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Donald J. Trump and Sonny Perdue Announced CFAP2 on September 17
2020-09-22

The unexpected coronavirus pandemic has taken millions of unfortunate lives away and brought devastating influences on all walks of lives. Currently farmers and small-sized agricultural entities are experiencing a tough situation with dropping market price, unsalable goods and increasing inventory costs. In order to relieve and support the producers and minimize the disastrous impacts, the government announced the initial Coronavirus Food Assistance Program on April 17.

CFAP1

The application period of the initial CFAP lasts from May 26 to September 11. According to United States Department of Agriculture (USDA), to be eligible for payments, a person or legal entity must have an average adjusted gross income of less than $900,000 for tax years 2016, 2017, and 2018. However, if 75 percent of their adjusted gross income comes from farming, ranching, or forestry, the AGI limit of $900,000 does not apply. The producers should suffer a five percent-or-greater price decline over a specified time as a result of the COVID-19 pandemic, and face increased marketing costs for inventories. With the two later added commodities announced on July 9 and August 11, eligible commodities for CFAP include non-specialty crops, wool, livestock, dairy, specialty crops, nursery crops and cut flowers, aquaculture and eggs. Eligible producers can either apply online though the USDA website or fill out the application form manually and then submit it to the local USDA service center.

CFAP payments are subject to a per person and legal entity payment limitation of $250,000. This limitation applies to the total amount of CFAP payments made with respect to all eligible commodities. For corporate entities, however, the payment limit will increase according to the number of shareholders contributing to the substantial labor or management with respect to the operation of the corporate entity. For example, the payment limit is $500,000 for an entity with two qualified shareholders, $750,000 for an entity with three qualified shareholders. In order to ensure availability of funding, producers with approved applications initially received 80 percent of their payments. Beginning the week of August 17, FSA will automatically issue the remaining 20 percent of the calculated payment to eligible producers.

CFAP2

Following the basic principles of the initial CFAP, President Donald J. Trump and U.S. Secretary of Agriculture Sonny Perdue announced Coronavirus Food Assistance Program 2 (CFAP2) on September 17, 2020, which broadens the assistance scope. The application period stretches from September 21 to December 11, 2020. According to USDA, eligible commodities for CFAP2 include row crops, wool, livestock, specialty livestock, dairy, specialty crops, floriculture and nursery crops, aquaculture, broilers and eggs, and tobacco. There are several requirements for producers who apply for CFAP2. Firstly, the producers must be in the business of farming when applying. What is more, producers can apply for assistance for only commercially produced commodities. The payment limitation is the same as that of CFAP1, which is $250,000. However, it is separate from CFAP1, meaning it only applies to the CFAP2 payment.