NMPF urges participation in new coronavirus assistance program

By Jim Cornall

- Last updated on GMT

NMPF’s coronavirus resources page includes a special section on the CFAP.  Pic: Getty Images/Maksymowicz
NMPF’s coronavirus resources page includes a special section on the CFAP. Pic: Getty Images/Maksymowicz

Related tags nmpf coronavirus COVID-19 Usda Fsa Dairy

US farmers can now sign up for the Coronavirus Food Assistance Program (CFAP), the direct payments for producers funded by Congress and implemented by the USDA.

The National Milk Producers Federation (NMPF) said it is urging all dairy farmers to use the program, which will provide aid in upcoming weeks and months.

Dairy farmers must contact their local USDA Farm Service Agency (FSA) office to enroll in the CFAP​.

“The sooner a farmer signs up, the sooner this welcome assistance will arrive,”​ said Jim Mulhern, president and CEO of the National Milk Producers Federation.

“NMPF is ready to help dairy producers, answering questions and offering materials online even as we continue working with USDA and members of Congress to smooth out details and discuss additional aid.”

NMPF’s coronavirus resources page​ includes a special section on CFAP.

The CFAP provides support to producers who have suffered a 5%-or-greater price decline due to COVID-19.

For dairy, a single payment will be made derived from two funding formulas intended to calculate losses caused by the coronavirus in 2020.  The first and larger component is calculated from a producer’s certification of milk production for the first quarter of calendar year 2020 multiplied by $4.71 per hundredweight. The second component of the payment is based on a 1.4% increase in that first quarter production, multiplied by $1.47 per hundredweight. Overall, the payment amounts to $6.20/cwt. for a farm’s production in January through March of this year.

USDA will make an initial payment of 80% of an eligible participant’s benefit. By issuing initial payments, FSA said it can quickly provide assistance to eligible participants while ensuring that overall CFAP payments do not exceed the $16bn funding limit. The remaining portion of a farmer’s payment will be paid at a later date as funds remain available.

All dairy operations with milk production in January, February, and/or March 2020 are eligible for CFAP payments. Any dumped milk production during those months is also eligible for assistance. Milk production enrolled in risk management programs, such as Livestock Gross Margin (LGM), Dairy Revenue Protection (DRP), Dairy Margin Coverage (DMC) or forward contracts, also qualifies for CFAP payments.

Producers must complete all CFAP application forms and provide required documentation. Applications will be accepted through August 28, 2020.

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.

Corporate entities (including limited liability companies and limited partnerships) may receive up to $750,000 based upon the number of shareholders (not to exceed three shareholders) who are contributing substantial labor or management with respect to the operation of the corporate entity.

A person or legal entity, other than a joint venture or general partnership, is ineligible for payments if the person’s or legal entity’s average adjusted gross income (AGI), using the average of the adjusted gross incomes for the 2016, 2017 and 2018 tax years, is more than $900,000, unless at least 75% of that person’s or legal entity’s average AGI is derived from farming, ranching, or forestry-related activities. With respect to joint ventures and general partnerships, this AGI provision will be applied to each member of the joint venture and general partnership.

Participation in the Small Business Administration’s Paycheck Protection Program (PPP) or Economic Injury Disaster Loan (EIDL) program does not impact producer eligibility for CFAP or for any USDA farm program. The PPP duplicate benefit provision does not have an impact on FSA farm programs or farm loan programs, the NMPF said.

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