Coronavirus Food Assistance Program, 30825-30835 [2020-11025]
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30825
Rules and Regulations
Federal Register
Vol. 85, No. 99
Thursday, May 21, 2020
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 9
[Docket ID: FSA–2020–0004]
RIN 0503–AA65
Coronavirus Food Assistance Program
Office of the Secretary, USDA.
Final rule.
AGENCY:
ACTION:
The Secretary of Agriculture
is issuing this rule to implement the
Coronavirus Food Assistance Program
(CFAP). CFAP provides assistance to
agricultural producers impacted by the
effects of the COVID–19 outbreak. This
rule establishes provisions for direct
payments to producers of eligible
commodities. This rule specifies the
eligibility requirements, payment
calculations, and application
procedures for CFAP.
DATES: Effective Date: May 21, 2020.
FOR FURTHER INFORMATION CONTACT:
William L. Beam; telephone: (202) 720–
3175; email: Bill.Beam@usda.gov.
Persons with disabilities who require
alternative means for communication
should contact the USDA Target Center
at (202) 720–2600 (voice).
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
In response to the COVID–19
outbreak, the Coronavirus Aid, Relief,
and Economic Stability Act (CARES
Act; Pub. L. 116–136) was enacted. Title
1 of Division B, of that Act provides
$9.5 billion to remain available until
expended, for the Office of the Secretary
to use to prevent, prepare for, and
respond to coronavirus by providing
support for agricultural producers
impacted by coronavirus, including
producers of specialty crops, producers
that supply local food systems,
including farmers markets, restaurants,
and schools, and livestock producers,
including dairy producers. The amount
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is designated by the Congress as being
for an emergency requirement pursuant
to section 251(b)(2)(A)(i) of the Balanced
Budget and Emergency Deficit Control
Act of 1985.
This rule implements the $9.5 billion
provided under the CARES Act to
support agricultural producers to
prevent, prepare for, and respond to
coronavirus. In addition, in accordance
with 15 U.S.C. 714b, the Secretary is
using funds of the Commodity Credit
Corporation (CCC) to assist producers
with the purchase of materials and
facilities required in connection with
the production and marketing of
agricultural commodities and to remove
surplus commodities from normal
marketing channels. At this time, the
amount of CCC funds available for these
purposes is limited to $6.5 billion.
While section 11002 of the CARES Act
provides for a $14 billion replenishment
of CCC’s borrowing authority, these
funds will not be available to CCC until
after June 2020.
Taking into account these two
funding sources, the Secretary has
established CFAP to provide producers
with financial assistance that helps
offset sales losses and increased
marketing costs associated with the
COVID–19 pandemic. Income losses
will be partially compensated under the
CARES Act. CCC authorities will be
used to partially compensate producers
for the purchase of materials and
facilities required in connection with
the production and marketing of
agricultural commodities and the
disposal of surplus commodities from
normal marketing channels that may be
currently unavailable. In order to reduce
the exposure of producers to COVID–19
and to reduce the workload of USDA
employees during this pandemic, one
payment application and one payment
will be issued by USDA to eligible
producers by combining CARES Act and
CCC funds.
Two principal USDA agencies will be
used by the Secretary to implement
CFAP, the Farm Service Agency (FSA)
and the Agricultural Marketing Service
(AMS). FSA will be the principal agency
charged with implementing CFAP and
AMS will assist FSA with respect to
matters dealing with producers of
specialty crops.
Generally, in order to be eligible for
a payment, a producer must have
suffered a 5-percent-or-greater price loss
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over a specified time resulting from the
COVID–19 outbreak or face additional
significant marketing costs for
inventories. COVID–19 price losses are
due to significant declines in certain
types of demand. Additional marketing
costs from COVID–19 are due to surplus
production or to disruptions to shipping
patterns and the orderly marketing of
commodities. In addition, due to the
COVID–19 outbreak, many farmers
markets, restaurants, and schools have
temporarily or permanently closed, thus
causing significantly decreased demand
for commodities grown by producers
that are ordinarily supplied to these
places. Non-specialty crops eligible for
CFAP payments are malting barley,
canola, corn, upland cotton, millet, oats,
sorghum, soybeans, sunflowers, durum
wheat, and hard red spring wheat.
Payments also will be available for
specialty crops (including, but not
limited to almonds, beans, broccoli,
sweet corn, lemons, iceberg lettuce,
spinach, squash, strawberries, and
tomatoes), dairy, cattle, lambs and
yearlings, wool, and hogs and pigs.
Additional eligible commodities, such
as aquaculture and nursery crops
(including cut flowers) will be
announced in a subsequently
announced Notice of Funding
Availability (NOFA) issued by FSA on
behalf of the Secretary; any additional
commodities would also need to meet
the eligibility requirements in this rule.
Throughout this rule, ‘‘producer’’ refers
to a person or legal entity who shares in
the risk of producing a crop or livestock
and who is entitled to a share in the
crop or livestock available for
marketing.
CFAP will provide eligible producers
with financial assistance that helps
them offset sales losses and increased
marketing costs resulting from the
COVID–19 pandemic. With respect to
commodity and livestock losses due to
price declines that occurred between
mid-January 2020 and mid-April 2020
and, in the case of specialty crops, for
products that were shipped but spoiled
and no payment was received, CARES
Act funds will be used in accordance
with authority under the CARES Act.
Funds available to CCC will be used as
authorized by sections 5(b), (d), and (e)
of the CCC Charter Act (15 U.S.C.
714c(b), (d), and (e)). These authorities
will be used to partially compensate
producers for on-going market
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disruptions and assist with the
transition to a more orderly marketing
system as the pandemic wanes by:
• Assisting with the purchase of
materials and facilities required in
connection with the production and
marketing of agricultural commodities;
• Aiding in the removal or
disposition of surplus agricultural
commodities; and
• Aiding in the development of new
and additional markets, marketing
facilities, and uses for such
commodities.
USDA will track funds from the
CARES Act and the CCC Charter Act
separately, to ensure that the payments
are consistent with each respective
authority. Payment for income loss is
consistent with the authority provided
in the CARES Act. Payment to aid in the
removal or disposition of surplus
agricultural commodities and for
additional marketing and production
costs is consistent with the authority
provided in the CCC Charter Act. All
payments will be tracked by the type of
funding. If a single payment includes a
portion from each type of funding,
USDA will track the funds separately.
Payments
Payments will be calculated using
payment rates as specified in Tables 1
& 2 in the CFAP regulation in 7 CFR 9.5.
USDA will make an initial payment of
80 percent of an eligible 2020 CFAP
participant’s calculated 2020 CFAP
payment. By issuing initial payments,
FSA can quickly provide assistance to
those eligible participants that
immediately apply for assistance while
trying to ensure that 2020 CFAP
payments do not exceed the $16 billion
funding limit to ensure those funds are
distributed equitably among all eligible
producers. If funds remain available
after the initial payment to eligible
applicants, USDA will disburse the
remainder of available funding not to
exceed the $16 billion funding limit and
funds may prorated if necessary. The
payment rates will be applied as
discussed below.
For producers of non-specialty crops,
an average payment rate per unit
(bushel, pound, or hundredweight) will
be determined for each eligible
commodity based on the decline in the
weekly average of the futures prices (or
weekly average of the cash prices, if
futures prices are unavailable) 1 between
1 Futures market (May contracts quoted on the
Chicago Board of Trade for all crops other than
wheat and cotton. Wheat uses the May contract
quoted on the Minneapolis Grain Exchange and
upland cotton uses the May contract quoted on the
Intercontinental Exchange. Canola uses the May
contract on the Intercontinental Exchange in
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the average for the week of January 13–
17, 2020, and the average for the week
of April 6–9, 2020.2 Only the
comparison between those two-week
periods is used. If the decline in futures
prices is 5 percent or greater between
those time periods, a payment for that
commodity is triggered and eligible
producers are paid based on inventory
held on January 15, 2020. Eligible
inventory for the purpose of nonspecialty crops is the lower of selfcertified unpriced inventory that an
eligible producer has vested ownership
in as of January 15, 2020, or 50 percent
of the eligible producer’s 2019
production of that commodity. CARES
Act funds will be used to make a
payment for a producer by multiplying
50 percent of the producer’s eligible
inventory on January 15, 2020, by a prespecified payment rate calculated as 50
percent of the calculated futures (or
cash, if futures are unavailable) price
decline. CCC funds will be used to make
a payment to the producer by
multiplying 50 percent of the eligible
inventory by a pre-specified payment
rate calculated as 55 percent of the
futures (or cash, if futures are
unavailable) price decline. These two
separate payments will be issued as one
payment to the eligible producer.
For producers of specialty crops
(including, but not limited to, almonds,
beans, broccoli, sweet corn, lemons,
iceberg lettuce, spinach, squash,
strawberries, and tomatoes) that
incurred a 5-percent-or-greater
reduction in sales price between the
average for the week of January 13–17,
2020, and the average for the week of
April 6–10, 2020, payments will be
based on the producer’s sales (volume)
during that timeframe multiplied by a
pre-specified payment rate calculated as
80 percent of the given crop’s midJanuary to mid-April price change. For
producers of specialty crops that have
been shipped from the farm by April 15,
2020, but subsequently spoiled due to
loss of marketing channels, payments
Canadian dollars, which are exchanged into U.S.
dollars). The price for sorghum is calculated as 95
percent of the corn futures price, which is
consistent with the multiplicative factor used by the
Risk Management Agency (RMA) under the
Commodity Exchange Price Provisions (CEPP). The
price of durum wheat is calculated as 103.4 percent
of the Hard Red Spring Wheat futures price, which
is the multiplicative factor used under CEPP for
Montana, North Dakota, and South Dakota. The
price of sunflowers is the soybean oil price divided
by two plus one cent, which is consistent with the
CEPP for oil-type sunflowers. AMS data is used for
other crops where futures contracts are not traded.
