This week, the USDA announced details on how it will distribute $16 billion in direct payments to farms impacted by the COVID-19 pandemic and public health response. The funding for these payments came from the CARES Act that Congress passed in late March, as well as the Commodity Credit Corporation, a USDA-run financial institution that funds many farm programs and commodity purchasing programs.  The details for the payments are available on USDA’s website for Coronavirus Food Assistance Program.

ELIGIBLE CROPS

USDA has determined that these crops suffered at least a 5% price decline or loss due to significant market disruptions from the pandemic from January through April 2020.

• Non-specialty Crops malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat, and hard red spring wheat
• Wool
• Livestock: cattle, hogs, and sheep (lambs and yearlings only)
• Dairy
• Specialty Crops
  • Fruits: apples, avocados, blueberries, cantaloupe, grapefruit, kiwifruit, lemons, oranges, papaya, peaches, pears, raspberries, strawberries, tangerines, tomatoes, watermelons
  • Vegetables: artichokes, asparagus, broccoli, cabbage, carrots, cauliflower, celery, sweet corn, cucumbers, eggplant, garlic, iceberg lettuce, romaine lettuce, dry onions, green onions, peppers, potatoes, rhubarb, spinach, squash, sweet potatoes, taro
  • Nuts: almonds, pecans, walnuts
  • Other: beans, mushrooms

PAYMENT RATES

USDA has set up different payment rates for each eligible crop. The rates are listed on the program website. (Note: the charts with the payment rates show two columns that split the payment by the source of funding, but the payment should be based on combining the two columns.) USDA is planning to pay 80% of the payment rate in this round of funding, and making the final 20% payment later in the year if funding is still available.

ELIGIBLE PRODUCERS

Producers must have an average adjusted gross income of less than $900,000 for tax years 2016, 2017, and 2018. If 75% of adjusted gross income comes from farming, ranching, or forestry, the limit of $900,000 does not apply.

Producers and legal entities also must:

• Meet the conservation compliance provisions;
• if a foreign person, provides land, capital, and a substantial amount of active personal labor to the farming operation; and
• not have a controlled substance violation.

PAYMENT LIMIT

USDA has set a $250,000 maximum payment per individual/operation. Corporate entities with multiple shareholders may be able to collect up to three $250,000 payments.

CROPS NOT ELIGIBLE FOR PAYMENTS

The USDA listed some specific crops that are not eligible for payments, including sheep more than two years old, eggs/layers, soft red winter wheat, hard red winter wheat, white wheat, rice, flax, rye, peanuts, feed barley, Extra Long Staple (ELS) cotton, alfalfa, forage crops, hemp, and tobacco.

There is a comment period open until June 21^st to request that USDA add more crops that will be eligible for payments. The request would need to demonstrate the price loss due to disruption from the pandemic. Details found here.

HOW TO APPLY

The Farm Service Agency is the USDA division that will handle applications for these direct payments. They will start accepting applications on Tuesday, May 26, 2020.

The USDA is advising people to schedule an appointment now to talk to FSA. You can find your local FSA office on the USDA’s website (bottom of the page).

If you are already in the FSA system, some of the information you will need to apply for these payments should already be on file (farm number, adjusted gross income information, etc.) If you have not worked with the FSA system before, take a look at the list of information they will need from you to get started on the website.

The USDA has also posted a short video on what the direct payment application will look like.