal management, or combination thereof, with respect to the operation of the corporate entity; and
• With three such shareholders, the limit is $750,000 if at least three members contribute at least 400 hours of active personal labor or active personal management, or combination thereof, with respect to the operation of the corporate entity.

Payment structure

To ensure the availability of funding throughout the application period, producers will receive 80 percent of their maximum total payment, up to the payment limit, upon approval of the application. The remaining portion will be paid at a later date as funds remain available.

How to apply

FSA staff at your local USDA Service Center will work with producers to file applications. Applications may be submitted via mail, fax, hand delivery or electronic means. Call your office prior to sending applications electronically.

The CFAP application and associated forms are available online at farmers.gov/cfap.

More information

For more information about the CFAP program, visit farmers.gov/cfap or contact your local FSA office. Additionally, producers in search of one-on-one support with the CFAP application process can call 877-508-8364 to speak directly with a USDA employee.