2 The futures markets were closed on Friday,
April 10, 2020, for Good Friday, so the weekly
average futures price for the week starting on
Monday, April 6, 2020, does not include Friday,
April 10, 2020.
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will be based on the volume of shipped,
spoiled crops multiplied by a prespecified payment rate expected to
represent 30 percent of the crop’s sales
value. For producers with specialty crop
shipments that have not left the farm or
mature crops that were unharvested
between January 15, 2020 and April 15,
2020, and which have not been and will
not be sold, payments will be based on
the volume of unharvested and/or
unshipped crops multiplied by a prespecified payment rate expected to
represent 5.875 percent of the crop’s
value.
For cattle, hog and pig, and lamb and
yearling producers, payments will be
made using CARES Act funds by
multiplying a payment rate per head—
specified by species and class—by the
volume of sales occurring between
January 15 and April 15, 2020, by the
applicable payment rate. CCC funds will
be used to make a payment to the
producer by multiplying a payment rate
per head—specified by species—by the
highest inventory number between
April 16 and May 14, 2020.
For producers of wool, a single
average payment rate on a clean basis
per pound will be determined using the
Eastern Market Indicator, as reported by
AMS in the National Wool Review, for
the weeks ending with January 17, 2020,
and April 10, 2020. Only the
comparison between those two-week
periods is used. Producers are paid
based on inventory held on January 15,
2020. Eligible inventory for the purpose
of wool is the lower of self-certified
unpriced inventory that an eligible
producer has vested ownership in as of
January 15, 2020, or 50 percent of the
eligible producer’s 2019 production of
that commodity. CARES Act funds will
be used to make a payment for a
producer by multiplying 50 percent of
the producer’s January 15, 2020, eligible
inventory, by a pre-specified payment
rate calculated as 50 percent of the
calculated price decline. CCC funds will
be used to make a payment to the
producer by multiplying 50 percent of
such inventory by a pre-specified
payment rate calculated as 55 percent of
such price decline.
For dairy producers, payments using
funding from the CARES Act will be
determined by multiplying a producer’s
milk production for the first quarter of
calendar year 2020 by a pre-specified
payment rate calculated as 80 percent of
the decline in prices as determined by
USDA during that quarter. Payments
under the CCC Charter Act will be
determined by multiplying a producer’s
milk production for the first quarter of
calendar year 2020 by a factor of 1.014
—in order to account for increased
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production in the second quarter of
calendar year 2020—by a pre-specified
payment rate calculated as 25 percent of
the decline in prices as determined by
USDA during the first quarter of
calendar year 2020.
Payments under the CARES Act and
CCC Charter Act will be issued as one
payment to the producer if such
producer is eligible to receive both
parts, and disbursed in a combination of
initial and final payments as previously
described.
Producer Eligibility Requirements
To be eligible for a CFAP payment, a
person or legal entity must:
(1) Complete a CFAP application form
and provide any required
documentation (as specified in this final
rule); and
(2) Be a producer having a share in
the eligible commodity between January
15, 2020, and April 15, 2020, or April
16, 2020, through May 14, 2020.
Average Adjusted Gross Income
Limitation and Payment Limitation
CFAP payments are subject to a per
person and legal entity payment
limitation of $250,000. This limitation
applies to the total amount of CFAP
payments made with respect to all
eligible commodities. Similar to the
manner in which statutory payment
limitations are applied in the major
commodity and disaster assistance
programs administered by FSA,
payments will be attributed to an
individual through the direct attribution
process used in those programs. The
total payment amount of CFAP
payments attributed to an individual
will be determined by taking into
account the direct and indirect
ownership interests of the individual in
all legal entities participating in CFAP.
Unlike other FSA administered
programs, special payment limitation
rules will be applied to participants that
are corporations, limited liability
companies, and limited partnerships
(corporate entities). These corporate
entities may receive up to $750,000
based upon the number of shareholders
(not to exceed three shareholders) who
are contributing substantial labor or
management with respect to the
operation of the corporate entity. For a
corporate entity with one such
shareholder, the payment limit for the
entity is $250,000; for a corporate entity
with two such shareholders, the
payment limit for the entity is $500,000
if at least two members contribute
substantial labor or management with
respect to the operation of the corporate
entity; and for a corporate entity with
three such shareholders, the limit is
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$750,000 if at least three members
contribute substantial labor or
management with respect to the
operation of the corporate entity. If
payments are calculated for a corporate
entity and those payments exceed the
applicable limit of $250,000, $500,000
or $750,000, the reduction will be
attributed to all members of the entity
to ensure that a net payment to the
entity is not in excess of the applicable
limitation. A corporate entity may
receive more than $250,000 in CFAP
payments if the applicant, under
penalty of perjury, certifies that two or
three members of the corporation each
provide at least 400 hours of active
personal management or personal active
labor, in which case the corporate entity
may be eligible to receive up to
$500,000 or $750,000, respectively.
A person or legal entity, other than a
joint venture or general partnership, is
ineligible for payments if the person’s or
legal entity’s average adjusted gross
income (AGI), using the average of the
adjusted gross incomes for the 2016,
2017 and 2018 tax years, is more than
$900,000, unless at least 75 percent of
that person’s or legal entity’s average
AGI is derived from farming, ranching,
or forestry-related activities. If at least
75 percent of the person’s or legal
entity’s AGI is derived from farming,
ranching, or forestry-related activities
and the participant provides the
required certification and
documentation, the person or legal
entity is eligible to receive CFAP
payments up to the applicable payment
limitation noted above. With respect to
joint ventures and general partnerships,
this AGI provision will be applied to
each member of the joint venture and
general partnership.
CFAP General Requirements
General requirements that apply to
other FSA-administered commodity
programs also apply to CFAP, including
compliance with the provisions of 7
CFR part 12, ‘‘Highly Erodible Land and
Wetland Conservation.’’
The regulations in 7 CFR part 1400,
subpart E, are applicable to foreign
persons and legal entities containing
members, stockholders, or partners who
are foreign persons applying for CFAP.
Under the subpart E regulations, in
order for a foreign person to receive a
CFAP payment, the person must
provide land, capital, and a substantial
amount of active personal labor to the
farming operation. For the purposes for
this rule, USDA has established that 400
hours of active personal labor or active
personal management as defined in 7
CFR 1400.3 is considered a substantial
contribution to the farming operation. If
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a legal entity is owned in whole or in
part by a foreign person, then in order
for the legal entity to receive a payment
that is representative of the foreign
person’s interest in the entity, the
foreign person must provide a
substantial amount of active personal
labor in the operation of the legal entity.
Additionally, United States Federal,
State, and local governments are not
eligible for CFAP payments.
There is no requirement to have crop
insurance coverage or coverage under
the Noninsured Crop Disaster
Assistance Program (NAP) for an
eligible CFAP commodity to be eligible
for participation in CFAP.
Appeal regulations specified in 7 CFR
parts 11 and 780 apply to
determinations under CFAP. The
determination of matters of general
applicability that are not in response to,
or result from, an individual set of facts
in an individual participant’s
application for payment are not matters
that can be appealed. Such matters of
general applicability include, but are
not limited to, the determination of
payment rates and commodities
included in CFAP.
Application Process
USDA will accept CFAP applications
beginning May 26, 2020. To apply for
CFAP payments, producers must submit
a completed CFAP application either in
person, by mail, email, or facsimile to
an FSA county office. If a producer who
applies must submit additional
documentation for eligibility, such as
certifications of compliance with
adjusted gross income provisions and
conservation compliance activities,
those additional documents and forms
must be submitted no later than 60 days
from the date a producer signs the
application. Payments will not be made
until all necessary eligibility
documentation is received, and will be
reduced or not issued to the individuals
or members of the entity when the
documentation is not submitted timely.
If supporting documentation is
requested to verify the amounts
specified on the application, the
producer must provide records that
substantiate the reported amounts. The
producer’s production for the
commodity, which includes nonspecialty crops, dairy, and specialty
crops, is based on production records.
The producer’s inventory, which
includes livestock, non-specialty crops,
and wool, is based on inventory records.
Examples of supporting documentation
include evidence provided by the
producer that is used to substantiate the
amount of production or inventory
reported, including copies of receipts,
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ledgers of income, income statements of
deposit slips, veterinarian records,
register tapes, invoices for custom
harvesting, and records to verify
production costs, contemporaneous
measurements, truck scale tickets, or
contemporaneous diaries that are
determined acceptable by USDA.
For specialty crops, FSA will process
applications from producers who
experienced loss due to the 5-percentor-greater reduction in sales price. FSA
will send some applications to AMS to
be spot-checked prior to payment. AMS
will review the applications and
provide payment recommendations to
FSA.
