COVID-19 Resource Library
With the major changes that COVID 19 has brought to American society and businesses come questions about the legal changes and consequences to the nation’s agricultural community. This page is meant to provide resources and answers to some frequently asked ag-related questions that have arisen throughout the crisis. It will be regularly updated as new resources become available and new questions arise. If you have a question that is not answered below, please contact us.
Because this is such a quickly developing and changing situation, the information on this page may not reflect the current requirements and best practices. Please note that each question has a date upon which it was added or last updated, and many of the resources linked to will also include a date upon which it was written. Linking to a specific law firm’s resources does not indicate any endorsement of or relationship with that firm or the information included within the resources. Additionally, this information is provided for educational purposes only. If you have concerns that go beyond the scope of what has been discussed in any of the questions below, we encourage you to seek legal advice from a licensed attorney in your area. The questions are meant to provide general information only, and do not constitute any legal advice offered by the National Agricultural Law Center, nor act as a substitute for legal advice and counsel.
Q: What legislation has been enacted to help deal with the impacts of COVID-19 in agriculture? (1/22/21)
To date, six items of legislation have been enacted. Each of those laws are supplemental appropriations legislation designed to provide various forms of economic assistance throughout the U.S. economy. One of the most significant pieces of legislation is the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was enacted on March 27, 2020. An official version of the CARES Act and accompanying legislative history is available at Congress.gov here. The CARES Act provided authority and funding to support the USDA Coronavirus Food Assistance Program (CFAP), which is addressed below.
On December 27, 2020, a second stimulus relief package was enacted under the Consolidated Appropriations Act, 2021 (CAA). An official version of this legislation and accompanying legislative history is available at Congress.gov here. The Consolidated Appropriations Act, 2021 provides additional funding to agricultural programs, such as CFAP, and the Paycheck Protection Program (PPP), which is discussed in detail below.
The other items of legislation enacted thus far are as follows:
- March 6: Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (P.L. 116-123); official text, along with legislative history, is available via Congress.gov here.
- March 18: Families First Coronavirus Response Act (P.L. 116-127); official text, along with legislative history, is available via Congress.gov here.
- April 24: Paycheck Protection Program and Health Enhancement Act (P.L. 116-139); official text, along with legislative history, is available via Congress.gov here.
- June 5: Paycheck Protection Program Flexibility Act of 2020 (P.L. 116-142); official text, along with legislative history, is available here.
The Congressional Research Service published a useful technical summary of legislation enacted in March and April titled, Supplemental Appropriations for Agriculture and Related Industries Due to COVID-19. That report is available here.
Q: There are a number of economic assistance programs available to the agricultural sector, but it is difficult to keep track of them all. Is there a helpful resource that would help me familiarize myself with various programs and how they operate? (1/22/21)
Yes. A primary source is the USDA website that provides information, resources, and announcements of action it has taken — i.e., USDA loans, grading and inspection services, and food safety — to help the agricultural sector. The website is updated as warranted and is available here. Additionally, the USDA Coronavirus Food Assistance Program (CFAP) website is available here. The USDA Farm to Family Food Box program website is available here.
Additionally, the Farmers Legal Action Group (FLAG), Inc. has published a farmer-friendly chart titled, Navigating COVID-19 Relief For Farmers. This chart summarizes many of the programs available to producers as well as key highlights regarding those programs. It also highlights several helpful tips for producers to consider. The chart is available on the FLAG website here.
Q: What is the CARES Act, and where can I find the official version of the CARES Act? (last updated 6/25/20)
The CARES Act is the acronym used to describe the Coronavirus Supplemental Appropriations Act (P.L. 116-136). The Act became law on March 27, 2020, approximately one week after it was initially proposed in Congress. The Act is more than 300 pages in length and appropriates more than $2 trillion to mitigate the economic damage caused by COVID-19. An official version of the CARES Act and accompanying legislative history is available at Congress.gov here.
The CARES Act is often referred to as “Stimulus Three” or “Phase Three” because it was preceded by two additional stimulus packages — the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 and the Families First Coronavirus Response Act. As noted above, the CARES Act provides authority and funding to support the ongoing Coronavirus Food Assistance Program (CFAP). Additional information regarding the CARES Act as well as CFAP is set out in the questions below.
Q: Is there a good overview resource that outlines the CARES Act? (last updated 1/22/21)
Yes! There are several. One, by the Texas A&M Agricultural and Food Policy Center, is available here. Additionally, the Farmers’ Guide to COVID-19 Relief, written by the Farmer’s Legal Action Group, is available here. It outlines not only CARES Act relief, but also information about other federal agency changes in response to COVID. Finally, another resource is titled CARES Act Questions for the Agricultural Industry, and is available here. This article addresses in detail numerous issues, including employment considerations, the interrelationship between the CARES Act and the Families First Coronavirus Response Act, tax considerations, and midsized business lending.
Q: Of the $2 trillion appropriated in the CARES Act, how much is allocated for USDA?(last updated 6/25/20)
The CARES Act allocated nearly $50 billion to USDA, spread across multiple agencies and for multiple purposes. For an excellent explanation of the agency-by-agency breakdown of funding allocations, see the farmdoc daily publication Reviewing USDA Funding in the CARES Act, available here. A portion of this funding is used for the USDA Coronavirus Food Assistance Program (CFAP), which is discussed below.
Q: What is the Consolidated Appropriations Act, 2021, and where can I find the official version of the Consolidated Appropriations Act (last updated 1/25/21)
The Consolidated Appropriations Act, 2021 (CAA) (P.L. 116-260) contains the most recent COVID-19 stimulus relief bill. One of the largest spending bills ever enacted, the Act became law on December 27, 2020, and provides $900 billion in stimulus relief to remedy the negative effects of COVID-19 within the U.S. An official version of the CAA and accompanying legislative history is available at Congress.gov here.
