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First Wave of Payments Based on Crop Insurance Data
The U. S Department of Agriculture (USDA) today announced that commodity and specialty crop producers impacted by natural disaster events in 2020 and 2021 will soon begin receiving emergency relief payments totaling approximately $6 billion through the Farm Service Agency’s (FSA) new Emergency Relief Program (ERP) to offset crop yield and value losses.
Background
On September 30, 2021, President Biden signed into law the Extending Government Funding and Delivering Emergency Assistance Act (P.L. 117-43), which includes $10 billion in assistance to agricultural producers impacted by wildfires, droughts, hurricanes, winter storms, and other eligible disasters experienced during calendar years 2020 and 2021. FSA recently made payments to ranchers impacted by drought and wildfire through the first phase of the Emergency Livestock Relief Program (ELRP). ERP is another relief component of the Act.
For impacted producers, existing Federal Crop Insurance or Noninsured Crop Disaster Assistance Program (NAP) data is the basis for calculating initial payments. USDA estimates that phase one ERP benefits will reach more than 220,000 producers who received indemnities for losses covered by federal crop insurance and more than 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 in which the loss occurred 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.
Additionally, producers must have the following forms on file with FSA within 60 days of the ERP phase one deadline, which will later be announced by FSA’s Deputy Administrator for Farm Programs:
- Form AD-2047, Customer Data Worksheet.
- Form CCC-902, Farm Operating Plan for an individual or legal entity.
- Form CCC-901, Member Information for Legal Entities (if applicable).
- Form FSA-510, Request for an Exception to the $125,000 Payment Limitation for Certain Programs (if applicable).
- Form CCC-860, Socially Disadvantaged, Limited Resource, Beginning and Veteran Farmer or Rancher Certification, if applicable, for the 2021 program year.
- 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.
Most producers, especially those 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.
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Crop Insurance – the ERP factor is 75% to 95% depending on the level of coverage ranging from catastrophic to at least 80% coverage.
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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.
Also, there will be certain payment calculation considerations for area plans under crop insurance policies.
The ERP payment percentage for historically underserved producers, including beginning, limited resource, socially disadvantaged, and veteran farmers and ranchers will be increased by 15% of the calculated payment for crops having insurance coverage or NAP.
To qualify for the higher payment percentage, eligible producers must have a CCC-860, Socially Disadvantaged, Limited Resource, Beginning and Veteran Farmer or Rancher Certification, form on file with FSA for the 2021 program year.
Because the amount of loss due to a qualifying disaster event in calendar years 202 and 2021 cannot be separated from the amount of loss caused by other eligible causes of loss as defined by the applicable crop insurance or NAP policy, the ERP phase one payment will be calculated based on the producer’s loss due to all eligible causes of loss.
Future Insurance Coverage Requirements
All producers who receive ERP phase one payments, including those receiving a payment based on crop, tree, bush, or vine insurance policies, are statutorily required to purchase crop insurance, or NAP coverage where crop insurance is not available, for the next two available crop years, as determined by the Secretary. 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 will be determined from the date a producer receives an ERP payment and may vary depending on the timing and availability of crop insurance or NAP for a producer’s particular crops. The final crop year to purchase crop insurance or NAP coverage to meet the second year of coverage for this requirement is the 2026 crop year.
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 both speed implementation and further encourage participation in these permanent programs, such as Federal crop insurance, as Congress intended.
The second phase of both ERP and ELRP programs will fill gaps and cover producers who did not participate in or receive payments through the existing programs that are being leveraged for phase one implementation. When phase one payment processing is complete, the remaining funds will be used to cover gaps identified under phase two.
Through proactive communication and outreach, USDA will keep producers and stakeholders informed as program details are made available. More information on ERP can be found in the Notice of Funding Availability.
Additional Commodity Loss Assistance
The Milk Loss Program and On-Farm Stored Commodity Loss Program are also funded through the Extending Government Funding and Delivering Emergency Assistance Act and will be announced in a future rule in the Federal Register.
More Information
Additional USDA disaster assistance information can be found on 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.
Ranchers are reminded to submit notice of loss for both feed and livestock (transportation) and water hauling. The Emergency Livestock Assistance Program requires a notice of loss must be submitted to qualify for assistance.
ELAP provides financial assistance to eligible producers of livestock, honeybees and farm-raised fish for losses due to disease, certain adverse weather events or loss conditions as determined by the Secretary of Agriculture. In addition to ELAP covering feed transportation costs where grazing and hay resources have been depleted, ELAP now also covers transportation costs associated with hauling livestock to feed sources This includes places where:
• Drought intensity is D2 for eight consecutive weeks as indicated by the U.S. Drought Monitor; or
• Drought intensity is D3 or greater.