The CFAP application period will end
August 28, 2020. If any supporting
documentation or form is required in
order to process the CFAP application
and that documentation or form is not
submitted to FSA within 60 days of the
producer’s signature date on the
application, the CFAP application that
had been submitted will not be
processed and will not be acted on by
USDA.
Provisions Requiring Refund to USDA
In the event that any application for
a CFAP payment resulted from
erroneous information reported by the
producer, the payment will be
recalculated, and the producer must
refund any excess payment to USDA. If
the error was the producer’s error, the
refund must include interest 3 to be
calculated from the date of the
disbursement to the producer.
If USDA determines that the
producer’s application misrepresented
either the total amount or producer’s
share of the crop, head of livestock, or
production, or if the CFAP payment
would exceed the payment as calculated
based on the correct amount of
production and share, the application
will be disapproved and the participant
must refund to USDA all CFAP
payments made to the producer with
interest from the date of disbursement.
If any corrections to the ownership
interest in the crop are made and would
result in a lower CFAP payment, the
producer must refund the difference
with interest from date of disbursement.
Any required refunds must be
resolved in accordance with debt
settlement regulations at 7 CFR part 3.
Effective Date and Notice and Comment
The Administrative Procedure Act (5
U.S.C. 553(a)(2)) provides that the
notice and comment and 30-day delay
3 The program interest rate is based on the CCC
borrowing rate in effect for the month the payment
was disbursed. The CCC borrowing rate for May is
0.125 percent.
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in the effective date provisions do not
apply when the rule involves specified
actions, including matters relating to
benefits. This rule governs CFAP for
payments to certain commodity
producers and therefore falls within that
exemption.
The Office of Management and Budget
(OMB) designated this rule as major
under the Congressional Review Act
(CRA), as defined by 5 U.S.C. 804(2).
Section 808 of the CRA allows an
agency to make a major regulation
effective immediately if the agency finds
there is good cause to do so. The
beneficiaries of this rule have been
significantly impacted by the COVID–19
outbreak, which has resulted in income
losses due to significant declines in
demand and market disruptions. USDA
finds that notice and public procedure
are contrary to the public interest.
Therefore, even though this rule is a
major rule for purposes of the
Congressional Review Act, USDA is not
required to delay the effective date for
60 days from the date of publication to
allow for Congressional review.
Accordingly, this rule is effective upon
publication in the Federal Register.
Executive Orders 12866, 13563, and
13777
Executive Order 12866, ‘‘Regulatory
Planning and Review,’’ and Executive
Order 13563, ‘‘Improving Regulation
and Regulatory Review,’’ direct agencies
to assess all costs and benefits of
available regulatory alternatives and, if
regulation is necessary, to select
regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety effects, distributive impacts,
and equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. The
requirements in Executive Orders 12866
and 13563 for the analysis of costs and
benefits apply to rules that are
determined to be significant. Further,
Executive Order 13777, ‘‘Enforcing the
Regulatory Reform Agenda,’’ established
a federal policy to alleviate unnecessary
regulatory burdens on the American
people.
The Office of Management and Budget
(OMB) designated this rule as
economically significant under
Executive Order 12866, ‘‘Regulatory
Planning and Review,’’ and therefore,
OMB has reviewed this rule. The costs
and benefits of this rule are summarized
below. The full cost benefit analysis is
available on regulations.gov.
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Cost Benefit Analysis Summary
USDA is implementing CFAP for
producers of agricultural commodities
who have suffered a 5-percent-or-greater
price loss due to COVID–19 and face
additional significant marketing costs
associated that are eligible for
compensation under section 5(b), (d),
and (e) of the CCC Charter Act for
currently held inventories. These
additional significant marketing costs
are associated with lower prices given
significant declines in demand, surplus
production, or by disruptions to
shipping patterns and the orderly
marketing of commodities. Nonspecialty crops eligible for CFAP
payments are malting barley, canola,
corn, upland cotton, millet, oats,
soybeans, sorghum, sunflowers, durum
wheat, and hard red spring wheat.
Payments also will be available to
producers of specialty crops (including,
but not limited to, almonds, beans,
broccoli, sweet corn, lemons, iceberg
lettuce, spinach, squash, strawberries,
and tomatoes) and livestock
commodities (including dairy, cattle,
hogs and pigs, lambs and yearlings, and
wool). CFAP eligibility for certain other
agricultural commodities including
agricultural commodities for which
sufficient information is not currently
available to USDA may be announced
through a NOFA. Approximately 4
percent of the CFAP budget—$637
million— is available to provide
assistance to producers of other
commodities that are identified through
the NOFA process.
CFAP will provide producers of
agricultural commodities with financial
assistance that gives them the ability to
absorb sales losses and increased
marketing costs associated with the
COVID–19 pandemic. Producers will
receive payments under the CARES Act,
in the amount of $9.5 billion, to
partially compensate producers for
losses due to price declines that
occurred between mid-January 2020 and
mid-April, 2020, and for specialty crops
that have been shipped from the farm by
April 15th but subsequently spoiled due
to loss of marketing channel. Producers
will also receive payments under
sections 5(b), (d), and (e) of the CCC
Charter Act to partially compensate
producers for $6.5 billion for on-going
market disruptions and will assist with
the transition to a more orderly
marketing system as the COVID–19
pandemic wanes. CCC funds will assist
producers with the purchase of
materials and facilities required in
connection with the production and
marketing of agricultural commodities
and aid in the development of new and
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additional markets, marketing facilities,
and uses for such commodities.
For producers of non-specialty crops,
a single average payment rate per unit
(bushel, pound, or hundredweight) will
be determined for each eligible
commodity based on the decline in the
average of such futures price (or cash
price, if futures price is unavailable)
using the average of such future price
for the week of January 13–17, 2020, in
a comparison with the average of such
future price for the week of April 6–9,
2020. If the decline of such futures price
over this time frame is 5 percent or
greater, a payment for that commodity is
triggered and producers are paid based
on unpriced inventory held on January
15, 2020. For non-specialty crops,
inventory held is defined as the lower
of self-certified unpriced inventory that
an eligible producer has vested
ownership in on January 15, 2020, or 50
percent of the eligible producer’s 2019
production of that commodity.
Payments made under the CARES Act
will be made by multiplying 50 percent
of the producer’s unpriced inventory
held on January 15, 2020, by 50 percent
of the calculated price decline.
Payments made using CCC funds will be
determined by multiplying 50 percent of
the unpriced inventory held on January
15, 2020, by 55 percent of the same
price decline used with respect to
payments made using CARES Act’s
funds. The producer will receive one
payment consisting of funds made
available under the CARES Act and the
CCC Charter Act.
For producers of specialty crops
(including, but not limited to, almonds,
beans, broccoli, sweet corn, lemons,
iceberg lettuce, spinach, squash,
strawberries, and tomatoes) that realized
a 5-percent-or-greater reduction in sales
price between the average for the week
of January 13–17, 2020, in a comparison
with the average for the week of April
6–10, 2020, payments will be based on
the grower’s sales volume, multiplied by
80 percent of the given crop’s price
change between mid-January and midApril 2020. Producers with specialty
crops that have been shipped from the
farm by April 15 but subsequently
spoiled due to loss of marketing channel
and were not paid are eligible to apply
for up to 30 percent of the crop’s sales
value of that shipment. The 30 percent
was determined assuming the field
value of the crop is 60 percent of the
sales value; the field value is then
multiplied by a 50 percent coverage
level. Producers of specialty crop
shipments that did not leave the farm or
mature crops that remained unharvested
by April 15, 2020, are eligible to submit
a loss claim for compensation of up to
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5.875 percent of the crop’s value. The
5.875 percent is calculated as 25 percent
coverage of the average price loss across
specialty crops for which data are
available.4 (That average price loss is
23.5 percent).
For dairy, cattle, hogs and pigs, and
lambs and yearlings, payments will be
made in a manner similar to crops—
inventory (or sales) of the commodity
(hundredweight or number of animals)
times the payment rate per unit for the
commodity (again, in a comparison of
mid-January to mid-April price data).
For dairy, CARES Act funds will be
used to partially compensate producers
for price losses from the first quarter of
calendar year 2020. CCC funds will be
used to partially compensate for
increased marketing and adjustment
costs for additional milk production in
the second quarter of 2020 associated
with COVID–19 disruptions to
marketing channels and demand
destruction. For hogs and pigs, cattle,
and lambs and yearlings, payments
using CARES Act funds are based on
actual sales between January 15 to April
15, 2020; payments using CCC funds
will be based on spring inventories.
USDA will accept CFAP applications
starting on May 26, 2020, and payments
to eligible producers are expected to be
made once applications are processed.
Total payments to eligible producers,
after accounting for payment limit
reductions, are estimated at $16 billion.
USDA estimates that payments made
using CARES Act funding will total $9.5
billion and based upon funds available
to CCC on the date of issuance of this
rule, will total $6.5 billion. The
payments represent benefits to
producers, which is the government cost
of CFAP.
USDA will make an initial payment of
80 percent of an eligible 2020 CFAP
participant’s calculated 2020 CFAP
payment. By issuing initial payments,
FSA can quickly provide assistance to
those eligible participants that
immediately apply for assistance while
trying to ensure that 2020 CFAP
payments do not exceed the $16 billion
funding limit to ensure those funds are
distributed equitably among all eligible
4 The price data for specialty crops was provided
by AMS and represents an average of all units
shipped of domestic production, whether
conventional or organic. The raw data source for the
prices is the AMS Market News Portal, https://
www.ams.usda.gov/market-news/fruits-vegetables.