The stimulus package is located in Division M of the CAA, titled “Coronavirus Response and Relief Supplemental Appropriations Act, 2021” and in Division N of the legislation, titled “Additional Coronavirus Response and Relief.” This stimulus package extends funding to many of the programs established under the CARES Act, included CFAP and the Paycheck Protection Program (PPP). Further information on the stimulus relief under the CAA is discussed in the questions below.
Q: Is there a good overview resource that outlines the CAA? (last updated 1/25/21)
The Center for Agricultural Law and Taxation at Iowa State University provides a great overview of the taxation and loan provisions of the CAA. Also, the American Farm Bureau Federation published a breakdown of the agricultural provisions of the CAA, which is available here.
Q: Of the $900 billion appropriated in the CAA, how much is allocated for agriculture? (last updated 1/25/21)
The CAA allocated $13 billion to support agricultural assistance programs. Out of this $13 billion, almost $11.2 billion is assigned to the USDA’s Office of the Secretary. The agricultural provisions of the stimulus package contain specific instructions on how the USDA Secretary is to spend the relief funds. For an explanation of funding allocations under the CAA, see the U.S. House of Representatives House Agriculture Committee publication of a detailed, Title-by-Title summary of the relevant food and agriculture provisions of the relief package, which is available here. A majority of the funding allocated to the Secretary is used for the USDA Coronavirus Food Assistance Program (CFAP), which is discussed below.
Q: What is the Paycheck Protection Program and the Economic Injury Disaster Loan Program (last updated 1/25/21)
The Paycheck Protection Program (PPP) is a business loan program that was created by the CARES Act, and is administered by the Small Business Administration (SBA). This program provides forgivable loans to certain businesses to pay their payroll and other costs associated with the business. Since creating the program, additional legislation has been enacted to appropriate more funds to the SBA to continue supplying PPP loans to businesses. The CAA stimulus package allocated $284 billion to the SBA to further fund the PPP. Additional information on the PPP is available on the SBA website here.
The Economic Injury Disaster Loan Program (EIDL) is also a business loan program implemented by the SBA, but provides businesses a different form of financial assistance. This program offers loans to eligible businesses that have suffered a loss in revenue due to the effects of COVID-19. Businesses use the loan for working capital and normal operating expenses, such as accounts payable, fixed debts, utilities, and rent. The CAA also extended the EIDL program. More information on this loan program can be found here.
Q: Are farming operations eligible for the Paycheck Protection Program and the Economic Injury Disaster Loan Program? (1/26/21)
Yes. There was considerable confusion regarding this question when the PPP initially launched, but the CAA relief package made favorable changes to the PPP and EIDL for farming operations. The following useful resources address these changes under the recently enacted stimulus package:
- What Changes Are in the New Stimulus Bill That Affect Farmers?, available here (farmdoc daily).
- Note: this article also addresses the Employee Retention Credit (ERC).
- SBA Has Issued Rules for First Draw, Second Draw, and Increased PPP Loans, available here (Center for Agricultural Law & Taxation).
- Paycheck Protection Program (PPP 1 and 2) and the Employee Retention Credit (ERC), available here (University of Minnesota Extension).
Q: What is the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020, and how is it relevant to agriculture? (6/25/20)
The Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (P.L. 116-123) appropriated $8.3 billion to help prepare for and respond to the threat of COVID-19 to the U.S. While the Act was an important development, it did not have a direct impact in regards to providing financial or economic support specific to the agricultural sector. The legislation itself was primarily geared towards providing funding for the Department of Health and Human Services (including the Food and Drug Administration and the Center for Disease Control and Prevention), the Small Business Administration, and the Department of State. The official text, along with legislative history and a summary of the Act, is available via Congress.gov here.
Q: What is the Families First Coronavirus Response Act (P.L. 116-127), and how is it relevant to the agricultural sector? (1/26/21)
The Families First Coronavirus Response Act (P.L. 116-127) built upon the foundation established under the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020, providing additional funding and authorities to multiple agencies to help combat and offset the impacts of COVID-19. The agriculture-related provisions under the Act provided additional funding and authority to USDA to expand nutrition programs, principally including the Nutrition Program for Women, Infants, and Children (WIC) and the Emergency Food Assistance Program (TEFAP). The official text of the Act, along with legislative history, is available via Congress.gov here.
Q: What is the Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139), and how is it relevant to the agricultural sector? (6/25/20)
The Paycheck Protection Program and Health Care Enhancement Act was enacted on April 24. The official text of that law is available here. Also known as “Stimulus 3.5” the Paycheck Protection Program and Health Care Enhancement Act updated important aspects of the CARES Act, including providing new funding for the Paycheck Protection Program and making “agricultural enterprises” eligible for the Economic Injury Disaster Loan (EIDL) program. An excellent explanation of the Stimulus 3.5 legislation and its application to agriculture, Congress Authorizes More Funds for PPP and EIDL and Says Farms Can Apply, is published by the Center for Agricultural Law & Taxation at Iowa State University and is available here.
Q: What is the Paycheck Protection Program Flexibility Act of 2020, and how is it relevant to the agricultural sector? (6/25/20)
The Paycheck Protection Program Flexibility Act of 2020 eased various requirements for the Paycheck Protection Program. These changes include extended the loan repayment period for new loans from two years to five years and reduced the amount of the loan that must be attributed to payroll from 75% to 60%. A more in-depth review of the changes instituted under the Paycheck Protection Program Flexibility Act is published by the Center for Agricultural Law & Taxation, available here. The official text of the PPPHCA is available here.
Q: Has SBA issued guidance or regulations regarding implementation of the PPPFA? (6/25/20)
Yes, and it is a good practice to check the SBA website on a recurring basis for any new developments. On June 16, SBA issued an Interim Final Rule titled, Business Loan Program Temporary Changes; Paycheck Protection Program—Revisions to the Third and Sixth Interim Final Rules. That guidance was published at 85 Fed. Reg. 36997, and is available here. On June 22, SBA issued an Interim Final Rule titled, Business Loan Program Temporary Changes; Paycheck Protection Program – Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures Interim Final Rule. That Interim Final Rule is available here.