Additionally, FSA has updated ELAP policy to also cover water hauling in areas experiencing D2 for eight consecutive weeks, lowering the drought intensity threshold (previously D3) triggering the availability of this financial assistance.
Eligibility
To be eligible for ELAP assistance, livestock must be intended for grazing and producers must have incurred feed or livestock transportation costs on or after Jan. 1, 2021. Although producers will self-certify losses and expenses to FSA, producers are encouraged to maintain good records and retain receipts and related documentation in the event these documents are requested for review by the local FSA County Committee.
Payment Calculations
USDA will reimburse eligible ranchers 60% of livestock transportation costs above what would have been incurred in a normal year. Producers qualifying as underserved (socially disadvantaged, limited resource, beginning or military veteran) will be reimbursed for 90% of the feed transportation cost above what would have been incurred in a normal year.
USDA uses a national cost formula to determine reimbursement costs that will not include the first 25 miles and distances exceeding 1,000 transportation miles. The calculation will also exclude the normal cost to transport hay or feed if the producer normally purchases some feed. For 2022, the initial cost formula of $6.44 per mile will be used (before the percentage is applied).
Online Decision Tool
Producers can use the updated ELAP Feed Livestock Transportation Producer Tool to help producers document and estimate payments to cover both feed and livestock transportation costs caused by drought. The tool (a Microsoft Excel workbook) and other resources are available at fsa.usda.gov/elap. Final payments may vary depending on eligibility. Please contact your local FSA Office, to submit your notice of loss.
Does your operation include specialty crops? Whether you grow fruits, vegetables, tree nuts, dried fruits, horticulture, or nursery crops - USDA is here for you.
Over the past year, USDA has stepped up our support of specialty crop producers and local and regional food systems. USDA believes specialty crop producers are integral to the food system of the future, and we are working to improve available options for specialty crop producers as well as ensure equity in program delivery.
What’s New?
The Risk Management Agency (RMA) rolled out a new insurance option for small-scale producers who sell locally, which is named Micro Farm. This new insurance coverage option simplifies record keeping and covers post-production costs, such as washing and value-added products. It is available now, and you can learn more from an Approved Insurance Provider or your RMA specialty crop liaison.
In addition to Micro Farm, RMA rolled out other new insurance options in the past year, including: California Citrus Trees, Florida Citrus, Production and Revenue History option for Florida strawberries, and Hurricane Insurance Protection-Wind Index (HIP-WI). These new options either fill gaps in coverage or offer advantages over other policies. Since 2020, producers weathered several major hurricanes. The new HIP-WI played a crucial role in recovery with more than $250 million in indemnities paid so far with most payments issued in a matter of weeks following a hurricane.
Interest in growing and insuring specialty crops has grown significantly with $1 billion in liabilities for 1990 to $22 billion in liabilities for 2021. (For more details, check out reports on our Specialty Crops webpage.)
The Farm Service Agency (FSA) also offered pandemic assistance for organic producers. The new Organic and Transitional Education and Certification Program (OTECP) provided assistance to help cover loss of markets, increased costs, labor shortages and expenses related to obtaining or renewing their organic certification.
What’s Improved?
In the past year, RMA made improvements to existing policies -- including Whole-Farm Revenue Protection, a key insurance option for specialty crop producers. Beginning in the 2021 crop year, direct market producers could report two or more commodities using a new combined direct marketing code.
This reduced a tremendous burden for diversified producers and allowed them to receive a premium rate discount for diversification. For 2022, RMA increased coverage for organic and aquaculture producers and enabled organic producers to report certified organic acreage as long as the request for certification had been made by the reporting date, which provides additional flexibility to producers.
Want to Learn More?
These new and improved options for specialty crop producers are but a few of USDA’s strides over the past year to build a fairer, more transparent food system rooted in local and regional production. To learn more, please read USDA’s January 19, 2022, news release.
For crop insurance, visit RMA’s Specialty Crops webpage or contact your specialty crop liaison.
Also, if there is not a standard offer for the crop you would like insured, you may still be able to get a written agreement for coverage. RMA Regional Offices review these requests to help provide coverage. These requests also provide Regional Offices the opportunity to review the possible expansion of the policy to your county.
Lastly, you can read our Specialty Crops webpage on farmers.gov and question-and-answer with two specialty crop liaisons, Adrienne Steinacher and Matt Wilkin.