The prices are for the shipping point if available,
or terminal market if not. For any particular crop,
shipping point and terminal market prices are not
mixed. The list of crops for which AMS has data
for domestic production for the time periods of
interest is covered by Table 5 in the full cost benefit
analysis, which is available on regulations.gov in
docket FSA–2020–0004.
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30829
producers. If funds remain available
after the initial payment to eligible
applicants, USDA will disburse the
remainder of available funding not to
exceed the $16 billion funding limit and
funds may prorated if necessary.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601–612), as amended by the
Small Business Regulatory Enforcement
Fairness Act of 1996 (SBREFA, Pub. L.
104–121), generally requires an agency
to prepare a regulatory flexibility
analysis of any rule whenever an agency
is required by the Administrative
Procedure Act or any other law to
publish a proposed rule, unless the
agency certifies that the rule will not
have a significant economic impact on
a substantial number of small entities.
This rule is not subject to the Regulatory
Flexibility Act because USDA is not
required by the Administrative
Procedure Act or any other law to
publish a proposed rule for this
rulemaking initiative.
Environmental Review
The environmental impacts of this
final rule have been considered in a
manner consistent with the provisions
of the National Environmental Policy
Act (NEPA), the regulations of the
Council on Environmental Quality (40
CFR parts 1500–1508), and because
USDA will be making the payments to
producers the USDA regulations for
compliance with NEPA (7 CFR part 1b).
Although OMB has designated this
rule as ‘‘economically significant’’
under Executive Order 12866, ‘‘. . .
economic or social effects are not
intended by themselves to require
preparation of an environmental impact
statement’’ when not interrelated to
natural or physical environmental
effects (see 40 CFR 1508.14). CFAP was
designed to avoid skewing planting
decisions. Producers continue to make
their planting and production decisions
with the market signals in mind, rather
than any expectation of what a new
USDA program might look like. The
discretionary aspects of CFAP (for
example, determining AGI and payment
limitations) were designed to be
consistent with established USDA and
CCC programs and are not expected to
have any impact on the human
environment, as CFAP payments will
only be made after the commodity has
been produced. Accordingly, the
following Categorical Exclusion in 7
CFR part 1b applies: § 1b.3(a)(2), which
applies to activities that deal solely with
the funding of programs, such as
program budget proposals,
disbursements, and the transfer or
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reprogramming of funds. As such, the
implementation of and participation in
CFAP do not constitute major Federal
actions that would significantly affect
the quality of the human environment,
individually or cumulatively. Therefore,
an environmental assessment or
environmental impact statement for this
regulatory action, will not be prepared;
this rule serves as documentation of the
programmatic environmental
compliance decision for this Federal
action.
Executive Order 12372
Executive Order 12372,
‘‘Intergovernmental Review of Federal
Programs,’’ requires consultation with
State and local officials that would be
directly affect by proposed Federal
financial assistance. The objectives of
the Executive Order are to foster an
intergovernmental partnership and a
strengthened Federalism, by relying on
State and local processes for State and
local government coordination and
review of proposed Federal Financial
assistance and direct Federal
development. For reasons specified in
the final rule related notice to 7 CFR
part 3015, subpart V (48 FR 29115, June
24, 1983), the programs and activities
within this rule are excluded from the
scope of Executive Order 12372, which
requires intergovernmental consultation
with State and local officials.
Executive Order 12988
This rule has been reviewed under
Executive Order 12988, ‘‘Civil Justice
Reform.’’ This rule will not preempt
State or local laws, regulations, or
policies unless they represent an
irreconcilable conflict with this rule.
The rule will not have retroactive effect.
Before any judicial action may be
brought regarding the provisions of this
rule, the administrative appeal
provisions of 7 CFR parts 11 and 780
must be exhausted.
Executive Order 13132
This rule has been reviewed under
Executive Order 13132, ‘‘Federalism.’’
The policies contained in this rule do
not have any substantial direct effect on
States, on the relationship between the
Federal Government and the States, or
on the distribution of power and
responsibilities among the various
levels of government, except as required
by law. Nor does this rule impose
substantial direct compliance costs on
State and local governments. Therefore,
consultation with the States is not
required.
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Executive Order 13175
This rule has been reviewed for
compliance with Executive Order
13175, ‘‘Consultation and Coordination
with Indian Tribal Governments.’’
Executive Order 13175 requires Federal
agencies to consult and coordinate with
Tribes on a government-to-government
basis on policies that have Tribal
implications, including regulations,
legislative comments proposed
legislation, and other policy statements
or actions that have substantial direct
effects on one or more Indian Tribes, on
the relationship between the Federal
Government and Indian Tribes or on the
distribution of power and
responsibilities between the Federal
Government and Indian Tribes.
USDA has assessed the impact of this
rule on Indian Tribes and determined
that this rule does not, to our
knowledge, have Tribal implications
that required Tribal consultation under
Executive Order 13175. If a Tribe
requests consultation, the USDA Office
of Tribal Relations (OTR) will ensure
meaningful consultation is provided
where changes, additions, and
modifications are not expressly
mandated by Congress.
Outside of Tribal consultation, USDA
is working with Tribes to provide
information about CFAP and other
issues. Specifically, to date, USDA held
a call with Navajo Nation on Tuesday,
May 12, 2020; CFAP was one of the
items presented—there were no
questions raised about CFAP. OTR will
host a listening session between FSA,
AMS, and Tribal leaders on Thursday,
May 21, 2020, at 3:00 p.m.
The Unfunded Mandates Reform Act of
1995
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA, Pub. L.
104–4) requires Federal agencies to
assess the effects of their regulatory
actions on State local, and Tribal
governments or the private sector.
Agencies generally must prepare a
written statement, including a cost
benefit analysis, for proposed and final
rules with Federal mandates that may
result in expenditures of $100 million or
more in any 1 year for State, local, or
Tribal governments, in the aggregate, or
to the private sector. UMRA generally
requires agencies to consider
alternatives and adopt the more cost
effective or least burdensome alternative
that achieves the objectives of the rule.
This rule contains no Federal mandates,
as defined in Title II of UMRA, for State,
local, and Tribal governments or the
private sector. Therefore, this rule is not
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subject to the requirements of sections
202 and 205 of UMRA.
Federal Assistance Programs
The title and number of the Federal
Domestic Assistance Program found in
the Catalog of Federal Domestic
Assistance to which this rule applies is
Coronavirus Food Assistance Program
and 10.130.
Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995, the following
new information collection request that
supports CFAP was submitted to OMB
for emergency approval. OMB approved
the 6-month emergency information
collection. A request for comments on
the information collection will be
included in the NOFA issued
subsequent to this rule.
E-Government Act Compliance
USDA is committed to complying
with the E-Government Act to promote
the use of the internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
List of Subjects in 7 CFR Part 9
Agricultural commodities,
Agriculture, Disaster assistance,
Indemnity payments.
■ For the reasons discussed above,
USDA adds part 9 to title 7 of the Code
of Federal Regulations to read as
follows:
PART 9—CORONAVIRUS FOOD
ASSISTANCE PROGRAM
Sec.
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
Applicability and administration.
Definitions.
Producer eligibility requirements.
Time and method of application.
Calculation of payments.
Eligibility subject to verification.
Miscellaneous provisions.
Perjury.
Authority: 15 U.S.C. 714b and 714c; and
Division B, Title I, Pub. L. 116–136.
§ 9.1
Applicability and administration.
(a) This part specifies the eligibility
requirements and payment calculations
for the Coronavirus Food Assistance
Program (CFAP). CFAP will provide
payments with respect to commodities
that have been significantly impacted by
the effects of the COVID–19 outbreak.
Payments will be made with respect to
only commodities produced in the
United States; commodities imported
into the United States may not be used
to determine any payment made under
this part.
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(b) The program is administered
under the general supervision and
direction of the Administrator, Farm
Service Agency (FSA) with the
assistance of the Agricultural Marketing
Service (AMS).
(c) The FSA State committee will take
any action required by this part that an
FSA county committee has not taken.
The FSA State committee will also:
(1) Correct, or require an FSA county
committee to correct, any action taken
by such county FSA committee that is
not in accordance with the regulations
of this part; or
(2) Require an FSA county committee
to withhold taking any action that is not
in accordance with this part.
(d) No provision or delegation to an
FSA State or county committee will
preclude the FSA Administrator, the
Deputy Administrator, or a designee or
other such person, from determining
any question arising under the programs
of this part, or from reversing or
modifying any determination made by
an FSA State or county committee.
§ 9.2
Definitions.
The following definitions apply to
CFAP. The definitions in parts 718 and
1400 of this title apply, except where
they conflict with the definitions in this
section.
All other cattle means commercially
raised or maintained bovine animals not
meeting the definition of another
category of cattle in this part excluding
beefalo, bison, and animals used for
dairy production or intended for dairy
production.
AMS means USDA’s Agricultural
Marketing Service.
Application means the CFAP
application form.
Aquaculture means only those species
as announced in a NOFA.
Cattle means commercially raised or
maintained bovine animals, excluding
beefalo, bison, and animals used for
dairy production or intended for dairy
production.