For an excellent discussion of these two interim final rules, please see SBA Issues Guidance and Forgiveness Applications to Conform with PPP Flexibility Act, available here, published by the Center for Agricultural Law & Taxation at Iowa State University.
Q: Has SBA issued guidance or regulations regarding implementation of the PPP under the CAA? (1/25/21)
Yes. On January 5, 2021, SBA issued two Interim Final Rules. The first rule is titled Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid Act. This rule was published at 86 Fed. Reg. 3692, and is available here. The second rule is titled Business Loan Program Temporary Changes; Paycheck Protection Program Second Draw Loans, which is published at 86 Fed. Reg. 3712, and is available here.
For a great discussion of these two interim final rules, please see SBA Has Issued Rules for First Draw, Second Draw, and Increased PPP Loans, available here, published by the Center for Agricultural Law & Taxation at Iowa State University.
Q: What is the Coronavirus Food Assistance Program (CFAP) and where can I can find more detailed information about it? (2/3/21)
The Coronavirus Food Assistance Program (CFAP) is the USDA-led program designed to provide financial assistance to many producers across the United States. Initially, the program made available $19 billion overall, $16 billion of which was used for direct payments to producers of eligible agricultural commodities who suffered at least a 5% price decline, or who had losses due to market supply chain disruptions due to COVID-19. These payments later became known as CFAP-1. The remaining $3 billion was used to fund the Farm to Family Food Box Program, which is described below, and operates under authority of the Families First Coronavirus Response Act.
On September 18, 2020, the USDA announced a second round of direct payments under CFAP, best known as CFAP-2. This second round of CFAP payments made $14 billion in direct financial assistance available to a broader group of producers. On January 15, 2021, the USDA announced another round of payments, valued at $2.3 billion, known as “CFAP Additional Assistance” or “CFAP-2.1”. USDA issued a final rule to implement the new round of direct payments, which expanded the program’s eligibility requirements to include producers were not eligible to receive assistance under earlier CFAP payments. This rule also included adjustments to payment calculations for certain producers that previously applied for CFAP assistance. However, the Biden Administration has placed a Regulatory Freeze Pending Review on the funds that would be used for CFAP-2.1. Although USDA is not currently providing payments to producers, the agency is still encouraging eligible producers to apply for a direct payment.
Another round of CFAP payments were established under the CAA’s stimulus package, creating CFAP-3. As directed in the bill, most of the $11.2 billion assigned to USDA’s Secretary will be used to provide CFAP-3 direct payments to several different producers in the agricultural industry. The USDA will need to issue regulations on CFAP-3 before producers know whether they are eligible to receive payments, and how to access this aid. Once available, the USDA will publish these regulations on the Federal Register website.
The best resource for detailed information and updates regarding this program is the USDA’s CFAP website, available here.
Q: What is the Farm to Family Food Box Program and where can I find the best resource for additional information? (1/25/21)
The Family Food Box Program is part of the Coronavirus Food Assistance Program (CFAP), although it is not a part of the larger direct payments to producers of eligible commodities aspect of CFAP. When the program initially launched, the USDA made $3 billion available to allow USDA Agricultural Marketing Service (AMS) to contract with suppliers to purchase various food products and deliver them to food banks and others serving people in need of food. Originally, this program was set to end on June 30, 2020. However, AMS received additional funds to continue the program. From May 15, 2020 through December 31, 2020, AMS has conducted a total of four rounds of purchases under the program.
A fifth round of purchases is created under the Consolidated Appropriations Act. On January 4, 2021, the Secretary of Agriculture announced $1.5 billion is being made available to purchase food through the Farmers to Families Food Box Program. The USDA will conduct this fifth round of purchases through the end of April.
The best resource for information regarding this program is the USDA Farm to Family Food Box Program website, available here.
Q: Is the USDA currently accepting applications for CFAP assistance? (2/3/21)
Yes! Although the CFAP-2.1 funds are currently under a regulatory freeze, CFAP-2.1 is still a possibility. USDA is accepting new applications from producers who would be eligible for CFAP-2.1 financial assistance. Also, producers that would be eligible to receive an adjusted payment under the program must modify their previous CFAP application to receive this aid if/when the freeze is lifted on the funds.
The deadline to apply for additional assistance through CFAP-2.1 is February 26, 2021. The application and information on submitting a new or modified CFAP application can be found here. Potential updates on the freeze and information on this assistance can be found at farmers.gov here.
Q: Is the USDA currently sending CFAP-2.1 direct payments to eligible producers? (2/3/21)
No. The Biden Administration has placed a Regulatory Freeze Pending Review on the $2.3 billion to be used for CFAP-2.1 payments. This regulatory freeze prevents USDA from using the $2.3 billion at this time. While CFAP-2.1 is still a possibility, USDA is not currently sending payments to eligible producers while the regulatory freeze is still on the funds. However, eligible producers are encouraged to submit applications in order to be eligible for a payment, if/when that freeze is lifted.
Q: Where can I find the official text of the CFAP regulations? (2/3/21)
The CFAP regulations are published at 7 C.F.R. Part 9. The initial regulations were published in the Federal Register on May 21, 2020 at 85 Fed. Reg. 30825. On May 22 (85 Fed. Reg. 31062), June 12 (85 Fed. Reg. 35799), July 10 (85 Fed. Reg. 41328), August 14 (85 Fed. Reg. 49593), and September 21 (85 Fed. Reg. 59174), the USDA issued Correcting Amendments that are particularly important for livestock, dairy, and specialty crop producers seeking CFAP assistance.
On January 19, 2021, the USDA published a new CFAP regulation to implement the agency’s recent decision to provide CFAP-2.1 financial assistance. This final rule is published at 86 Fed. Reg. 4877, available here. Even though USDA issued this rule, it is currently not in effect due to the regulatory freeze. USDA may issue a new rule to implement CFAP-2.1 after the Biden Administration has reviewed the program.
