President Donald J. Trump announced details of the Coronavirus Food Assistance Program (CFAP) during a meeting at the White House on May 19. It will provide up to $16 billion in direct payments from the United States Department of Agriculture (USDA) to American farmers and ranchers impacted by the novel coronavirus pandemic. The assistance is limited to $250,000 per person or entity.
“America’s farming community is facing an unprecedented situation as our nation tackles the coronavirus,” said US Secretary of Agriculture Sonny Perdue. “President Trump has authorized USDA to ensure our patriotic farmers, ranchers, and producers are supported and we are moving quickly to open applications to get payments out the door and into the pockets of farmers. These payments will help keep farmers afloat while market demand returns as our nation reopens and recovers. America’s farmers are resilient and will get through this challenge just like they always do with faith, hard work, and determination.”
NPC Calls on Congress to Fill Gap
“Given the scope of this crisis, we knew the initial funding would be insufficient to meet the need of family farms. Based upon the limited resources announced under this direct payment program, the potato industry is strongly urging Congress to act rapidly to provide more resources and flexibility to fill this huge gap and maintain producers’ livelihoods,” said Kam Quarles, chief executive officer of the Washington, DC-headquartered National Potato Council (NPC).
The potato industry has advocated for two distinct programs to provide relief to family farms impacted by this crisis. First, it has asked the USDA to step in to buy significant amounts of oversupplied potatoes and potato products. Without these purchases, family farms will be impacted into the fall of 2021. Second, the industry has called for providing meaningful direct payment relief to growers who cannot fully benefit from surplus commodity purchases.
“Over the past two months, the US potato industry has urged USDA to move quickly to help clear product out of the supply chain and support family farmers with direct support,” said National Potato Council President Britt Raybould. “With 60 percent of all potatoes grown in the United States destined for foodservice customers, the nationwide closure of restaurants, bars, schools, and entertainment venues dried up the potato supply chain. The resulting oversupply of 1.5 billion pounds of potatoes could fill the US Capitol 14 times over.”
Frozen french fries and specialty products account for approximately 60% of potato crop utilization in the United States. As for potato exports, frozen french fries represent 65% of volume, according to the Foreign Trade Division of the US Department of Commerce.
For specialty crop producers, including potato growers, the total direct payments will be based on three criteria:
- The volume of production sold between January 15 and April 15, 2020
- The volume of production shipped, but unpaid
- The number of acres for which harvested production did not leave the farm or mature product destroyed or not harvested during that same time period, and which have not and will not be sold.
While the program has a payment limitation of $250,000 per person or entity for all commodities combined, applicants that are corporations, limited liability companies or limited partnerships may qualify for additional payment limits where members actively provide personal labor or personal management for the farming operation. Producers will also have to certify they meet the Adjusted Gross Income limitation of $900,000 unless at least 75 percent or more of their income is derived from farming, ranching or forestry-related activities.
Producers must also be in compliance with Highly Erodible Land and Wetland Conservation provisions. They may apply for assistance beginning on May 26 through August 28, 2020, through local Farm Service Agency offices. Additional information and application forms can be found at farmers.gov/cfap.
Producers will receive 80 percent of their maximum total payment upon approval of the application. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date as funds remain available.
The National Potato Council represents the interests of US potato growers on federal legislative, regulatory, environmental and trade issues. The value of potato production in the United States is over $3.7 billion annually and supports hundreds of thousands of jobs both directly and indirectly.