Cattle raised or maintained for
breeding purposes means animals
commercially raised or maintained for
use as either a sire or dam for the
production of livestock offspring or
lactation.
Commodity means an agricultural
commodity produced in the United
States and intended to be marketed for
commercial production that has been
designated as eligible for payments
under CFAP.
Crop means non-specialty crops and
specialty crops.
Feeder cattle 600 pounds or more
means cattle weighing more than 600
pounds but less than the weight of
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slaughter cattle-fed cattle as defined in
this section.
Feeder cattle less than 600 pounds
means cattle weighing less than 600
pounds.
First quarter means January, February,
and March of 2020.
Foreign entity means a corporation,
trust, estate, or other similar
organization that has more than 10
percent of its beneficial interest held by
individuals who are not:
(1) Citizens of the United States; or
(2) Lawful aliens possessing a valid
Alien Registration Receipt Card.
Foreign person means any person who
is not a citizen or national of the United
States or who is admitted into the
United States for permanent residence
under the Immigration and Nationality
Act and possesses a valid Alien
Registration Receipt Card issued by the
United States Citizenship and
Immigration Services, Department of
Homeland Security.
Hogs means any swine 120 pounds or
more.
Lambs and yearlings means all sheep
less than 2 years old.
NOFA means a Notice of Funding
Availability under this part published in
the Federal Register.
Non-specialty crop means any of the
following crops: Malting barley, canola,
corn, upland cotton, millet, oats,
sorghum, soybeans, sunflowers, durum
wheat, hard red spring wheat, and any
crops announced in a NOFA. The term
excludes crops intended for grazing.
Pigs means any swine weighing less
than 120 pounds.
Producer means a person or legal
entity who shares in the risk of
producing a crop or livestock and who
is entitled to a share in the crop or
livestock available for marketing or
would have shared had the crop or
livestock been produced and marketed.
A contract grower who does not own the
livestock, will be considered a producer
if the contract allows the grower to have
risk in the livestock.
Slaughter Cattle—fed cattle means
cattle with an average weight in excess
of 1,400 pounds which yield average
carcass weights in excess of 800 pounds
and are intended for slaughter.
Slaughter cattle—mature cattle means
culled cattle raised or maintained for
breeding purposes, but which were
removed from inventory and are
intended for slaughter.
Specialty crops means any of the
following crops: Almonds; apples;
artichokes; asparagus; avocados; beans;
blueberries; broccoli; cabbage;
cantaloupe; carrots; cauliflower; celery;
corn, sweet; cucumbers, eggplant; garlic;
grapefruit; kiwifruit; lemons; lettuce,
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30831
iceberg; lettuce, romaine; mushrooms;
onions, dry; onions, green; oranges;
papayas; peaches; pears; pecans;
peppers, bell type; peppers, other;
potatoes; raspberries; rhubarb; spinach;
squash; strawberries; sweet potatoes;
tangerines; taro; tomatoes; walnuts;
watermelons; and any crops for which
funds are made available and
announced in a NOFA. The term
excludes crops intended for grazing.
Unpriced inventory means any
production that is not subject to an
agreed-upon price in the future through
a forward contract, agreement, or similar
binding document.
Wool means the fiber sheared from a
live sheep and includes, unless noted
otherwise, graded and nongraded wool.
Graded wool is paid on a clean basis,
and ungraded wool is paid on a greasy
basis.
§ 9.3
Producer eligibility requirements.
To be eligible for a CFAP payment, a
producer must:
(a) Meet all of the requirements in this
part;
(b) Be a:
(1) Citizen of the United States;
(2) Resident alien, which for purposes
of this part means ‘‘lawful alien’’ as
defined in part 1400 of this title;
(3) Partnership of citizens of the
United States;
(4) Corporation, limited liability
company, or other organizational
structure organized under State law;
(5) Indian Tribe or Tribal
organization, as defined in section 4(b)
of the Indian Self-Determination and
Education Assistance Act (25 U.S.C.
5304); or
(6) Foreign person or foreign entity
who meets all requirements as described
in part 1400 of this title; and
(c) Have had a share in the eligible
commodity on January 15, 2020, or
April 16, 2020, through May 14, 2020.
§ 9.4
Time and method of application.
(a) An application under this subpart
must be submitted in person, by mail,
email, or facsimile to any FSA county
office by the close of business on August
28, 2020.
(b) Failure of an individual, entity, or
a member of an entity to submit the
following payment limitation and
payment eligibility forms within 60days from the date of signing the CFAP
application, may result in no payment
or a reduced payment:
(1) A farm operating plan for an
individual or legal entity as provided in
part 1400 of this title;
(2) Form CCC–901 Member
Information for Legal Entities (if
applicable);
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(3) An average adjusted gross income
statement for the 2020 program year for
the person or legal entity, including the
legal entity’s members, partners, or
shareholders, as provided in part 1400
of this title; form CCC–941 Average
Adjusted Gross Income (AGI)
Certification and Consent to Disclosure
of Tax Information;
(4) CCC–942 Certification of Income
From Farming, Ranching and Forestry
Operations (optional); and
(5) A highly erodible land
conservation (sometimes referred to
elsewhere as HELC) and wetland
conservation certification as provided in
part 12 of this title (form AD–1026
Highly Erodible Land Conservation
(HELC) and Wetland Conservation (WC)
Certification for CFAP applicant and
applicable affiliates).
(c) If requested by USDA, the
applicant must provide documentation
that:
(1) Establishes the applicant’s ability
and intent to harvest, transport, and
market the commodity for the intended
market or crop’s expected production in
a quantity determined based on the
producer’s approved yield, expected
level of production, or inventory of the
livestock, crop, or commodity;
(2) Establishes the applicant’s
ownership share in the commodity; and
(3) Establishes the applicant’s value at
risk in the commodity.
§ 9.5
Calculation of payments.
(a) Payments for eligible non-specialty
crops will be the sum of:
(1) Unpriced inventory that is
harvested but held in inventory as of
January 15, 2020, not to exceed 50
percent of 2019 total production,
multiplied by 50 percent, multiplied by
the Coronavirus Aid, Relief, and
Economic Stability Act (CARES Act)
payment rate in paragraph (h) of this
section; and
(2) Unpriced inventory as of January
15, 2020, not to exceed 50 percent of
2019 total production, multiplied by 50
percent, multiplied by the Commodity
Credit Corporation (CCC) payment rate
in paragraph (h) of this section.
(b) Payments for eligible specialty
crops will be the sum of:
(1) For specialty crops listed in
paragraph (h) of this section that were
sold between January 15, 2020, and
April 15, 2020, the quantity sold
multiplied by the payment rate in
column 2 of Table 1 in paragraph (h) of
this section;
(2) For specialty crops harvested and
shipped but subsequently spoiled due to
loss of marketing channels between
January 15, 2020, and April 15, 2020,
the harvested and shipped quantity that
spoiled multiplied by the payment rate
in column 3 of Table 1 in paragraph (h)
of this section; and
(3) For unpriced specialty crops that
did not leave the farm or mature crops
that remained unharvested between
January 15, 2020 and April 15, 2020 due
to loss of marketing channel, the sum of
the quantity of crops that did not leave
the farm and the quantity of mature
crops that remained unharvested,
multiplied by the payment rate in
column 4 of Table 1 in paragraph (h) of
this section.
(c) Payments for cattle will be the sum
of the results of the following two
calculations:
(1) Cattle sold between January 15,
2020, to April 15, 2020, multiplied by
the CARES Act payment rate in
paragraph (h) of this section; and
(2) Unpriced cattle inventory between
April 16, 2020, to May 14, 2020,
multiplied by the CCC payment rate in
paragraph (h) of this section.
(d) Payments for hogs and pigs will be
equal to the sum of the results of the
following two calculations:
(1) Hogs and pigs sold between
January 15, 2020, to April 15, 2020,
multiplied by the CARES Act payment
rate in paragraph (h) of this section; and
(2) Unpriced hog and pig inventory
between April 16, 2020, to May 14,
2020, multiplied by the CCC payment
rate in paragraph (h) of this section.
(e) Payments for dairy will be equal to
the sum of the results of the following
two calculations:
(1) First quarter production,
multiplied by the CARES Act payment
rate in paragraph (h) of this section; and
(2) First quarter production,
multiplied by 1.014, multiplied by the
CCC payment rate in paragraph (h) of
this section.
(f) Payments for lambs and yearlings
will be equal to the sum of the results
of the following two calculations:
(1) Lambs and yearlings sold between
January 15, 2020, to April 15, 2020,
multiplied by the CARES Act payment
rate in paragraph (h) of this section; and
(2) Unpriced lambs and yearlings in
inventory between April 16, 2020, to
May 14, 2020, multiplied by the CCC
payment rate in paragraph (h) of this
section.
(g) Payments for wool are the sum of:
(1) Unpriced inventory on January 15,
2020, not to exceed 50 percent of 2019
total production, multiplied by 50
percent, multiplied by the CARES Act
payment rate paragraph (h) of this
section; and
(2) Unpriced inventory on January 15,
2020, not to exceed 50 percent of 2019
total production, multiplied by 50
percent, multiplied by the CCC payment
rate in paragraph (h) of this section.