CFAP-3 has not yet been implemented, but the USDA is preparing to implement the program in accordance with the agricultural provisions contained in the CAA stimulus package. USDA will likely publish additional rules that indicate who is eligible for CFAP-3 direct payments, and how a producer can access the aid.
Q: What producers and commodities would be eligible for financial assistance under CFAP-2.1? (2/3/21)
Although CFAP-2.1 regulations may change after the review of the program is complete, it is possible the program may be implemented as initially designed. If the Biden Administration lifts the freeze on the CFAP funds with no changes to the regulations, the following producers and commodities would be eligible for additional assistance under CFAP-2.1: (1) contract livestock producers who raised livestock in 2019 and 2020, (2) pullet producers, and (3) turfgrass sod producers. The USDA is also adjusting payment calculations for certain commodities under CFAP-2.1. The commodities eligible for payment adjustment include: (1) nursery crops and floriculture, (2) aquaculture, (3) swine, (4) certain row crops, (5) specialty crops, (6) specialty livestock, and (7) tobacco.
For additional eligibility requirements and details on actions producers must take to submit or update their CFAP application, visit the USDA CFAP page here.
Q: If a producer or operation participates in other federal farm programs, including the Paycheck Protection Program or Economic Injury Disaster Loan Program, is that person or entity eligible for CFAP-2.1? (1/25/21)
Yes. The fact that a producer or operation participated in the PPP or EIDL does not affect eligibility for CFAP.
Q: What must a producer do if they applied for CFAP-2, but also produce newly eligible commodities? (1/25/21)
If a producer previously applied for CFAP-2, but also produces pullets, turfgrass sod, or livestock under contract, USDA allows producers to modify their existing CFAP application. Producers of these newly eligible commodities with an existing application will need to contact their local USDA Service Center to include these commodities produced to their existing application. Further information on modifying an existing CFAP application is available on the USDA CFAP website here.
Q: How is CFAP-2.1 funded? (2/3/21)
When CFAP initially launched, it was funded in two ways – by appropriations provided in the CARES Act and through borrowing authority of the Commodity Credit Corporation (CCC) as authorized by the Commodity Credit Corporation Charter Act. In July 2020, USDA’s CCC borrowing authority increased by $14 billion. The USDA used this additional borrowing authority to fund CFAP-2. Funds remain from CFAP-1 and CFAP-2 would be used to fund the additional assistance provided by CFAP-2.1 if the program continues after the regulatory freeze is lifted.
Q: How is CFAP-3 funded? (1/25/21)
CFAP-3 is being funded by the stimulus package contained within the Consolidated Appropriations Act. A large portion of the $11.2 billion provided to the Secretary of Agriculture under the CAA will be used to fund CFAP-3.
Q: What are the basic eligibility requirements for CFAP? (2/3/21)
For full eligibility information, one should review the information set forth at 7 C.F.R. Part 9 as well as the information provided on the USDA CFAP web page here. That said, under the current regulations, the basic eligibility requires a producer or legal entity to submit the application made available at the USDA CFAP website (here), along with any required documentation. The person or legal entity applying for CFAP assistance must be in the business of farming at the time they submit their application. For a contract producer who would be eligible for CFAP-2.1 assistance, they must have raised swine or poultry under contract and suffered a loss in revenue in 2020 as compared to 2019. Also, producers applying for CFAP must comply with USDA’s Conservation Compliance regulations, commonly known as “Swampbuster” and “Sodbuster.”
According to the USDA, see 86 Fed. Reg. 4877, eligible “contract producers” are those “producers who grow or produce an eligible commodity under contract for or on behalf of another person or entity and are not entitled to a share from sales proceeds of the commodity….”
Q: Are there payment limitation requirements for CFAP-2.1? (2/3/21)
Yes. If the CFAP-2.1 final rule is implemented after the regulatory freeze, there would be unique payment limits specific to CFAP applicable to corporations, limited liability companies, and limited partnerships. Generally, CFAP payments would be subject to $250,000 payment limit, which is applicable to the total amount issued for all commodities. However, corporations, limited liability companies, and limited partnerships would be able to receive up to $750,000 for up to three members who each provide at least 400 hours of active personal management or personal active labor. This declaration would be self-certifying, like much of the CFAP program, but is done so under the penalty of perjury and other applicable rules. Further details on payment limitations are provided on the USDA CFAP website here.
Q: Would CFAP-2.1 impose Adjusted Gross Income (AGI) limits? (2/3/21)
If the CFAP-2.1 regulations are implemented as initially intended, then yes. A person or entity is would not be eligible if the average AGI for the 2016, 2017, and 2018 tax years exceeds $900,000. If 75% of more of the AGI derives from farming (including ranching and forestry), the applicant would be allowed to receive CFAP payments in an amount up to the applicable payment limitations. If the applicant is a joint venture or general partnership, the AGI requirements would be applicable to each member of the joint venture or general partnership. More information on the AGI limits of this program can be found on the USDA CFAP website here.
Q: What are some noteworthy highlights regarding CFAP that might not be immediately obvious? (2/3/21)
For anyone interested in applying for CFAP, it is important to review the regulations at 7 C.F.R. Part 9 as well as the USDA CFAP website. This is important in understanding the program, but also because aspects of the program (i.e., eligible commodities, eligibility standards) may be modified as the program continues. While the Biden Administration continues to review the CFAP-2.1 program, it is possible the freeze placed on the program may be lifted without changing the program. Before this regulatory freeze on the program, below are some of the specific areas to the program that would not be immediately obvious:
- Applicants would be required to comply with USDA Conservation Compliance regulations and policies, commonly known as “Swampbuster” and “Sodbuster”. Producers with a history of participating in federal commodity and conservation programs will already be familiar with these requirements and the attendant paperwork. Producers without that history, such as many specialty crop producers, may want to factor learning more about these programs into the application process. A producer’s local USDA Farm Service Agency will have resources to assist in this regard.
