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. In response to the economic crisis COVID-19 created, Congress passed stimulus relief bills such as the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the Consolidated Appropriations Act (“CAA”), and most recently, the American Rescue Plan Act (“ARPA”). Each of these bills allocated billions to the U.S. Department of Agriculture (“USDA”) to aid producers who suffer financial losses due to the pandemic. However, not every producer who suffered an income reduction was eligible to receive aid through the COVID-related programs.
The assistance offered by USDA through the previous spending measures relieved many producers from financial stress, but some producers did not qualify for this assistance. In general, certain producers did not receive aid because the stimulus relief bills did not extend assistance eligibility to some commodities. Meanwhile, much of the financial assistance offered under USDA’s coronavirus programs were primarily given to farmers and ranchers who produce major commodities.
When the current administration took office, it directed USDA to examine the previous agricultural COVID-19 assistance programs. Upon completing this review, USDA concluded the previous programs distributed aid in an inequitable way between U.S. producer groups, and some programs lacked sufficient outreach among certain producer populations. Thus, in order to balance the distribution of COVID-related assistance and offer further support to a large portion of producers, USDA formed a new initiative.
USDA Pandemic Assistance for Producers
On March 24, U.S. Secretary of Agriculture Tom Vilsack introduced a new USDA initiative known as Pandemic Assistance for Producers. USDA is dedicating over $12 billion into the Pandemic Assistance for Producers initiative to extend financial assistance to many agricultural producers across the nation. Specifically, USDA designed Pandemic Assistance for Producers to provide aid and support to a broader set of producers than earlier pandemic-related assistance programs.
The Pandemic Assistance for Producers initiative is broken down into four separate parts, each part offering assistance and support to different producer groups. Overall, the $12.1 billion assigned to the initiative is spread among Pandemic Assistance for Producer’s four different parts to establish new producer assistance programs, fund existing USDA-led programs, create additional opportunities for financial aid, and improve outreach to socially disadvantaged producers.
Part One: Expanding Producer Assistance
Under the first part of the four-part initiative, USDA is allocating $6 billion to develop new pandemic-related aid programs that offer financial support to a broader set of producers. In general, Part One of Pandemic Assistance for Producers is geared towards providing financial assistance to producers who suffered economic loss during the pandemic, but received little or no assistance from earlier aid programs. Specifically, USDA is interested in extending aid to small and medium farming operations, socially disadvantaged producers, and producers of less traditional crops.
The funds made available to this part of Pandemic Assistance for Producers will bring assistance to several areas in the agricultural industry and many different producers, which can be viewed here. A few groups eligible to receive assistances under Part One includes:
- Specialty crop producers
- Beginning farmers
- Organic producers
- Biofuel producers
- Timber harvesters
- Dairy farmers
The funding to support this part of the initiative comes from discretionary funding given to USDA under the CAA, and other pandemic-related funding the previous administration did not spend. The USDA will likely need to issue regulations to implement the new program before this assistance becomes available to those who qualify. According to USDA, assistance under this program will become available sometime this spring.
Part Two: Funding for Existing Programs
Along with establishing new programs, existing USDA programs fall under the Pandemic Assistance for Producers initiative. Under Part Two, USDA is investing $500 million of initiative’s $12.1 billion in several of the agency’s existing programs. USDA expects to provide most of this assistance through already existing programs by the end of April. The programs receiving this new funding include the Specialty Crop Block Grant Program, the Farmers Opportunities Training and Outreach program, the Local Agricultural Marketing Program, the Gus Schumacher Nutrition Incentive Program, the Animal and Plant Health Inspection Service, the Agricultural Research Service, NIFA, and the Economic Adjustment Assistance for Textile Mills program.
Part Three: CFAP Payments
Under the CARES Act, the first major stimulus relief bill, Congress directed USDA to implement an assistance program for producers. Shortly after the bill was enacted, USDA announced it would provide aid to producers under a program called the Coronavirus Food Assistance Program (“CFAP”). In 2020, USDA conducted two rounds of CFAP, known as CFAP-1 and CFAP-2, which provides direct financial assistance to farmers and ranchers of eligible agricultural commodities who suffered unexpected financial losses due to the coronavirus pandemic.
The CAA, which was enacted in December 2020, allocated an additional $11.2 billion to USDA. Like the CARES Act, the provisions allocating these funds contain detailed instructions on how the agency is to spend the relief funds, and who is eligible to receive the funds. Specifically, the bill directs USDA to provide direct financial assistance to producers of specific commodities. Accordingly, a portion of this money is funding Part One of Pandemic Assistance for Producers, while the remaining funds are providing additional CFAP payments to cattle and certain row crop producers under this part of the initiative.
Cattle producers are one group included within the CAA who will receive additional assistance. Thus, a portion of Part Three increases CFAP-1 payment rates for cattle producers. Currently, USDA is automatically sending eligible producers these additional direct payments based on their previous CFAP-1 application, so producers do not need to submit a new application to receive this payment. In other words, cattle producers with a previously approved CFAP-1 application will receive an additional assistance at an updated rate. The updated payment rates for cattle can be found here.
