Applications for payments under the CFAP 1 program closed on Sept. 11, and the USDA had paid out more than $10 billion in direct payments to ag producers as of early October. However, alfalfa producers were on the outside looking in.
“When alfalfa, the nation's third most valuable field crop, was not included in the first round of CFAP, we worked with the House ag committee chair, Rep. Collin Peterson, and other congressional offices to get alfalfa included in CFAP 2,” said Beth Nelson, president of the National Alfalfa and Forage Alliance (NAFA).
To assist alfalfa producers with the CFAP 2 application process, NAFA hosted a webinar, Oct. 15, featuring several representatives of the Minnesota Farm Service Agency (FSA) office. The webinar has been archived is available to view online.
General program details
As with CFAP 1, the program is designed to provide assistance to producers suffering financial losses due to ongoing market disruptions and associated marketing costs related to the COVID-19 pandemic. Total funding for CFAP 2 is $14 billion, with funds coming from the Commodity Credit Corporation (CCC) Charter Act and the Coronavirus Aid, Relief and Economic Security (CARES) Act.
The sign-up period for CFAP 2 is open until Dec. 11, 2020, at USDA FSA county offices. CFAP 2 is considered a separate program and requires a separate sign-up, even if the producer signed up for other crops or commodities and received payment under CFAP 1. Producers who did not sign up for CFAP 1 are also eligible to sign up for CFAP 2.
Payment categories
CFAP 2 payments are made for three general categories of commodities:
- Price trigger commodities – Price trigger commodities are major commodities that meet a minimum 5% price decline over a specified period of time. Most major field crops are included in this category, with payments on a per-acre basis.
- Flat-rate crops – This group includes crops that either do not meet the 5% price decline trigger or do not have data available to calculate a price change. Payments are on a per-acre basis. Alfalfa is included in this group.
- Sales commodities – Sales commodities include specialty crops, aquaculture, nursery crops and floriculture – other commodities not included in the price trigger and flat-rate categories.
Alfalfa details
To apply for payment under CFAP 2, alfalfa producers must first certify 2020 crop acreage with the county FSA office. Producers will not be able to submit a CFAP 2 application with self-entered acreage.
Then, when they apply for CFAP 2 payments, an automated application will interface with FSA software to determine acres eligible for payment. Acreage reports used for CFAP 2 payments are not subject to a late filing fee.
Unlike some other crops, alfalfa producers will not need to reference their sales, inventory and other records. Since alfalfa is classified as a flat-rate crop, producers do not have to provide specifics on yield or prices received for alfalfa sold.
It’s important to note that these payments are limited to alfalfa grown for hay or seed. Alfalfa/grass mixtures are also eligible for payment, so long as the percentage of alfalfa is 60% or greater. Other hay, mixed fields, cover crops and acres that did not get planted are not eligible.
As a flat-rate crop, payments for alfalfa are equal to $15 per acre, and producers will receive 100% of the payment electronically through direct deposit once the application has been approved.
Fields will be subject to a spot check by a county field adjuster or the county executive director. Producers have 60 days from signing an application to resolve any issues with their application. Even though they are self-certifying, any acreage documentation should be kept for up to three years.
Depending on how the crop acreage is certified with FSA may determine payment eligibility. For example, an old alfalfa stand may be eligible for payments if it still meets a minimum 60% (nine plants per square foot). Any fields in excess of 5 years old are likely suspect and may be subject to a spot check to verify the health of the stand.
For other general information, contact your county FSA office or visit the USDA CFAP webpage.
Payment limitations separate
Payment limitations apply. However, since CFAP 2 is a separate program, payments made under CFAP 1 do not count toward CFAP 2 payment limits.
The total CFAP 2 payment that a person or legal entity may receive, directly through their application or indirectly through attribution of entity payments, is $250,000, except if:
- Two different members of the legal entity each provide at least 400 hours of active personal labor, active personal management or combination thereof with respect to the production of 2020 commodities, then an entity may receive up to $500,000.
- Three different members of the legal entity each provide at least 400 hours of active personal labor, active personal management or combination thereof with respect to the production of 2020 commodities, then an entity may receive up to $750,000.
Although the payment limitation is increased for corporations, limited liability companies, limited partnerships, trusts or estates, each member’s payment limitation (received directly or indirectly) remains subject to the $250,000 individual person payment limit.
Significantly, this round’s payment limitation provision has been expanded to include trusts and estates.
Producers will also have to certify they meet the USDA’s adjusted gross income (AGI) limitation of $900,000, unless at least 75% 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.
Application information
Multiple application options are available.
Documentation to support the producer’s application and certification may be requested. All other eligibility forms, such as those related to adjusted gross income and payment information, can be downloaded. For existing FSA customers, including those who participated in CFAP 1, many documents are likely already on file. Producers should check with the FSA county office to see if any of the forms need to be updated.
More information available
Additional information can be found on the CFAP 2 webpage. There is a separate link for frequently asked questions.
Customers seeking one-on-one support with the CFAP 2 application process can call (877) 508-8364 to speak directly with a USDA employee.
Due to the COVID-19 pandemic, USDA FSA service centers are open for business by phone appointment only, and fieldwork will continue with appropriate social distancing. While program delivery staff will continue to come into the office, they will be working with producers by phone and using online tools whenever possible.
-
Dave Natzke
- Editor
- Progressive Forage
- Email Dave Natzke