- The current CFAP rules state that producers who are later determined to have received excess payments can be compelled to refund some or all of the CFAP payments received.
- Producers who would receive CFAP payments “or any other person who furnishes such information to USDA must permit” representatives from USDA or the Government Accountability Office to enter certain premises and inspect and/or copy certain records relevant to the application and receipt of CFAP payments.
Q: From an ag business and farming perspective, what taxation issues should I be thinking about? (1/20/21)
In normal times, agricultural taxation is a specialized area. The Consolidated Appropriations Act presents new issues for individuals and businesses to consider. The Ohio State University Extension recently highlighted taxation issues under the Consolidated Appropriations Act that may impact farm businesses. This publication can be found on their website here.
Q: What are First Draw and Second Draw loans under the Paycheck Protection Program (“PPP”) and what are the eligibility requirements for each? (1/20/21)
The CAA stimulus package allocated $284 billion to the Small Business Administration (SBA) to provide further loans under the Paycheck Protection Program (PPP) to businesses in the U.S. This stimulus package directed SBA to issue “First Draw” and “Second Draw” loans. First Draw (first-time) PPP loans are reserved for businesses that did not receive a PPP loan in 2020, employs 500 or fewer employees, and meet other eligibility requirements. Guidance on the other eligibility requirements and loan amounts can be found in the SBA interim final rule here.
Second Draw PPP loans are available for businesses that previously received a PPP loan, employs no more than 300 employees, had at least a 25% reduction in gross receipts in comparable quarters in 2019 and 2020, among other requirements. SBA recently published an interim final rule for implementing Second Draw loans, which can be viewed here. Also, SBA has provided guidance on how to calculate revenue reduction and loan amounts for Second Draw PPP loans, which can be viewed here.
On January 19, 2021, SBA published another interim final rule on the loan forgiveness requirements for PPP loans. This guidance is available here.
Q: Do H-2A employees count toward the employee limit for a First or Second Draw PPP loan? Are H-2A payroll expenses eligible for reimbursement through the PPP? (1/26/21)
No. According to the Small Business Administration interim final rule, only employees whose “principal place of residence is the United States” count towards the limit and have eligible payroll expenses. Another resource helpful to understanding this question – as well as the PPP in general – is available at the Center for Agricultural Law and Taxation.
Q: Are medical or recreational marijuana businesses eligible for CARES Act funds? (4/9/20)
No, the SBA has issued guidance on the 7(a) loan program (which PPP is based on) prohibiting loans to marijuana businesses because they are illegal under federal law. The fact that they may be legal under a particular state’s law is not relevant. For more information click here.
Q: The federal government has instituted numerous regulatory changes in response to COVID-19. Is there a comprehensive resource to assist in understanding these changes? (4/24/20)
Yes. On April 22, the National Agricultural Law Center hosted a webinar titled, COVID-19: Regulatory Changes Impacting Food Production and Distribution, presented by John Dillard. A recording of the webinar is available here.
LABOR & EMPLOYMENT
Q: What guidance has the CDC released to advise farmers and ranchers on labor issues during COVID-19? (1/26/21)
The Centers for Disease Control and Prevention (CDC) has created interim guidance with the Department of Labor for Agriculture Workers and Employers available here. Also, the two agencies also created interim guidance for Meat and Poultry Processing Workers and Employers available here. These guidelines provide helpful information on protecting both farm laborers and their employers. The CDC provides guidance on work site assessments to ensure that strategies used in the workplace will best protect workers while identifying controls that further safeguard employer/employee protection through sanitation, disinfectant, and cleaning. This site also provides instruction for managing sick workers. Lastly, here is a helpful employer checklist created by the CDC specifically for Agricultural Employers to create awareness of safe work environments.
Q: What guidance has the USDA released to advise farmers and ranchers on labor issues during COVID-19? (1/26/21)
Yes, the main website for U.S. Department of Agriculture’s immediate action in response to COVID-19 is https://www.usda.gov/coronavirus. This website has several detailed resources, from guidance on loans and grants, food assistance, farmer resources, and other topics. Further, the USDA published the COVID-19 Federal Rural Resource Guide, which is a valuable resource matrix designed to inform the public of funding opportunities provided for in the stimulus packages and other federal resources that can help aid rural communities.
Q: What resources are available about the H-2A visa program (1/26/21)?
Specific to the H-2A Visa Program and COVID-19, please click this link. That website is dedicated to compiling various federal government agencies’ guidelines and resources for H-2A and COVID-19, including resources from the CDC, the U.S. Department of Labor, the USDA, and the Department of Homeland Security.
Q: Have any universities/extension agents released information to advise farmers and ranchers on labor issues during COVID-19? (1/27/21)
Additionally, many universities have created their own guidance documents. Cornell University has provided advice for Novel Coronavirus Prevention & Control for Farms, available here. UC Davis has created a COVID-19 Resource page for Agriculture that contains helpful state & federal documents for California, Arizona, Hawaii, and Nevada. The Pacific Northwest Agricultural Safety and Health Center at the University of Washington has also created a page dedicated to agricultural health and safety during COVID-19, and included specific resources for dairy farming. Oklahoma State University Extension’s Coronavirus Resources website is an additional useful page for guidance on COVID-19 impact on business and economic development, food safety, livestock. The website further provides COVID impact reports which detail what effect COVID-19 has had on various industries in rural America, from food production to tourism to electric and agricultural cooperatives. Clemson University Cooperative Extension Service’s website contains useful agribusiness-related resources pertaining to COVID-19.
Q: Are any COVID-19 health and safety resources available in languages other than English? (08/12/20)
Instructions on protecting each other and preventing the spread of COVID-19 is available in several different languages here. This multilingual guide created by the Centers for Disease Control and Prevention serves as a valuable resource on emergency preparedness and response, diseases, environmental health, healthy living lifestyles, workplace safety, and others.
