Your winery may qualify for smoke taint assistance from the USDA. Contact Allen Wine Group today to learn how the USDA is offsetting crop loss due to weather events.
USDA Providing Approximately $6 Billion to Commodity and Specialty Crop Producers Impacted by 2020 and 2021 Natural Disasters.
First Wave of Payments Based on Crop Insurance Data
WASHINGTON, May 16, 2022 – The U.S. Department of Agriculture (USDA) announced that commodity and specialty producers will receive much needed assistance by offsetting crop loss due to weather events. Approximately $6 billion through the Farm Service Agency’s (FSA) new Emergency Relief Program (ERP) is to offset crop yield and value losses in 2020 and 2021.
“For over two years, farmers and ranchers across the country have been hard hit by an ongoing pandemic coupled with more frequent and catastrophic natural disasters,” said Agriculture Secretary Tom Vilsack. “As the agriculture industry deals with new challenges and stressors, we at USDA look for opportunities to inject financial support back into the rural economy through direct payments to producers who bear the brunt of circumstances beyond their control. These emergency relief payments will help offset the significant crop losses due to major weather events in 2020 and 2021 and help ensure farming operations are viable this crop year, into the next growing season and beyond.”
Background of USDA Offsetting Crop Loss
On September 30, 2021, President Biden signed into law the Extending Government Funding and Delivering Emergency Assistance Act (P.L. 117-43) intending the USDA offsetting crop loss due to weather events. $10 billion in assistance will be available for qualilfying agricultural producers. Funding will support those impacted by wildfires, droughts, hurricanes, winter storms, and other eligible disasters during 2020-2021. FSA recently made payments to ranchers impacted by drought and wildfire through the first phase of the Emergency Livestock Relief Program (ELRP). Additionaly, ERP is a relief component of the Act.
The repayment calculation is based on existing Federal Crop Insurance or Noninsured Crop Disaster Assistance Program (NAP). USDA estimates that phase one ERP benefits will reach surpass 220,000 producers who received indemnities for losses covered by federal crop insurance. Along with 4,000 producers who obtained NAP coverage for 2020 and 2021 crop losses.
ERP Eligibility – Phase One
ERP covers losses to crops, trees, bushes, and vines due to a qualifying natural disaster event in calendar years 2020 and 2021. Eligible crops include all crops for which crop insurance or NAP coverage was available, except for crops intended for grazing. Qualifying natural disaster events include wildfires, hurricanes, floods, derechos, excessive heat, winter storms, freeze (including a polar vortex), smoke exposure, excessive moisture, qualifying drought, and related conditions.
For drought, ERP assistance is available if any area within the county which has been affected and was rated by the U.S. Drought Monitor as having a:
• D2 (severe drought) for eight consecutive weeks; or
• D3 (extreme drought) or higher level of drought intensity.
Lists of 2020 and 2021 drought counties eligible for ERP is available on the emergency relief website.
To streamline and simplify the delivery of ERP phase one benefits, FSA will send pre-filled application forms to producers where crop insurance and NAP data are already on file. This form includes eligibility requirements, outlines the application process and provides ERP payment calculations. Producers will receive a separate application form for each program year in which an eligible loss occurred. Receipt of a pre-filled application is not confirmation that a producer is eligible to receive an ERP phase one payment.
FSA Forms
Additionally, producers are required to have the following forms on file with FSA within 60 days of the ERP phase one deadline, announced by FSA’s Deputy Administrator for Farm Programs:
Customer Data Worksheet: Form AD-2047
Farm Operating Plan for an individual or legal entity: Form CCC-902
Member Information for Legal Entities (if applicable): Form CCC-901
Request for an Exception to the $125,000 Payment Limitation for Certain Programs (if applicable): Form FSA-510
Socially Disadvantaged, Limited Resource, Beginning and Veteran Farmer or Rancher Certification, if applicable, for the 2021 program year: Form CCC-860
A highly erodible land conservation (sometimes referred to as HELC) and wetland conservation certification (Form AD-1026 Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC) Certification) for the ERP producer and applicable affiliates.
