Recently, the U.S. Department of Agriculture (“USDA”) announced it is implementing a program for livestock and poultry producers who suffered unexpected financial losses due to the limited access to processing facilities caused by the coronavirus pandemic. This program, known as the Pandemic Livestock Indemnity Program (“PLIP”), is administered by USDA’s Farm Service Agency (“FSA”) to provide financial assistance to certain eligible agricultural producers who depopulated their livestock or poultry during the pandemic. PLIP is part of the USDA-led Pandemic Assistance for Producers initiative and FSA is accepting applications for the program through September 17, 2021.
In December 2020, Congress passed the Consolidated Appropriations Act (“CAA”), which included a $900 billion stimulus relief package. Of the $900 billion in stimulus relief, $13 billion was allocated to the agricultural sector. Out of this $13 billion, almost $11.2 billion is assigned to the USDA to fund agricultural programs. The agricultural provisions of the stimulus package contain specific instructions on how the USDA is to spend the relief funds. Accordingly, under those provisions, the entire $11.2 billion given to the USDA will be used to provide financial assistance to agricultural producers across the nation.
On March 24, 2021, the USDA introduced a new four-part USDA initiative known as Pandemic Assistance for Producers. The agency dedicated over $12 billion to the initiative to extend financial assistance directly to producers. Specifically, the USDA designed the Pandemic Assistance for Producers initiative to provide aid and support to a broader set of producers than earlier pandemic-related assistance programs. Essentially, the initiative is being used to support new USDA-led programs, modify existing programs, and facilitate USDA’s spending of the of CAA funds in accordance with Congress’ instructions.
One of the provisions under the CAA directed the USDA to provide financial assistance to producers who depopulated their livestock or poultry due to the market impacts caused by the COVID-19 pandemic. Unlike some agricultural provisions under the CAA, Congress did not indicate how much of the $11.2 billion USDA must make available to this group of livestock and poultry producers. Accordingly, the USDA decided to establish a new program as part of the Pandemic Assistance for Producers initiative to satisfy this provision under the CAA. On July 13, 2021, the USDA established PLIP to distribute financial aid to the farmers and ranchers who suffered losses from depopulating livestock and poultry.
Many swine, chicken, and turkey producers suffered losses from depopulating livestock and poultry as a result of limited access to processing facilities because of pandemic-related disruptions. Thus, the USDA established PLIP to help these producers recover some of their financial losses and costs. Specifically, FSA will provide direct payments to certain producers of eligible swine, chickens, and turkeys that were depopulated from March 1, 2020 through December 26, 2020. FSA is currently accepting applications for producers who qualify to receive PLIP assistance, and will continue accepting applications through September 17, 2021.
Although PLIP offers assistance to producers of swine, chicken, and turkey, there are certain eligibility requirements these producers must satisfy. First, only producers who depopulate their herds or flocks due to the lack of processing access resulting from the pandemic are eligible for. Because of this, only livestock and poultry depopulated from March 1, 2020 through December 26, 2020 qualify for financial assistance. Second, a producer’s livestock and poultry must have been physically located in the U.S. or one of its territories at the time of depopulation.
Additionally, producers are only eligible for payments if they had legal ownership of the livestock or poultry at the time of depopulation. This means contract growers, packers, and live poultry dealers are not eligible. Finally, producers must have an average adjusted gross income (“AGI”) under $900,000 for the 2016, 2017, and 2018 tax years to qualify for assistance. In situations that involve eligible producers in a joint venture or general partnership, this AGI provision will apply to the individual producer-members.
A complete list of eligibility requirements can be found on the USDA website here.
Producers who satisfy the eligibility requirements will be able to apply for financial assistance under PLIP and receive financial relief for the losses and costs associated with depopulating their livestock and poultry. Under the program, eligible producers receive payments for 80 percent of both the loss of eligible livestock or poultry, and for the cost of depopulating and disposing of the animals based on a single payment rate per head. USDA has designed a table, available here, that outlines the payment rates per head for each category of eligible livestock and poultry.
In calculating eligible producers’ PLIP payment, FSA also subtracts certain previous assistance producers have received. Eligible producers who received previous aid under a state program or USDA’s Environmental Quality Incentives Program (“EQIP”) for disposing their depopulated animals will have those payment amounts subtracted from their final PLIP payment. Also, FSA will reduce an eligible producer’s PLIP payment by any amount received under CFAP 1 and CFAP 2 that were paid on the same inventory of swine that a producer depopulated. The example below explains how FSA calculates PLIP payments.
Suppose Sophie, a swine producer, had to depopulate 500 head of swine between the dates of March 1, 2020 through December 26, 2020 because of the limited access to processing facilities caused by the coronavirus pandemic. Each of these swine weighed between 251-450 pounds at the time of depopulation. Previously, Sophie received $25,000 from the USDA under EQIP for disposing her depopulated swine. However, this aid did not fully compensate for her loss. Accordingly, Sophie satisfied each eligibility requirement under PLIP and applied to receive financial assistance under the program.
Based on the USDA’s PLIP payment rate table, which accounts for the 80 percent factor, Sophie will receive $158.88 for each hog because every hog weighed between 251-450 pounds at the time of depopulation. So, $158.88 multiplied by 500 equals $79,440. However, Sophie previously received aid under EQIP, so FSA will subtract the $25,000 she collected under that program. Therefore, after subtracting her EQIP assistance from the payment rate amount, her expected PLIP payment will be $54,440.
Importantly, there is no cap on the amount of PLIP payments that a producer can receive. So long as a producer satisfies the eligibility requirements, they can expect financial assistance for all of the eligible livestock and poultry they depopulated within the specified time period.
To apply for financial assistance under the program, eligible producers must complete and submit various forms to any FSA county office by September 17, 2021. An eligible producer’s PLIP application must include:
- FSA-620, Pandemic Livestock Indemnity Program application
- AD-2047, Customer Data Worksheet (for new customers or existing customers who need to update their profile)
- CCC-902, Farm Operating Plan
- CCC-901, Member Information for Legal Entities (if the applicant is an entity)
- AD-1026, Highly Erodible Land Conservation and Wetland Conservation Certification
- CCC-941, Average AGI Certification and Consent to Disclosure of Tax Information
Additionally, a producer may have to provide supporting documents FSA requests in order to verify the producer-applicant’s ownership of the livestock or poultry they claimed in their application. FSA encourages producers to contact their local USDA Service Center with any questions about eligibility or the application process under PLIP.
For over a year, the COVID-19 pandemic has affected the entire agricultural industry, and many farmers and ranchers continue to suffer adverse impacts from market disruptions linked to the pandemic. Specifically, some producers had to depopulate their livestock and poultry due to the limited access to processing during the pandemic, which resulted in unexpected losses. Accordingly, the USDA established PLIP to provide direct financial assistance to certain swine, chicken, and poultry producers for the losses and costs associated with depopulating their livestock and poultry. Producers who satisfy the eligibility requirements are encouraged to apply for PLIP payments, and FSA will accept applications for program assistance through September 17, 2021.
To view USDA’s press release announcing PLIP, click here.
To view FSA’s Notice of Funds Availability for PLIP, click here.
For updates on the PLIP program, click here.
To read more about the Consolidated Appropriations Act, click here.
To read more about USDA’s Pandemic Assistance for Producers initiative, click here.