Q: Does President Biden’s Executive Order on travel apply to agriculture? (2/1/21)
On January 25, President Biden issued an Executive Order titled, Proclamation on the Suspension of Entry as Immigrants and Non-Immigrants of Certain Additional Persons Who Pose a Risk of Transmitting Coronavirus Disease. The official text of the Executive Order is available via Whitehouse.gov here. The Executive Order suspends entry into the U.S. for certain individuals from specified countries. Notably, South Africa is one of the countries included in this travel ban. However, this Executive Order does not apply to South African H-2A agricultural workers.
Q: What regulatory changes have been made to the H-2A program due to COVID-19? (1/27/21)
On December, 18, 2020, the Department of Homeland Security (DHS) and U.S. Citizenship and Immigration Services (USCIS) published a temporary final rule that extended certain regulations for temporary and seasonal H-2A agricultural workers. Because of the disruptions in the food supply markets due to COVID-19, DHS and USCIS are permitting H-2A employees who petitioned for an extension of stay to begin work with a new employer immediately after this petition is received by USCIS. This temporary final rule can be viewed here.
Q: What is a good general source of government information dealing with labor laws and policies specific to the impact of COVID-19 for employers and employees? (1/27/21)
A primary source for information pertinent to the federal government response is the U.S. Department of Labor “Coronavirus Resources” page, available here. The DOL page covers numerous issue areas such as workplace safety, supporting the labor needs of the agricultural sector, and numerous guidance documents. The page will be updated, as needed.
The USDA has published the “H-2A Visa Program” page as well, available here. This page contains information on the status of foreign Embassies, guidance on closure of the Mexican border, and other information relevant to securing information on H-2A labor amid COVID-19.
In addition, the Association of State and Territorial Health Officials (ASTHO) has published a COVID-19 page that identifies state-by-state information. Specifically, the ASTHO site provides an interactive national map that allows users to quickly access states’ COVID-19 web pages as well as contact information for states’ Department of Health. The site is not agriculture-specific. The ASTHO site is available here.
Q: Can I use volunteers to help get around labor shortages due to the pandemic? (4/10/20)
The Fair Labor Standards Act still applies and there are requirements that for-profit businesses must abide by even in these unprecedented times. There are some exemptions for agricultural employers that use less than 500 man-days of labor for each quarter during the previous year, use family members as labor, or pay workers on a piece rate basis; however there are also many restrictions and limitations on these exceptions. Ag employers should consult with an attorney before using volunteer laborers.
Q: What can I do about employees that may be ill? (4/10/20)
The U.S. Equal Employment Opportunity Commission has issued guidance on steps that employers can take such as asking employees if they feel ill, taking employee temperatures, and even requiring ill employees to stay home. There may be requirements to keep this information confidential since it is medical information and some states may have additional requirements on confidentiality. For more information visit the EEOC COVID-19 pagehere or for further analysis visit the Fisher Phillips resource pagehere.
Q: Am I still required to provide employees with paid sick or family and medical leave under the Families First Coronavirus Response Act (FFCRA)? (1/27/21)
No. Employers are no longer required to provide its employees with FFCRA leave after December 31, 2020. However, the CAA extended employer tax credits for employers who voluntarily provide paid sick leave and expanded family and medical leave to its employees until March 31, 2021. For more on leave-related responsibilities of an employer, and other COVID-19 workplace information, read the Answers to the Most Common Coronavirus Questions, provided by the Society for Human Resource Management. Employers with questions about claiming the tax credit can find further information on the IRS website here.
Q: Has the Occupational Safety and Health Administration (OSHA) issued any rules for the workplace? (1/29/21)
Sort of! They issued Guidance on Preparing Workplaces for COVID-19 in March 2020. Recently, at the direction of an Executive Order issued by President Biden, OSHA provided Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace. While the guidance does not create new legal obligations, it contains information meant to assist employers in providing a safe and healthy workplace.
Q: Does the Equal Employment Opportunity Commission (EEOC) provide any guidance on COVID-19 vaccination policies for the workplace? (1/28/21)
Yes! The EEOC added a new section to its publication, “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws,” which offers information to employers and employees on how a coronavirus vaccination will interact with employment laws. For a brief summary on this new guidance, visit the Saiber website here.
Q: What do I do if one of my H-2A workers exhibits symptoms of COVID-19? (4/10/20)
Employers are required to provide suitable housing to H-2A employees for employees that are unable to reasonably return to their residence each day. If employees start showing symptoms then it may be necessary to find other accommodations to house them in, such as hotels, if they are currently being housed with other workers. State or local law may also require that individuals showing symptoms of the virus be quarantined for a period of time. For more information visit the AmericanHort Coronavirus Resource Center here. To learn more about housing requirements visit the United States Department of Labor Employment & Training Administration Frequently Asked Questions availablehere. To read more about each state’s authority to quarantine individuals please visit the National Conference of State Legislatures compilation available here.
Q: Can the government quarantine me or my employees? (4/10/20)
The federal government does have the authority to detain people suspected of carrying communicable diseases into the United States or between states. For more information on federal quarantine authority visit the CDC website here. States also have the authority to quarantine individuals; however the power and authority can vary between the states. To read more about each state’s authority to quarantine individuals please visit the National Conference of State Legislatures compilation available here.
Q: Has USDA issued information regarding H-2A and COVID-19? (1/27/21)
Yes. USDA has published a page that addresses issues specific to H-2A and COVID-19 including information on embassy status and guidance for border closure. That page can be found here.
Q: Do I qualify for unemployment insurance if I am under mandatory quarantine? (4/10/20)
A: Yes, under new guidance from the Employment and Training Administration, federal law allows states to pay benefits where an individual is quarantined with the expectation of returning to work after the quarantine is over. More information on this guidance can be found here. You can check your state’s specific unemployment insurance rules here.
