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COVID Food Assistance Program (CFAP)
Many of you have been asking when the federal government was going to offer stimulus money to the agricultural sector. Late last Friday, the USDA announced that it has $19B to assist ag producers. $3B will be used for the direct purchase of commodities and $16B will be used for direct payments to producers. We know this money will be broken down as follows:
$9.6B for the livestock industry
$3.9B for Row Crops
$2.1B for Specialty Crops
$500M for Other Crops
A producer will need to calculate their total price losses, first from 1/1/20 through 4/15/20 and second from 4/16/20 projected through the end of the year. The first calculation will qualify for an 85% reimbursement of losses and the second will qualify for a 30% reimbursement. There is a ceiling on total reimbursements. A grower may file for reimbursement for $125K per commodity on a total of two commodities ($250K).
As is the case with USDA programs, the legal entity type you operate under will determine whether the ceiling is placed at the entity level or the individual owner level.
We placed a call to our local FSA office to ask about the process to apply for these funds. Our concern was that this program would be administered like the PPP loans- first come first served until the money runs out. The agent told us he doesn’t believe this will be the case, but thought it will be a couple of weeks before we have additional details.
We will keep an eye on this. If you have questions about this, PPP, EIDL, or other economic stimulus initiatives, please visit our website or call a Cooper Norman representative.