On Friday, April 17, 2020, USDA announced their Coronavirus Food Assistance Program (CFAP). Although many technical details have yet to be released from USDA, this is what we know so far.
There are two major goals of the CFAP: 1) Direct support to farmers and ranchers, and 2) USDA purchase and distribution of fruit, vegetables, dairy and meat.
- Direct Support to Farmers and Ranchers: The program will provide $16 billion in direct support based on actual losses for agricultural producers where prices and market supply chains have been impacted and will assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19.
- USDA Purchase and Distribution: USDA will partner with regional and local distributors, whose workforce has been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase $3 billion in fresh produce, dairy, and meat. They will begin with the procurement of an estimated $100 million per month in fresh fruits and vegetables, $100 million per month in a variety of dairy products, and $100 million per month in meat products. 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.
The USDA is expediting the rule-making process for the direct payment program and expects to begin sign-up for the new program in early May and to get payments out to producers by the end of May or early June. Farm Service Agency (FSA) expects CFAP sign-up to mirror Market Facilitation Program (MFP). Farmers registered with FSA will be applying via FSA.
We advise farmers to keep in close contact with their local FSA offices regarding important updates. For the latest FSA news, please subscribe to FSA. Lastly, farmers should save records and documents of all losses due to COVID-19 for self-certification.
Bremer Bank will continue to monitor CFAP and provide updates as more details become available.