Q: Do immigrant workers qualify for unemployment insurance if they’re unable to work? (4/10/20)
A: Immigrant workers may qualify for unemployment insurance, however there are certain criteria in place to determine eligibility. For example, the individual must have a valid work authorization during the base period, at the time that they apply for benefits, and throughout the period during which they are receiving benefits. The National Employment Law Project outlines more specific criteria here.
Q: Are there any steps an employer should be taking now to help protect themselves from future claims? (4/10/20)
Employers are advised to keep documentation of their decisions, and their decision-making process during this turbulent time. Further guidance on how and what to document can be found here.
Q: Are there other H-2A problems or concerns that I need to be aware of as a result of COVID-19? (1/27/21)
The DOL has already published three FAQs on COVID-19 and foreign workers available here, here, here, and here. More information is being made available at the DOL’s Office of Foreign Labor Certification available here.
Additionally, several law firms focusing on H-2A compliance have written FAQs including their perspective of the current situation. Some of them are available here (Phelps Dunbar), here (Fisher Phillips), and here (CJ Lake LLC). Additionally, attorneys from Phelps Dunbar took part in a “Ag Law in the Field” podcast, which is available here.
Q: What if I no longer need my H-2A labor because of the pandemic?
Employers can contact the Department of Labor and request a contract impossibility determination from the Chicago NPC Certifying Officer to terminate work contracts before the end date. Until the request is granted the employer may still be required to pay for travel expenses and ¾ of the hours that they were supposed to work until the contract impossibility determination is issued. For more information visit the DOL FAQ page here.
Q: What if COVID-19, or circumstances surrounding it, prevents me from completing my part of the contract? (4/13/20)
Contract disputes can be difficult to navigate, but the first place that you look for answers is typically found in your contract itself. Does your contract have a force majeure clause? Force majeure, or better known as an Act of God clause, can modify a party’s obligation to perform under a contract for unseen or uncontrollable events that renders the performance difficult or impossible to deliver. It is very important to look at the exact words in the contract to see how broad the clause may be interpreted. If your contract does not have a force majeure clause then you still may have legal arguments available such as frustration of purpose, impracticability or impossibility depending on the unique circumstances in your state. Many individuals may be able to work out a satisfactory arrangement with the other party in the contract to resolve any disputes; however, if the dispute cannot be resolved between the parties then you will likely need an attorney.
Q: What is impossibility for purposes of ending a contract? (4/13/20)
Something has happened that literally makes the contract impossible to complete. You want to buy a specific bull from a livestock owner and the bull dies through no fault of your own before the sale goes through. Nothing is mentioned in the contract about this possible event, but now it is impossible to complete. It is important to note that in states where impossibility is still used that the contract has to be impossible to perform. For more information on impossibility click here.
Q: What is commercial impracticability for purposes of ending a contract? (4/13/20)
Some event occurs that changes a basic assumption that all of the parties relied upon. The event must not be caused by the party wanting to get out of the contract. Finally, that event makes the performance under a contract impracticable to perform. In the absence of a force majeure clause in your contract this is the legal remedy that is closest to that approach. An example would be if you have a building that you are supposed to perform maintenance on and before you finish the job a tornado destroys the building. It may not be impossible for you to completely reconstruct the building, but it is definitely going to take much more time and money to reconstruct the building and in this case the more fair approach is to waive your duty to finish your maintenance. For more information on commercial impracticability click here.
Q: What is “frustration of purpose” and how does it affect contracts that are impacted by a pandemic? (4/13/20)
Frustration of purpose is another legal doctrine that is similar to impracticability in that it is still technically possible to complete the contract, but some basic reason for the two parties to enter into the contract has been frustrated by some unforeseen event. This unforeseen event then removes the value of the contract for one of the parties. For example, I have a contract with a crop duster to spray my field for weeds during the growing season, but before she is able to spray the crop a flood comes along and completely destroys it. The crop duster can still perform her part of the contract, but with the crop destroyed there is no reason why I would want her to spray the field as the entire purpose behind the agreement has been frustrated by the flood. For more information on frustration of purpose click here.
Q: Where can I go to learn more about contracts or leases involving agriculture? (4/13/20)
The National Ag Law Center has a reading room dedicated to agricultural leases available here. There is also an excellent handbook covering many leasing topics including checklists and sample lease forms available here. For a short and simple explanation of agricultural contracts click here.
Q: Is there a resource that discusses force majeure specifically with respect to COVID-19 and agricultural contracts? (4/17/20)
Yes. One such resource is titled COVID-19 & Force Majeure in Agricultural Contracts, and is available here.
Q: Where can I find a lawyer? (4/13/20)
Many attorneys in the United States are still working, albeit maybe remotely! If you have an existing relationship with an attorney in your area, reach out to them to see if they can assist you with your current concern. If you’re trying to find an agricultural attorney in your area, one option is to look at the website of the American Agricultural Law Association. In the lower right hand corner of the homepage, they have a searchable map of association members.
Q: How can I get my important legal documents notarized during the COVID-19 pandemic? (4/16/20)
Many legal documents, including wills, are typically either required to be notarized or they become much more difficult to challenge if they have been properly notarized. Because of social distancing requirements many states have either enacted laws or executive orders that establish procedures for notaries to complete their important work by performing it remotely. To learn more about what states are doing to allow for remote notarization click here.
Q: What if I need legal assistance, but have limited funds? (4/13/20)
Most areas have some form of Legal Aid that can provide assistance for individuals in need. While these groups can usually take a very limited number/type of cases, it is worth calling to ask if assistance can be provided in your situation. Further, some law schools have legal clinics that provide similar assistance, typically for a specific type of cases (such as immigration, taxes, or housing). Search for law schools in your area, then contact them directly.
Q: Are there any low cost legal assistance providers specific to agricultural operations? (4/13/20)
The Food Law Initiative at Pace Law School has launched the COVID-19 Legal Support Project to provide pro bono legal services by the Food and Beverage Law Clinic in association with a New York firm. More information, as well as an email address to contact them for more information or assistance, is available here.
