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Farm Programs
On June 15, USDA announced addi- received an additional PAP payment eartional aid to farmers and other agricul- lier this year, based on the cattle inventotural entities as part of the Pandemic ry numbers submitted for CFAP 1 eligiAssistance to Producers (PAP) program. bility in 2020. This “top-up” CFAP payIn March of 2021, USDA authorized up to ment was basically a doubling of the orig$12 billion for the PAP program as part inal 2020 CFAP 1 payments, with payof the overall $900 billion Consolidated ment rates depending on the size and Appropriations Act which was passed by type of cattle. Noticeably missing in the latest PAP program assistance announced by USDA was the additional “top-up” payment of $17 per head to hog producers who had previously applied for and received a CFAP 1 payment in 2020. Hog producers initially received a CFAP 1 payment of $17 per head, so the additional Congress late in 2020. USDA utilized the latest round of PAP program funding to especially target farmers and ranchers who did not previously qualify for aid through other coronavirus assistance programs; as well as to assist beginning, socially disadvantaged, and small-to-medium sized farm operations. FARM PROGRAMS By Kent Thiesse MARKETING
Following is a brief summary of the information payment would raise the total payment to $34 per from USDA regarding the latest round of PAP pro- head. The additional “top-up” CFAP payments to gram payments: hog producers apparently is still under review by Support for dairy farmers and dairy processors — $400 million is earmarked toward the new “Dairy Donation Program,” designed to address food insecurity and mitigate food waste and loss. Additional pandemic payments will be available to dairy proUSDA and there was no update on the status of these payments. For the latest details on many of these programs, farmers should contact their local Farm Service Agency office or refer to the following web site: https://www.farmers.gov. ducers who have demonstrated losses which were Update on 2019 WHIP+ and QLA payments not covered by previous pandemic assistance pro- USDA also recently announced the authorization grams. Also, approximately $580 million has been of more than $1 billion in additional 2019 payments set aside for “Supplemental Margin Coverage” to through the Wildfire and Hurricane Indemnity small and medium sized dairy operations. No Program (WHIP+) and for payments to producers details were released on how this will be adminis- that qualified under the Quality Loss Adjustment tered by the USDA. (QLA) program. Many farmers in southern Assistance to poultry and livestock producers left out of previous rounds of pandemic payments — Financial assistance will be made available to contract growers of poultry who were impacted by the coronavirus pandemic. (Note: In the USDA announcement, there was no mention of additional assistance to contract hog producers or contract producers of any other livestock entities.) The USDA will also provide assistance to poultry and livestock producers who were forced to euthanize animals during the pandemic from March 1, 2020, through Dec. 26, 2020. Minnesota and other areas of the upper Midwest were eligible to receive the additional WHIP+ payments, due to significant crop losses which resulted from late planting and excessive rainfall in 2019. Most eligible producers who applied had already received their 2018 Whip+ payments and the first half of eligible 2019 WHIP+ payments. The funding for the second half of the 2019 WHIP+ payments was authorized in the COVID relief bill passed by Congress in late 2020. Following are the details on the latest WHIP+ and QLA payments: Other PAP program provisions — $700 million is dedicated to biofuel producers to offset the market loss during the pandemic in 2020. $700 million will be made available for “Pandemic Response Safety Grants” which are targeted toward specialty crop growers, meat packers and processors, seafood industry workers and others for PPE equipment, supplies and other measures. An additional $200 million has been set aside for small, family-owned timber harvesting and hauling businesses. Up to $20 million is planned for additional organic costshare assistance, including for producers who are transitioning to organic production. P+ payments — Producers who were eligible for WHIP+ for the 2019 crop year and have already received 50 percent of the eligible payment are now receiving a second WHIP+ payment on 2019 crop losses. No additional WHIP+ application was necessary, and no new applications were accepted. The second payment is 40 percent of the total eligible 2019 WHIP+ payment, bringing the total 2019 WHIP+ payment to 90 percent of the eligible amount. (Example --- $10,000 total 2019 WHIP+ payment eligibility; $5,000 paid earlier; $4,000 paid now, and $1,000 remaining to be paid). The second 2019 WHIP+ payment was reduced by USDA to assure adequate funding exists to make the pay-
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Earlier this year, eligible crop producers received ments. If sufficient funds are available, a third and an additional $20 per acre PAP program payment final WHIP+ payment may occur.(so-called “CFAP 3 payments”) as part of the pandemic assistance aid authorized by Congress in 2020. The payment eligibility for crops was based on Producers with eligible 2018 crop losses already received the entire 2018 WHIP+ program payment. the same criteria which was used for the 2020 WHIP+ payments for 2020 crop losses, including CFAP 2 payments. Some cattle producers also the devastating Derecho storm in Iowa and surrounding states, was not included in the latest announcement by USDA.
Quality Loss Adjustment (QLA) payments — The QLA payments are for crop and forage producers who suffered quality losses due to the natural disasters in 2018 and 2019. The application period for the QLA program was from January 6 through April 9 of this year.
Producers who qualified for QLA assistance will receive 100 percent of the eligible payment amount. The maximum payment limit a person or legal entity may receive through the QLA program in a given year is $125,000. Persons or entities with an adjusted gross income exceeding $900,000 are not eligible for QLA benefits unless 75 percent or more of the adjusted gross income is derived from farming and ranching.
All producers receiving WHIP+ or QLA benefits are required to purchase federal crop insurance or Noninsured Crop Disaster Assistance Program cover for the next two available crop years at the 60 percent or higher coverage level. For most crops, this requirement can be met by purchasing USDA Risk Management Agency Revenue Protection insurance policies which are offered through local crop insurance agents.
For more information refer to the USDA WHIP+ website at: https://www.farmers.gov/recover/whip-plus.
PPP loan program ended
In late May, the U.S. Small Business Administration announced loan applications for the Paycheck Protection Program were being discontinued. SBA had previously announced a PPP application deadline May 31, 2020. However, all allocated PPP loan fund had been exhausted prior to the deadline.
If eligibility requirements are met, PPP loans may be forgiven by the SBA. Many first round PPP loans and some second round PPP loans have already been forgiven. The application for forgiveness of PPP loans for farmers and other small businesses is administered through the local banks and ag lenders which originally submitted the PPP loan to SBA.
More details on PPP loan applications are available on the SBA website at: www.sba.gov/.
Kent Thiesse is a government farm programs analyst and a vice president at MinnStar Bank in Lake Crystal, Minn. He may be reached at (507) 726-2137 or kent.thiesse@minnstarbank.com. v
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