April 21, 2020

USDA Announces COVID-19 Relief Program

Last Friday, USDA announced the Coronavirus Food Assistance Program (CFAP), a new $19 billion relief program designed to support farmers, ranchers and consumers impacted by the COVID-19 pandemic.

CFAP consists of two main components:

  1. Direct Support to Farmers and Ranchers

The program will provide $16 billion in direct support based on actual losses for agricultural producers. Of this $16 billion, $2.1 billion will be allocated to specialty crop producers.

Producers will receive a single payment determined using two calculations: 

  • Price losses that occurred January 1, 2020 through April 15, 2020. Producers will be compensated for 85% of price loss during that period. 
  • The second part of the payment will be expected losses from April 15, 2020, through the next two quarters, and will cover 30% of expected losses.

Payments will be limited to entities with an AGI of $900,00 or less, unless 75% of an entity’s income comes from farming operations. Additionally, the payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity. Qualified commodities must have experienced a 5% price decrease between January and April. 

2. USDA Purchase and Distribution

USDA will partner with regional and local distributors to purchase $3 billion in fresh produce, dairy, and meat. USDA will begin with the procurement of an estimated $100 million per month in fresh fruits and vegetables for the next six months, with the ability to increase the amount purchased as necessary.  

The distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy, and meat products to food banks, community and faith-based organizations, and other non-profits serving Americans in need.

In response to the USDA relief plan, Western Growers President and CEO, Dave Puglia, issued the following statement:

“Farmers who provide our fresh fruits, vegetables and tree nuts have suffered massive economic damage, triggered by the nearly complete shutdown of the food service sector. This crisis threatens to put thousands of farmers and associated companies out of business. The relief package announced today by President Trump and Secretary Perdue provides a very limited and conditioned first injection of $2.7 billion in financial assistance for the fresh produce industry until the economy regains its footing. Clearly, far more will be needed with more reasonable limits.”

According to USDA, further details regarding eligibility, rates, and other implementation will be released at a later date.

For additional information, please contact Dennis Nuxoll at [email protected].