(h) The payment rates in Tables 1 and
2 of this paragraph (h) will be used to
calculate CFAP payments:
TABLE 1 TO PARAGRAPH (h)—PAYMENT RATES FOR SPECIALTY CROPS
[Including, but not limited to, the listed commodities]
Commodity
CARES Act payment
rate for sales losses
($/lb)
Almonds .......................................................................................
Apples ..........................................................................................
Artichokes ....................................................................................
Asparagus ....................................................................................
Avocados .....................................................................................
Beans ...........................................................................................
Blueberries ...................................................................................
Broccoli ........................................................................................
Cabbage ......................................................................................
Cantaloupe ...................................................................................
Carrots .........................................................................................
Cauliflower ...................................................................................
$0.26
........................................
0.66
........................................
........................................
0.17
........................................
0.62
0.04
........................................
0.2
0.11
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CARES Act payment
rate for product that left
the farm but spoiled due
to loss of marketing
channel
($/lb)
E:\FR\FM\21MYR1.SGM
$0.57
0.18
0.49
0.38
0.14
0.16
0.62
0.49
0.07
0.10
0.11
0.31
21MYR1
CCC Payment rate
($/lb)
$0.11
0.03
0.10
0.07
0.03
0.03
0.12
0.10
0.01
0.02
0.02
0.06
Federal Register / Vol. 85, No. 99 / Thursday, May 21, 2020 / Rules and Regulations
30833
TABLE 1 TO PARAGRAPH (h)—PAYMENT RATES FOR SPECIALTY CROPS—Continued
[Including, but not limited to, the listed commodities]
Commodity
CARES Act payment
rate for sales losses
($/lb)
Celery ...........................................................................................
Corn, sweet ..................................................................................
Cucumbers ...................................................................................
Eggplant .......................................................................................
Garlic ............................................................................................
Grapefruit .....................................................................................
Kiwifruit ........................................................................................
Lemons ........................................................................................
Lettuce, iceberg ...........................................................................
Lettuce, romaine ..........................................................................
Mushrooms ..................................................................................
Onions, dry ..................................................................................
Onions green ...............................................................................
Oranges .......................................................................................
Papaya .........................................................................................
Peaches .......................................................................................
Pears ............................................................................................
Pecans .........................................................................................
Peppers, bell type ........................................................................
Peppers, other .............................................................................
Potatoes .......................................................................................
Raspberries ..................................................................................
Rhubarb .......................................................................................
Spinach ........................................................................................
Squash .........................................................................................
Strawberries .................................................................................
Sweet potatoes ............................................................................
Tangerines ...................................................................................
Taro ..............................................................................................
Tomatoes .....................................................................................
Walnuts ........................................................................................
Watermelons ................................................................................
........................................
0.09
0.13
0.07
........................................
........................................
........................................
0.08
0.20
0.07
........................................
0.01
........................................
........................................
........................................
0.08
0.08
0.28
0.14
0.15
........................................
........................................
0.15
0.37
0.72
0.84
........................................
........................................
........................................
0.64
........................................
........................................
CARES Act payment
rate for product that left
the farm but spoiled due
to loss of marketing
channel
($/lb)
0.07
0.13
0.15
0.15
0.85
0.11
0.32
0.21
0.15
0.12
0.59
0.05
0.30
0.14
0.32
0.32
0.18
0.93
0.22
0.22
0.04
1.45
1.03
0.37
0.39
0.72
0.18
0.22
0.23
0.38
0.45
0.02
CCC Payment rate
($/lb)
0.01
0.03
0.03
0.03
0.17
0.02
0.06
0.04
0.03
0.02
0.11
0.01
0.06
0.03
0.06
0.06
0.03
0.18
0.04
0.04
0.01
0.28
0.20
0.07
0.08
0.14
0.04
0.04
0.05
0.07
0.09
........................................
TABLE 2 TO PARAGRAPH (h)—PAYMENT RATES FOR NON-SPECIALTY CROPS, DAIRY, AND LIVESTOCK
Commodity
Unit
Barley (malting) .........................................................................................................
Canola .......................................................................................................................
Corn ...........................................................................................................................
Durum wheat .............................................................................................................
Hard red spring wheat ..............................................................................................
Millet ..........................................................................................................................
Oats ...........................................................................................................................
Sorghum ....................................................................................................................
Soybeans ..................................................................................................................
Sunflowers .................................................................................................................
Upland cotton ............................................................................................................
Dairy ..........................................................................................................................
Slaughter cattle—mature cattle .................................................................................
Slaughter cattle—fed cattle .......................................................................................
Feeder cattle less than 600 pounds .........................................................................
Feeder cattle 600 pounds or more ...........................................................................
All other cattle ...........................................................................................................
Pigs ...........................................................................................................................
Hogs ..........................................................................................................................
Lambs and yearlings .................................................................................................
Wool (graded, clean basis) .......................................................................................
Wool (non-graded, greasy basis) ..............................................................................
bu .........................
lb ..........................
bu .........................
bu .........................
bu .........................
bu .........................
bu .........................
bu .........................
bu .........................
lb ..........................
lb ..........................
cwt ........................
head .....................
head .....................
head .....................
head .....................
head .....................
head .....................
head .....................
head .....................
lb ..........................
lb ..........................
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E:\FR\FM\21MYR1.SGM
CARES Act
payment rate
($/unit)
0.34
0.01
0.32
0.19
0.18
0.31
0.15
0.30
0.45
0.02
0.09
4.71
92
214
102
139
102
28
18
33
0.71
0.36
21MYR1
CCC payment rate
($/unit)
0.37
0.01
0.35
0.20
0.20
0.34
0.17
0.32
0.50
0.02
0.10
1.47
33
33
33
33
33
17
17
7
0.78
0.39
30834
Federal Register / Vol. 85, No. 99 / Thursday, May 21, 2020 / Rules and Regulations
(i) Payments for cattle and hogs will
be calculated separately for the
following categories:
(1) Slaughter cattle—mature cattle;
(2) Slaughter cattle—fed cattle;
(3) Feeder cattle less than 600 pounds;
(4) Feeder cattle 600 pounds or more;
(5) All other cattle;
(6) Pigs; and
(7) Hogs.
(j)(1) USDA may make payments with
respect to other commodities. In order
to determine whether other
commodities will be included in CFAP,
a notice will be issued that will specify
the types of market information the
public may submit for consideration by
USDA. After receipt of the information
and the use of other related information
available to USDA, a NOFA will specify
the other eligible commodities and the
manner in which payments will be
determined.
(2) Producers that are privately owned
aquaculture businesses growing
freshwater and saltwater products in
controlled environments, including
raceways, ponds, tanks, and
recirculating systems, extending to all
farmed shrimp and salmonids (trout and
salmon) are included in CFAP to the
extent USDA determines individual
types of the products have incurred a
decline in prices of 5 percent or more
between January 15, 2020, and April 15,
2020. The determination of which
species are included will be specified in
the NOFA referenced in paragraph (j)(1)
of this section.
(k) An initial payment will be issued
for 80 percent of each CFAP payment
calculated. A final payment will be
issued on a date determined by the
Secretary, to the extent such funds are
available. The total of all CFAP
payments made, including all initial
and final payments, cannot exceed a
total of $9.5 billion for CARES Act
funds and $6.5 billion for CCC funds.
§ 9.6
Eligibility subject to verification.
(a) Producers who are approved for
participation in CFAP are required to
retain documentation in support of their
application for 3 years after the date of
approval.
(b) Participants receiving CFAP
payments or any other person who
furnishes such information to USDA
must permit authorized representatives
of USDA or the Government
Accountability Office, during regular
business hours, to enter the agricultural
operation and to inspect, examine, and
to allow representatives to make copies
of books, records, or other items for the
purpose of confirming the accuracy of
the information provided by the
participant.
VerDate Sep<11>2014
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Jkt 250001
§ 9.7
Miscellaneous provisions.
(a) If a CFAP payment resulted from
erroneous information provided by a
participant, or any person acting on
their behalf, the payment will be
recalculated and the participant must
refund any excess payment with interest
calculated from the date of the
disbursement of the payment. Any
required refunds must be resolved in
accordance with part 3 of this title.
(b) The regulations in parts 11 and
780 of this title apply to determinations
made under this part.
(c) Any payment under this part will
be made without regard to questions of
title under State law and without regard
to any claim or lien against the
commodity or proceeds from the sale of
the commodity. The regulations
governing offsets in part 3 of this title
do not apply to payments made under
this part.
(d) The $900,000 average AGI
limitation provisions in part 1400 of this
title relating to limits on payments for
persons or legal entities, excluding joint
ventures and general partnerships,
apply to each applicant for CFAP unless
at least 75 percent of the person or legal
entity’s average AGI is derived from
farming, ranching, or forestry-related
activities. The average AGI will be
calculated for a person or such legal
entity based on the 2016, 2017, and
2018 tax years. If the person or such
legal entity’s average AGI is below
$900,000 or at least 75 percent of the
person or legal entity’s average AGI is
derived from farming, ranching, or
forestry-related activities, the person or
legal entity, is eligible to receive
payments under this part.
(e)(1) The total amount of CFAP
payments that a program applicant who
is an individual may receive directly or
through the attribution of payments as
provided in paragraph (e)(3) of this
section is $250,000. The total amount of
payments that a program applicant who
is a legal entity created under State law
may receive is $250,000, except as
provided in paragraph (e)(2) of this
section. Payments made to a program
applicant who is a joint venture or a
general partnership are limited to the
aggregated amount of payments that
individual or legal entity members of
the joint venture or general partnership
may otherwise receive.