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Free Consultation services available to small scale farmers, food hubs and farmers markets operating out of California.
Request an appointment at www.caff.org/techsupport
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This is likely no surprise to you, but drought persists across the western U.S. and is intensifying in some areas. No geographic area is immune to the potential of drought at any given time. The U.S. Drought Monitor provides a weekly drought assessment, and it plays an important role in USDA programs that help farmers and ranchers recover from drought.
Fact #1 - Numerous agencies use the Drought Monitor to inform drought-related decisions.
The map identifies areas of drought and labels them by intensity on a weekly basis. It categorizes the entire country as being in one of six levels of drought. The first two, None and Abnormally Dry (D0), are not considered to be drought. The next four describe increasing levels of drought: Moderate (D1), Severe (D2), Extreme (D3) and Exceptional (D4).
While many entities consult the Drought Monitor for drought information, drought declarations are made by federal, state and local agencies that may or may not use the Drought Monitor to inform their decisions. Some of the ways USDA uses it to determine a producer’s eligibility for certain drought assistance programs, like the Livestock Forage Disaster Program and Emergency Haying or Grazing on Conservation Reserve Program acres and to “fast-track” Secretarial drought disaster designations.
Fact #2 - U.S. Drought Monitor is made with more than precipitation data.
When you think about drought, you probably think about water, or the lack of it. Precipitation plays a major role in the creation of the Drought Monitor, but the map’s author considers numerous indicators, including drought impacts and local insight from over 450 expert observers around the country. Authors use several dozen indicators to assess drought, including precipitation, streamflow, reservoir levels, temperature and evaporative demand, soil moisture and vegetation health. Because the drought monitor depicts both short and long‐term drought conditions, the authors must look at data for multiple timeframes. The final map produced each week represents a summary of the story being told by all the pieces of data. To help tell that story, authors don’t just look at data. They converse over the course of the map-making week with experts across the country and draw information about drought impacts from media reports and private citizens.
Fact #3 - A real person, using real data, updates the map.
Each week’s map author, not a computer, processes and analyzes data to update the drought monitor. The map authors are trained climatologists or meteorologists from the National Drought Mitigation Center at the University of Nebraska-Lincoln (the academic partner and website host of the Drought Monitor), the National Oceanic and Atmospheric Administration and USDA. The author’s job is to do what a computer can’t – use their expertise to reconcile the sometimes-conflicting stories told by each stream of data into a single assessment.
Fact #4 - The Drought Monitor provides a current snapshot, not a forecast.
The Drought Monitor is a “snapshot” of conditions observed during the most recent week and builds off the previous week’s map. The map is released on Thursdays and depicts conditions based on data for the week that ended the preceding Tuesday. Rain that falls on the Wednesday just before the USDM’s release won’t be reflected until the next map is published. This provides a consistent, week‐to‐week product and gives the author a window to assess the data and come up with a final map.
Fact #5 – Your input can be part of the drought-monitoring process.
State climatologists and other trained observers in the drought monitoring network relay on-the-ground information from numerous sources to the US Drought monitor author each week. That can include information that you contribute.
The Drought Monitor serves as a trigger for multiple forms of federal disaster relief for agricultural producers, and sometimes producers contact the author to suggest that drought conditions in their area are worse than what the latest drought monitor shows. When the author gets a call like that, it prompts them to look closely at all available data for that area, to see whether measurements of precipitation, temperature, soil moisture and other indicators corroborate producer-submitted reports. This is the process that authors follow whether they receive one report or one hundred reports, although reports from more points may help state officials and others know where to look for impacts.
There are multiple ways to contribute your observations:
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Talk to your state climatologist - Find the current list at the American Association of State Climatologists website.
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Email - Emails sent to droughtmonitor@unl.edu inform the USDM authors.
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Become a CoCoRaHS observer - Submit drought reports along with daily precipitation observations to the Community Collaborative Rain, Hail & Snow Network.
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Submit Condition Monitoring Observer Reports (CMOR) - go.unl.edu/CMOR.
For more information, read our Ask the Expert blog with a NDMC climatologist or visit farmers.gov/protection-recovery.
The Farm Service Agency’s (FSA) Noninsured Crop Disaster Assistance Program (NAP) helps you manage risk through coverage for both crop losses and crop planting that was prevented due to natural disasters. The eligible or “noninsured” crops include agricultural commodities not covered by federal crop insurance.
You must be enrolled in the program and have purchased coverage for the eligible crop in the crop year in which the loss incurred to receive program benefits following a qualifying natural disaster.