Certain row crop producers will also see additional direct payments under this part of the initiative. As stimulated under the CAA, producers of flat-rate or price-trigger crops with a previously approved CFAP-2 application will automatically receive additional assistance of $20 per eligible acre. Price trigger commodities are major commodities, such as corn, soybeans, and barley, that suffered at least a five-percent price decline for a certain period. Flat-rate commodities are crops—like alfalfa, flax, or millet—that either did not suffer the five-percent price decline, or that have no data available to calculate the price decline. Like cattle producers, USDA does not require eligible row crop producers to submit a new application to receive this additional aid. A list of all eligible row crops can be viewed here.
Lastly under Part Three of Pandemic Assistance for Producers, USDA is processing payments for certain producers who submitted applications under the CFAP Additional Assistance program. In January 2021, before the administration change, USDA announced a plan to use the remaining funds from CFAP-1 and CFAP-2—approximately $2.3 billion—to fund another round of payments called CFAP Additional Assistance (also known as “CFAP-2.1” or “CFAP-AA”). CFAP-AA is designed to provide direct payments to certain producers who were not previously eligible under earlier CFAP payments, and also update payment calculations for some producers who already applied for an earlier payment. To implement CFAP-AA, USDA published a final rule containing eligibility requirements and new formulas to calculate higher payment rates for qualified commodities.
Although the Biden administration placed a regulatory freeze on the additional round of payments shortly after taking office, USDA now has permission to administer CFAP-AA under the initiative, but with a few adjustments to formula calculations and eligibility requirements the Trump administration had in place. One adjustment USDA made is the payment formula for some row crop producers. Eligible row crop producer applicants with a non-Actual Production History (“APH”) insurance policy can now use 100% of the 2019 Agricultural Risk Coverage-County Option (“ARC-CO”) benchmark yield in the calculation. Also, for specialty crop producers, USDA modified the payment formula to allow these producers to now include insurance indemnities, Noninsured Crop Disaster Assistance Program payments, and Wildfire and Hurricane Indemnity Program Plus payments in their 2019 sales.
When initially launched, CFAP-AA extended eligibility to several different producer groups. A few of these include contract livestock producers, pullet producers, turfgrass sod producers, and swine producers. While USDA is sending additional assistance to some producers initially eligible for CFAP-AA, the agency is modifying some of the eligibility requirements for this assistance under the Pandemic Assistance for Producers initiative.
In general, USDA is currently processing payments for pullet and turfgrass sod producers who previously applied for CFAP-AA. However, CFAP-AA payments for swine producers and contract growers of livestock are currently on hold. It is not clear at this time whether these producers will receive direct payments under the program, and producers can expect USDA to publish new regulations to implement eligibility modifications. Meanwhile, USDA is still accepting CFAP-AA applications from swine producers and contract growers who are interested in possibly receiving additional financial assistance in the future.
Part Four: Reopening CFAP-2 Applications & Outreach
The final part of Pandemic Assistance for Producers involves two separate objectives. First, USDA reopened the CFAP-2 application portal on April 5, 2021. This means eligible producers who suffered losses due to market disruptions linked to the pandemic can submit or modify an application to receive financial assistance. Producers who previously did not apply for CFAP-2 must submit a new application, and producers who did apply for previous aid may modify their existing application. Because the CFAP-AA program uses the CFAP-2 application, swine producers and contract growers interested in applying for possible assistance must submit a CFAP-2 application. While no official deadline has been set, USDA will keep the application portal open for at least 60 days.
The second objective of Part Four involves USDA committing $2.5 million to improve outreach for CFAP-2. After USDA completed its interagency review of previous pandemic-related programs, it discovered a lack of outreach to certain producer populations, primarily socially disadvantaged communities. Accordingly, the agency is using the initiative to promote the CFAP-2 program. With the $2.5 million, USDA is partnering with organizations that have connections to socially disadvantaged communities to ensure these communities are aware and informed of the CFAP-2 program and the application process.
Under USDA’s $12.1 billion Pandemic Assistance for Producers initiative, many U.S. producers will receive financial assistance to support their agricultural operations from pandemic-related losses. Pandemic Assistance for Producers is providing aid to a broader set of producers, including producers running small farming operations, socially disadvantaged producers, and producers of less traditional crops. Although USDA is processing payments to certain producers under some portions of the initiative, the agency will need to develop regulations for the new assistance programs contained under the initiative. Once available, USDA will publish these regulations on the Federal Register website.
To view USDA’s Pandemic Assistance for Producers website, click here.
To view USDA’s Coronavirus Food Assistance Program website, click here.
To access the CFAP-2 application and further information on applying, click here.
For updates on USDA’s assistance for farmers, click here.
To read USDA’s latest COVID-19 news updates, click here.
To read more about the Consolidated Appropriations Act, click here.
To read more about the CFAP-AA program, click here.
For more National Agricultural Law Center resources on agriculture and COVID-19, click here.