(2)(i) The total amount of CFAP
payments a corporation, limited liability
company, or a limited partnership may
receive is $250,000 unless the owners of
the legal entity meet the provisions of
paragraphs (e)(2)(ii) and (iii) of this
section.
(ii) The total amount of CFAP
payments a corporation, limited liability
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Frm 00010
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Sfmt 4700
company, or a limited partnership may
receive is $500,000 if two different
individual owners of the legal entity
each provided at least 400 hours of
active personal labor or active personal
management or combination thereof
with respect to the production of 2019
commodities for which an application
or applications are made in accordance
with this part.
(iii) The total amount of CFAP
payments a corporation, limited liability
company, or a limited partnership may
receive is $750,000 if three different
individual owners of the legal entity
each provided at least 400 hours of
active personal labor or active personal
management or combination thereof
with respect to the production of 2019
commodities for which an application
or applications are made in accordance
with this part.
(3) In accordance with § 1400.105 of
this title, a CFAP payment made to any
legal entity will be attributed to
individuals or legal entities with an
ownership interest in the legal entity.
Payments attributed to a legal entity
with an ownership interest in the legal
entity will be further attributed as
provided in § 1400.105 of this title. If
the total amount of CFAP payments
made directly or indirectly to an
individual or legal entity has met the
applicable amounts specified in
paragraphs (e)(1) and (2) of this section,
the payment to the legal entity will be
reduced commensurate with the amount
of the ownership interest of the
individual or legal entity in the legal
entity. CFAP payments will be
attributed to individuals and legal
entities until the attribution is made
only to an individual except the
attribution will stop at the fourth level
of ownership.
(4) If an individual or legal entity is
not eligible to receive CFAP payments
due to the individual or legal entity
failing to satisfy some other payment
eligibility provision such as AGI in or
conservation compliance provisions or
some other payment eligibility
impediment, the payment made either
directly or indirectly to the individual
or legal entity will be reduced to zero.
The amount of the reduction for the
direct payment to the applicant will be
commensurate with the direct or
indirect ownership interest of the
ineligible individual or ineligible legal
entity. The application of this
ineligibility to receive a CFAP payment
due to the excessive AGI of an
individual or legal entity will stop at the
fourth level of ownership.
(f) For the purposes of the effect of a
lien on eligibility for Federal programs
(28 U.S.C. 3201(e)), USDA waives the
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21MYR1
Federal Register / Vol. 85, No. 99 / Thursday, May 21, 2020 / Rules and Regulations
restriction on receipt of funds under
CFAP but only as to beneficiaries who,
as a condition of the waiver, agree to
apply the CFAP payments to reduce the
amount of the judgment lien.
(g) In addition to any other Federal
laws that apply to CFAP, the following
laws apply: 15 U.S.C. 714; 18 U.S.C.
286, 287, 371, 1001; and 31 U.S.C. 1001.
(h) This part applies to applications
submitted under CFAP through August
28, 2020, or until funds made available
for CFAP are exhausted.
§ 9.8
Perjury.
In either applying for or participating
in CFAP, or both, the producer is
subject to laws against perjury and any
penalties and prosecution resulting
therefrom, with such laws including but
not limited to 18 U.S.C. 1621. If the
producer willfully makes and represents
as true any verbal or written declaration,
certification, statement, or verification
that the producer knows or believes not
to be true, in the course of either
applying for or participating in CFAP, or
both, then the producer is guilty of
perjury and, except as otherwise
provided by law, may be fined,
imprisoned for not more than 5 years, or
both, regardless of whether the producer
makes such verbal or written
declaration, certification, statement, or
verification within or without the
United States.
Stephen L. Censky,
Vice Chairman, Commodity Credit
Corporation, and Deputy Secretary, U.S.
Department of Agriculture.
[FR Doc. 2020–11025 Filed 5–20–20; 8:45 am]
BILLING CODE 3410–05–P
DEPARTMENT OF AGRICULTURE
Rural Housing Service
7 CFR Part 1951
[Docket No. RHS–20–CF–0011]
Notification of Direct Loan Payment
Deferrals for the Community Facilities
Direct Loan Program
Correction
In rule document 2020–08429
beginning on page 22009 in the issue of
Tuesday, April 21, 2020, make the
following correction:
On page 22009, in the DATES section,
‘‘May 12, 2020’’ should read ‘‘April 21,
2020’’.
[FR Doc. C1–2020–08429 Filed 5–20–20; 8:45 am]
BILLING CODE 1301–00–D
VerDate Sep<11>2014
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Jkt 250001
SMALL BUSINESS ADMINISTRATION
13 CFR Parts 120 and 121
[Docket Number SBA–2020–0030]
RIN 3245–AH44
Business Loan Program Temporary
Changes; Paycheck Protection
Program—Treatment of Entities With
Foreign Affiliates
U.S. Small Business
Administration.
ACTION: Interim final rule.
AGENCY:
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consider to be CBI and explain why you
believe SBA should hold this
information as confidential. SBA will
review the information and make the
final determination whether it will
publish the information.
A
Call Center Representative at 833–572–
0502, or the local SBA Field Office; the
list of offices can be found at https://
www.sba.gov/tools/local-assistance/
districtoffices.
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
On April 2, 2020, the U.S.
Small Business Administration (SBA)
posted an interim final rule announcing
the implementation of the Coronavirus
Aid, Relief, and Economic Security Act
(CARES Act). The CARES Act
temporarily adds a new program, titled
the ‘‘Paycheck Protection Program,’’ to
the SBA’s 7(a) Loan Program. The
CARES Act also provides for forgiveness
of up to the full principal amount of
qualifying loans guaranteed under the
Paycheck Protection Program (PPP). The
PPP is intended to provide economic
relief to small businesses nationwide
adversely impacted by the Coronavirus
Disease 2019 (COVID–19). SBA posted
additional interim final rules on April 3,
2020, April 14, 2020, April 24, 2020,
April 28, 2020, April 30, 2020, May 5,
2020, May 8, 2020, May 13, 2020, and
May 14, 2020, and the Department of
the Treasury posted an additional
interim final rule on April 28, 2020.
This interim final rule supplements the
previously posted interim final rules by
providing guidance on additional
eligibility requirements related to
entities with foreign affiliates, and
requests public comment.
DATES:
Effective date: This rule is effective
May 21, 2020.
Applicability date: This interim final
rule applies to applications submitted
under the Paycheck Protection Program
through June 30, 2020, or until funds
made available for this purpose are
exhausted.
Comment date: Comments must be
received on or before June 22, 2020.
ADDRESSES: You may submit comments,
identified by number SBA–2020–0030
through the Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
SBA will post all comments on
www.regulations.gov. If you wish to
submit confidential business
information (CBI) as defined in the User
Notice at www.regulations.gov, please
send an email to ppp-ifr@sba.gov.
Highlight the information that you
SUMMARY:
30835
I. Background Information
On March 13, 2020, President Trump
declared the ongoing Coronavirus
Disease 2019 (COVID–19) pandemic of
sufficient severity and magnitude to
warrant an emergency declaration for all
States, territories, and the District of
Columbia. With the COVID–19
emergency, many small businesses
nationwide are experiencing economic
hardship as a direct result of the
Federal, State, tribal, and local public
health measures that are being taken to
minimize the public’s exposure to the
virus. These measures, some of which
are government-mandated, are being
implemented nationwide and include
the closures of restaurants, bars, and
gyms. In addition, based on the advice
of public health officials, other
measures, such as keeping a safe
distance from others or even stay-athome orders, are being implemented,
resulting in a dramatic decrease in
economic activity as the public avoids
malls, retail stores, and other
businesses.
On March 27, 2020, the President
signed the Coronavirus Aid, Relief, and
Economic Security Act (the CARES Act)
(Pub. L. 116–136) to provide emergency
assistance and health care response for
individuals, families, and businesses
affected by the coronavirus pandemic.
The Small Business Administration
(SBA) received funding and authority
through the CARES Act to modify
existing loan programs and establish a
new loan program to assist small
businesses nationwide adversely
impacted by the COVID–19 emergency.
Section 1102 of the CARES Act
temporarily permits SBA to guarantee
100 percent of 7(a) loans under a new
program titled the ‘‘Paycheck Protection
Program.’’ Section 1106 of the CARES
Act provides for forgiveness of up to the
full principal amount of qualifying
loans guaranteed under the Paycheck
Protection Program (PPP). On April 24,
2020, the President signed the Paycheck
Protection Program and Health Care
Enhancement Act (Pub. L. 116–139),
E:\FR\FM\21MYR1.SGM
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]]>Agencies
[Federal Register Volume 85, Number 99 (Thursday, May 21, 2020)]
[Rules and Regulations]
[Pages 30825-30835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11025]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 85, No. 99 / Thursday, May 21, 2020 / Rules
and Regulations
[[Page 30825]]
DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 9
[Docket ID: FSA-2020-0004]
RIN 0503-AA65
Coronavirus Food Assistance Program
AGENCY: Office of the Secretary, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Secretary of Agriculture is issuing this rule to implement
the Coronavirus Food Assistance Program (CFAP). CFAP provides
assistance to agricultural producers impacted by the effects of the
COVID-19 outbreak. This rule establishes provisions for direct payments
to producers of eligible commodities. This rule specifies the
eligibility requirements, payment calculations, and application
procedures for CFAP.