Q: What are my state requirements to write a will? (4/16/20)
For the basic state requirements to write a valid will click here and find your state on the list below. If you are interested in agricultural issues with estate planning visit our Estate Planning and Taxation Reading Room available here. Another great resource on tax and estate planning issues can be found at the Center for Agriculture Law and Taxation here.
Q: Can I write out my own will by hand? (4/16/20)
Holographic wills are wills entirely handwritten and signed by the decedent before they pass away. States vary substantially on what types of handwritten wills can be accepted for probate within each state. It is generally a much better idea to work with an attorney in your jurisdiction in order to create a valid will and simple wills can be drafted fairly quickly so long as the client has a list of their assets, family members and instructions on how they would like the assets to be divided. For general information on holographic wills click here. Another good resource on holographic wills is available here. It is critical that you look specifically at your state’s requirements to ensure that you can write a valid holographic will in your jurisdiction.
Q: Can I draft a will online? (4/16/20)
A: If an online will meets all the legal requirements in your state, it is likely to be considered valid. Much like a holographic will, it is very important that you are aware of the requirements for a valid will in your state and ensure that any will drafted online meets those requirements. Not all online will documents are the same, and it is generally considered good practice to have an attorney in your jurisdiction look over any online will you intend to draft. Click here for more information on what to consider when drafting a will online.
Q: How do I make family members and medical personnel aware of my wishes if I am incapacitated and unable to make decisions for myself? (4/16/20)
There are two basic ways to address this issue. One is to create a living will or advance health care directive that provides written instructions on how you wish to be cared for if you become incapacitated. You can specify what treatments or life support options that you wish for them to use or not use while you are unable to make decisions for yourself. To view basic state requirements on advance health care directives click here. The second option is to designate a medical power of attorney and give someone that you trust the power to make decisions in your place while you are incapacitated. There are numerous medical power of attorney forms online for free and one should select the form that best matches with the kind of authority that they wish to grant to their proxy.
Q: Where can I learn more about a Health Care Power of Attorney (HCPOA) and how to create one? (4/17/20)
One very helpful resource is titled COVID-19: Locating and Registering Health Care Powers of Attorney, available here. The article has some generally applicable information, but also focuses on specifics relevant to North Carolina.
SPECIALTY CROP/DIRECT MARKETING
Q: Are there marketing guides to how to sell my farm products while markets are being disrupted by COVID-19? (4/17/20)
An entity called Local Line has published a direct marketing guide on tips and strategies that you can use to sell agricultural products direct to the consumer. This resource is available here. The NALC has also drafted several state-specific direct marketing guides that cover an array of legal topics relevant during the COVID-19 outbreak available here.
Q: Are there any changes to my PACA protections and obligations as a result of the pandemic? (4/17/20)
Yes. USDA has put out a series of FAQs relating to how PACA may be able to help producers during the COVID-19 emergency. USDA also includes information on how to contact the PACA Division and the PACA Customer Service line during the emergency. Click here to read those FAQs.
Q: I want to explore having my livestock slaughtered at a state-level facility and sell directly to customers. How do I find out if this is legal to do? (updated 6/25/20)
Some states have laws that allow state meat inspection for the sale of meat but only within that same state. States’ laws vary widely in this regard. The National Agricultural Law Center has compiled at 50-state survey of states’ meat inspection laws, which is available here. Additionally, the National Agricultural Law Center provided a comprehensive webinar on June 3 titled, Slaughter and Processing in the United States: Oversight and Requirements. A recording of the webinar is available here.
DEFENSE PRODUCTION ACT EXECUTIVE ORDER
Q: Where can find a copy of the Executive Order issued by former President Trump that relates to food processing companies? (1/28/21)
On the evening of April 28, 2020, former President Trump issued an Executive Order titled, Delegating Authority Under the Defense Production Act With Respect to Food Supply Chain Resources During the National Emergency Caused by the Outbreak of COVID-19. That Executive Order is available here. The USDA Press Release is available here.
Q: What resources are available in case of mental health and stress issues? (08/13/20)
The National Agricultural Law Center compiled a list of resources specifically tailored to help farmers and ranchers in times of stress and adverse mental health titled Farm Stress & Mental Health: Where Can You Turn? The publication is designed to connect individuals and families with state-specific mental health resources and contracts that are aimed towards farming and rural communities, but can be used by the general public. Further, a list of mental health and stress resources can be found at this additional link. Please note: if you or someone you know is in a life-threatening situation, please call 911 immediately.
Because of the unprecedented situation created by COVID-19, stress and mental health are important factors to monitor. Agriculture is already a challenging industry to be involved in, and including a pandemic only increases the existing trials. The American Farm Bureau Federation’s Farm State of Mind link includes guidance on how to recognize signs of high stress, as well resources and hotlines to call. Additionally, the Centers for Disease Control and Prevention created helpful documents for advice on coping with stress and improving mental health, available here. As always, individuals with preexisting conditions should continue their prescribed treatment plans. Further information can be found at the Substance Abuse and Mental Health Services Administration website.
Q: Where can I learn more about the COVID-19 vaccines? (1/29/21)
The CDC is a great resource for information on the COVID-19 vaccine. CDC provides facts about the vaccination, as well as answers to the most commonly asked questions about the vaccine. These resources are regularly updated, so it is a good practice to check the CDC website on a recurring basis for any new developments.
The Cooperative Extension Service of the University of Arkansas Division of Agriculture also provides important information on the COVID-19 vaccines. This resource is available on its website here.
Q: What other agriculture-related resources are available outside of the above-mentioned guidelines and publications?
The Farmers’ Legal Action Group, Inc. (FLAG) has created an extremely helpful publication that is dedicated to providing information—but not legal advice—surrounding various complex issues related to COVID-19 and the impact on agriculture. The entire publication can be found here.