NAP Buy-Up Coverage Option
NAP offers higher levels of coverage, from 50 to 65 percent of expected production in 5 percent increments, at 100 percent of the average market price. Buy-up levels of NAP coverage are available if the producer can show at least one year of previously successfully growing the crop for which coverage is being requested.
Producers of organics and crops marketed directly to consumers also may exercise the “buy-up” option to obtain NAP coverage of 100 percent of the average market price at the coverage levels of between 50 and 65 percent of expected production.
NAP basic coverage is available at 55 percent of the average market price for crop losses that exceed 50 percent of expected production.
Buy-up coverage is not available for crops intended for grazing.
NAP Service Fees
For all coverage levels, the NAP service fee is the lesser of $325 per crop or $825 per producer per county, not to exceed a total of $1,950 for a producer with farming interests in multiple counties.
NAP Enhancements for Qualified Military Veterans
Qualified veteran farmers or ranchers are eligible for a service fee waiver and premium reduction, if the NAP applicant meets certain eligibility criteria.
Beginning, limited resource and targeted underserved farmers or ranchers remain eligible for a waiver of NAP service fees and premium reduction when they file form CCC-860, “Socially Disadvantaged, Limited Resource and Beginning Farmer or Rancher Certification.”
For NAP application, eligibility and related program information, contact your local County USDA Service Center or visit fsa.usda.gov/nap.
The USDA Farm Service Agency’s (FSA) Direct Farm Ownership loans can help farmers and ranchers become owner-operators of family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations.
There are three types of Direct Farm Ownership Loans: regular, down payment and joint financing. FSA also offers a Direct Farm Ownership Microloan option for smaller financial needs up to $50,000.
Joint financing allows FSA to provide more farmers and ranchers with access to capital. FSA lends up to 50 percent of the total amount financed. A commercial lender, a State program or the seller of the property being purchased, provides the balance of loan funds, with or without an FSA guarantee. The maximum loan amount for a joint financing loan is $600,000, and the repayment period for the loan is up to 40 years.
The operation must be an eligible farm enterprise. Farm Ownership loan funds cannot be used to finance nonfarm enterprises and all applicants must be able to meet general eligibility requirements. Loan applicants are also required to have participated in the business operations of a farm or ranch for at least three years out of the 10 years prior to the date the application is submitted. The applicant must show documentation that their participation in the business operation of the farm or ranch was not solely as a laborer.
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All producers are encouraged to contact their local FSA office for more information on the final planting date for specific crops. The final planting dates vary by crop, planting period and county so please contact your local FSA office for a list of county-specific planting deadlines. The timely planting of a crop, by the final planting date, may prevent loss of program benefits.
The USDA Farm Service Agency (FSA) in California has partnered with the California Agriculture Mediation Program to provide free mediation services. Mediation can be an effective tool for farmers and ranchers who are experiencing challenges with their farm loans, creditors, neighbors, leases, or USDA agencies,.
Mediation is free to any producer for debt/credit issues, family farm transitions, leases, neighbor disputes, organic certification, adverse USDA decisions, and more. If your issue is not included in our authorized list of covered topics, we’ll work with you to find an affordable option.
Discussions and notes made during mediation cannot be shared unless everyone agrees to do so. Keeping information private helps create a safe space for difficult conversations. If you come to an agreement or plan, the parties may then decide to share it outside of the meeting.
Mediators are trained to help people talk to each other in a productive way. The mediator does not take a “side” in the conversation, but instead is there to support the conversation and move it forward to address the issue at hand. All of our mediators have agricultural backgrounds, so they understand the issues that are unique to the industry.
The mediator leads a discussion about reaching an agreement or plan. Should the parties reach an agreement, the mediator will draft a settlement document, which is a binding contract. But the parties, not the mediator, decide the outcome and course of action.
Statistically, 75 percent of mediations result in an agreement. Sometimes even if a final agreement is not reached, everyone gains a better understanding of the issue. Mediation can go hand-in-hand with other processes such as working with an estate planner or applying for a farm loan. Mediation can reopen lines of communication and help the participants continue productive conversations outside the meeting.
For more information, submit a request for mediation at www.calamp.org
Or contact:
Matt Strassberg (Director) at 916-330-4500 x101 or matts@emcenter.org
Mary Campbell (S. CA Coordinator) at 916-330-4500 x101 or maryc@emcenter.org
Jenna Muller (N. CA Coordinator) at 916-330-4500 x101 or jennam@emcenter.org
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