Upland Cotton Relief Payments Included in CFAP Details
May 25, 2020 U.S. upland cotton growers will receive direct assistance through the Coronavirus Food Assistance Program (CFAP) to help offset price losses and increased marketing costs due to impacts of the pandemic.
In a May 19 announcement, U.S. Secretary of Agriculture Sonny Perdue outlined details of CFAP, which will provide up to $16 billion in relief payments to America’s farmers and ranchers. The program provides financial assistance to producers of agricultural commodities who have suffered a 5% or greater price decline due to COVID-19 and who face additional significant marketing costs due to lower demand, surplus production and disruptions to shipping patterns and the orderly marketing of commodities.
Program funding is coming from two sources – $9.5 billion from the Coronavirus Aid, Relief, and Economic Stability (CARES) Act and $6.5 billion in existing Commodity Credit Corporation (CCC) funds for CFAP.
According to the CFAP details, eligible upland cotton producers will receive a payment of 9.5 cents per pound paid on the lesser of 50% of a grower’s 2019 total production or the 2019 unpriced inventory as of January 15, 2020. Producers will initially receive 80% of the expected total payment, with the remaining 20% to be dispersed at a later date, subject to funding availability.
Unpriced inventory is defined as production that is not subject to an agreed-upon price in the future through a forward contract, agreement or similar binding document. Producers who sold or forward contracted all their 2019 upland crop prior to January 15, 2020 are not eligible for a CFAP payment.
Applications for assistance can be made from May 26 through August 28, 2020 through a producer’s local FSA office. Upland cotton producers must provide information on their total 2019 production and total 2019 production unsold as of January 15, 2020.
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 They must also be in compliance with Highly Erodible Land and Wetland Conservation provisions.
There is a payment limitation of $250,000 per person or entity for all commodities combined. Applicants who 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.
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