Farmers can start enrolling next week for $16 billion in coronavirus relief payments, but the Agriculture Department has decided to prorate the aid to ensure there is enough money to go around.
Farmers will receive 80% of their Coronavirus Food Assistance Program payment in the initial distribution. The remaining 20% will be paid at a later date as funds remain available within the $16 billion limit for the program, according to details released by USDA on Tuesday.
The Farm Service Agency will begin enrollment May 26. Announcing the launch of the program, President Donald Trump said that farmers would start receiving payment within a week of enrolling.
USDA's final rule for the program also eases the payment limit for individual farms. CFAP payments will be capped at $250,000 per individual recipient. An initial description of the program said there would be caps of $125,000 per commodity per farmer with a total cap of $250,000 per farmer. The $125-per-commodity cap was dropped.
Commodity groups said the initial caps were too low for livestock producers as well as specialty crop growers. Agriculture Secretary Sonny Perdue subsequently said the proposed limits would be adjusted but didn't say how.
Cattle producers are expected to receive payments totaling just over $5 billion after the payment limits are considered. Dairy producers are expected to receive $2.8 billion after payment limits. Hog producers are estimated to receive $1.6 billion after a $1 billion reduction because of the payment limits.
Not accounting for the impact of the payment limit, corn payments are estimated at $2.3 billion and soybeans at $845 million, according to USDA's cost-benefit analysis.
Specialty crop growers are expected to qualify for a total of $2.4 billion after payment limits.
The payment calculations vary depending on the commodities.
For wool and row crops, including malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat, and hard red spring wheat, payments will be based on inventory subject to price risk held as of January 15. A payment will be made based on 50% of a producer’s 2019 total production or the 2019 inventory as of Jan. 15, whichever is smaller. That amount will be multiplied by the commodity’s applicable payment rates. The payment rates for corn, for example are 32 cents and 35 cents per bushel. The rates for soybeans are 45 cents and 50 cents per bushel. For cotton the rates are nine cents and 10 cents a pound.
For cattle, hogs, and lambs and yearlings, the payment will be calculated based on the producer’s number of livestock sold between Jan. 15 and April 15, multiplied by the payment rates per head, and the number of livestock the producer owned between April 16 and May 14, multiplied by the payment rate per head.
For dairy producers, there will be two parts to their payments, with the first part based on the farmer’s milk production for the first quarter of 2020, multiplied by $4.71 per hundredweight, representing the national price decline during the same quarter. The second part of the payment will be based a national adjustment to each producer’s first-quarter production, or $1.47 per hundredweight.
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For specialty crops, including almonds, beans, broccoli, sweet corn, lemons, iceberg lettuce, spinach, squash, strawberries and tomatoes, payments will be based on the amount a farm sold between Jan. 15 and April 15; the volume a farm shipped during the period but was not paid for; the number of acres that was never harvested.
Details about the payment calculations and eligibility qualifications are available at farmers.gov.
Individuals who get less than 75% of their income from farming can still receive CFAP payments as long as their adjusted gross income doesn’t exceed $900,000 a year.
Corporations with as many up to three individuals who meet USDA’s requirements for being actively engaged in farming will be eligible fro three separate payment limits.
Several farmers and farm group leaders appeared with Trump at the White House announcement. "It's not a rescue program," said Virginia farmer Robert Mills Jr. "It's going to help these farm families be able to make good wise financial decisions in the months and weeks and years ahead."
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