Producers who have previously participated in FSA programs, will likely have these required forms on file. However, those who are uncertain or want to confirm the status of their forms can contact their local FSA county office.
ERP Payment Calculations – Phase One
For crops covered by crop insurance, the ERP phase one payment calculation for a crop and unit will depend on the type and level of coverage obtained by the producer. Each calculation will use an ERP factor based on the producer’s level of crop insurance or NAP coverage.
• Crop Insurance – the ERP factor is 75% to 95% depending on the level of coverage ranging from catastrophic to at least 80% coverage.
• NAP – the ERP factor is 75% to 95% depending on the level of coverage ranging from catastrophic to 65% coverage.
Full ERP payment calculation factor tables are available on the emergency relief website and in the program fact sheet.
Applying ERP factors ensures that payments to producers do not exceed available funding and that cumulative payments do not exceed 90% of losses for all producers as required by the Act.
There will be certain payment calculation considerations for area plans under crop insurance policies.
Beginning, limited resource, socially disadvantaged, veteran farmers and ranchers qualify for a 15% increase of the ERP payment percentage calculated payment for crops having insurance coverage or NAP.
To qualify for the higher payment percentage, eligible producers must have a CCC-860 on file with FSA for 2021. (CCC-860 Socially Disadvantaged, Limited Resource, Beginning and Veteran Farmer or Rancher Certification)
The ERP phase one payment is calculated based on the producer’s loss due to all eligible causes of loss in the USDA’s offsetting crop loss. Unfortunately, they cannot be separated from other eligible causes of loss.
Future Insurance Coverage Requirements
Phase One ERP recipients are statutorily required to purchase crop insurance. They may obtain NAP coverage where crop insurance is not available, for the next two available crop years. Participants must obtain crop insurance or NAP, as may be applicable:
• At a coverage level equal to or greater than 60% for insurable crops; or
• At the catastrophic level or higher for NAP crops.
Coverage requirements have been determined from the date a producer receives an ERP payment. This may vary depending on the timing and availability of crop insurance or NAP for a producer’s particular crops. Therefore, the 2026 crop year is the final year to purchase crop insurance or NAP coverage in order to qualify.
Emergency Relief – Phase Two (Crop and Livestock Producers)
Today’s announcement is only phase one of relief for commodity and specialty crop producers. Making the initial payments using existing safety net and risk management data will speed implementation. Hence, further participation is encouraged in permanent programs, such as Federal crop insurance.
Phase two will nonetheless address existing gaps and support producers who did not participate in phase one programs. Those producers who missed phase one will fortunately still have the opportunity to receive redirected funds during phase two. While still helping offset significant crop losses due to major weather events by receiving emergency relief payments.
Through proactive communication and outreach, USDA keeps producers and stakeholders informed as program details arise. More information on ERP is in the Notice of Funding Availability.
Additional Commodity Loss Assistance
The USDA funds the Milk Loss Program and the On-Farm Stored Commodity Loss Program. Coverage comes from the Extending Government Funding and Delivering Emergency Assistance Act. The Federal Register will be issuing an upcoming rule regarding usage.
More Information
Additional USDA disaster assistance information, beyond offsetting crop loss, is easily accessible via the internet. Visit farmers.gov, including the Disaster Assistance Discovery Tool, Disaster-at-a-Glance fact sheet, and Farm Loan Discovery Tool. For FSA and Natural Resources Conservation Service programs, producers should contact their local USDA Service Center. For assistance with a crop insurance claim, producers and landowners should contact their crop insurance agent.
Rural America will see historic level investments under the Biden-Harris Administration. The USDA is transforming America’s food system with a greater focus on more resilient local and regional food production. Providing fairer markets for all producers and access to safe, healthy and nutritious food in all communities. Climate smart food and forestry practices will build new markets and streams of income for farmers. Showing a commitment to equity across the Department by removing systemic barriers and building a workforce more representative of America.
To learn more, Contact Allen Wine Group.