DATES: Effective Date: May 21, 2020.
FOR FURTHER INFORMATION CONTACT: William L. Beam; telephone: (202) 720-
3175; email: [email protected]. Persons with disabilities who require
alternative means for communication should contact the USDA Target
Center at (202) 720-2600 (voice).
SUPPLEMENTARY INFORMATION:
Background
In response to the COVID-19 outbreak, the Coronavirus Aid, Relief,
and Economic Stability Act (CARES Act; Pub. L. 116-136) was enacted.
Title 1 of Division B, of that Act provides $9.5 billion to remain
available until expended, for the Office of the Secretary to use to
prevent, prepare for, and respond to coronavirus by providing support
for agricultural producers impacted by coronavirus, including producers
of specialty crops, producers that supply local food systems, including
farmers markets, restaurants, and schools, and livestock producers,
including dairy producers. The amount is designated by the Congress as
being for an emergency requirement pursuant to section 251(b)(2)(A)(i)
of the Balanced Budget and Emergency Deficit Control Act of 1985.
This rule implements the $9.5 billion provided under the CARES Act
to support agricultural producers to prevent, prepare for, and respond
to coronavirus. In addition, in accordance with 15 U.S.C. 714b, the
Secretary is using funds of the Commodity Credit Corporation (CCC) to
assist producers with the purchase of materials and facilities required
in connection with the production and marketing of agricultural
commodities and to remove surplus commodities from normal marketing
channels. At this time, the amount of CCC funds available for these
purposes is limited to $6.5 billion. While section 11002 of the CARES
Act provides for a $14 billion replenishment of CCC's borrowing
authority, these funds will not be available to CCC until after June
2020.
Taking into account these two funding sources, the Secretary has
established CFAP to provide producers with financial assistance that
helps offset sales losses and increased marketing costs associated with
the COVID-19 pandemic. Income losses will be partially compensated
under the CARES Act. CCC authorities will be used to partially
compensate producers for the purchase of materials and facilities
required in connection with the production and marketing of
agricultural commodities and the disposal of surplus commodities from
normal marketing channels that may be currently unavailable. In order
to reduce the exposure of producers to COVID-19 and to reduce the
workload of USDA employees during this pandemic, one payment
application and one payment will be issued by USDA to eligible
producers by combining CARES Act and CCC funds.
Two principal USDA agencies will be used by the Secretary to
implement CFAP, the Farm Service Agency (FSA) and the Agricultural
Marketing Service (AMS). FSA will be the principal agency charged with
implementing CFAP and AMS will assist FSA with respect to matters
dealing with producers of specialty crops.
Generally, in order to be eligible for a payment, a producer must
have suffered a 5-percent-or-greater price loss over a specified time
resulting from the COVID-19 outbreak or face additional significant
marketing costs for inventories. COVID-19 price losses are due to
significant declines in certain types of demand. Additional marketing
costs from COVID-19 are due to surplus production or to disruptions to
shipping patterns and the orderly marketing of commodities. In
addition, due to the COVID-19 outbreak, many farmers markets,
restaurants, and schools have temporarily or permanently closed, thus
causing significantly decreased demand for commodities grown by
producers that are ordinarily supplied to these places. Non-specialty
crops eligible for CFAP payments are malting barley, canola, corn,
upland cotton, millet, oats, sorghum, soybeans, sunflowers, durum
wheat, and hard red spring wheat. Payments also will be available for
specialty crops (including, but not limited to almonds, beans,
broccoli, sweet corn, lemons, iceberg lettuce, spinach, squash,
strawberries, and tomatoes), dairy, cattle, lambs and yearlings, wool,
and hogs and pigs. Additional eligible commodities, such as aquaculture
and nursery crops (including cut flowers) will be announced in a
subsequently announced Notice of Funding Availability (NOFA) issued by
FSA on behalf of the Secretary; any additional commodities would also
need to meet the eligibility requirements in this rule. Throughout this
rule, ``producer'' refers to a person or legal entity who shares in the
risk of producing a crop or livestock and who is entitled to a share in
the crop or livestock available for marketing.
CFAP will provide eligible producers with financial assistance that
helps them offset sales losses and increased marketing costs resulting
from the COVID-19 pandemic. With respect to commodity and livestock
losses due to price declines that occurred between mid-January 2020 and
mid-April 2020 and, in the case of specialty crops, for products that
were shipped but spoiled and no payment was received, CARES Act funds
will be used in accordance with authority under the CARES Act. Funds
available to CCC will be used as authorized by sections 5(b), (d), and
(e) of the CCC Charter Act (15 U.S.C. 714c(b), (d), and (e)). These
authorities will be used to partially compensate producers for on-going
market
[[Page 30826]]
disruptions and assist with the transition to a more orderly marketing
system as the pandemic wanes by:
Assisting with the purchase of materials and facilities
required in connection with the production and marketing of
agricultural commodities;
Aiding in the removal or disposition of surplus
agricultural commodities; and
Aiding in the development of new and additional markets,
marketing facilities, and uses for such commodities.
USDA will track funds from the CARES Act and the CCC Charter Act
separately, to ensure that the payments are consistent with each
respective authority. Payment for income loss is consistent with the
authority provided in the CARES Act. Payment to aid in the removal or
disposition of surplus agricultural commodities and for additional
marketing and production costs is consistent with the authority
provided in the CCC Charter Act. All payments will be tracked by the
type of funding. If a single payment includes a portion from each type
of funding, USDA will track the funds separately.
Payments
Payments will be calculated using payment rates as specified in
Tables 1 & 2 in the CFAP regulation in 7 CFR 9.5. USDA will make an
initial payment of 80 percent of an eligible 2020 CFAP participant's
calculated 2020 CFAP payment. By issuing initial payments, FSA can
quickly provide assistance to those eligible participants that
immediately apply for assistance while trying to ensure that 2020 CFAP
payments do not exceed the $16 billion funding limit to ensure those
funds are distributed equitably among all eligible producers. If funds
remain available after the initial payment to eligible applicants, USDA
will disburse the remainder of available funding not to exceed the $16
billion funding limit and funds may prorated if necessary. The payment
rates will be applied as discussed below.
For producers of non-specialty crops, an average payment rate per
unit (bushel, pound, or hundredweight) will be determined for each
eligible commodity based on the decline in the weekly average of the
futures prices (or weekly average of the cash prices, if futures prices
are unavailable) \1\ between the average for the week of January 13-17,
2020, and the average for the week of April 6-9, 2020.\2\ Only the
comparison between those two-week periods is used. If the decline in
futures prices is 5 percent or greater between those time periods, a
payment for that commodity is triggered and eligible producers are paid
based on inventory held on January 15, 2020. Eligible inventory for the
purpose of non-specialty crops is the lower of self-certified unpriced
inventory that an eligible producer has vested ownership in as of
January 15, 2020, or 50 percent of the eligible producer's 2019
production of that commodity. CARES Act funds will be used to make a
payment for a producer by multiplying 50 percent of the producer's
eligible inventory on January 15, 2020, by a pre-specified payment rate
calculated as 50 percent of the calculated futures (or cash, if futures
are unavailable) price decline. CCC funds will be used to make a
payment to the producer by multiplying 50 percent of the eligible
inventory by a pre-specified payment rate calculated as 55 percent of
the futures (or cash, if futures are unavailable) price decline. These
two separate payments will be issued as one payment to the eligible
producer.
---------------------------------------------------------------------------
\1\ Futures market (May contracts quoted on the Chicago Board of
Trade for all crops other than wheat and cotton. Wheat uses the May
contract quoted on the Minneapolis Grain Exchange and upland cotton
uses the May contract quoted on the Intercontinental Exchange.
Canola uses the May contract on the Intercontinental Exchange in
Canadian dollars, which are exchanged into U.S. dollars). The price
for sorghum is calculated as 95 percent of the corn futures price,
which is consistent with the multiplicative factor used by the Risk
Management Agency (RMA) under the Commodity Exchange Price
Provisions (CEPP). The price of durum wheat is calculated as 103.4
percent of the Hard Red Spring Wheat futures price, which is the
multiplicative factor used under CEPP for Montana, North Dakota, and
South Dakota. The price of sunflowers is the soybean oil price
divided by two plus one cent, which is consistent with the CEPP for
oil-type sunflowers. AMS data is used for other crops where futures
contracts are not traded.
\2\ The futures markets were closed on Friday, April 10, 2020,
for Good Friday, so the weekly average futures price for the week
starting on Monday, April 6, 2020, does not include Friday, April
10, 2020.
---------------------------------------------------------------------------
For producers of specialty crops (including, but not limited to,
almonds, beans, broccoli, sweet corn, lemons, iceberg lettuce, spinach,
squash, strawberries, and tomatoes) that incurred a 5-percent-or-
greater reduction in sales price between the average for the week of
January 13-17, 2020, and the average for the week of April 6-10, 2020,
payments will be based on the producer's sales (volume) during that
timeframe multiplied by a pre-specified payment rate calculated as 80
percent of the given crop's mid-January to mid-April price change. For
producers of specialty crops that have been shipped from the farm by
April 15, 2020, but subsequently spoiled due to loss of marketing
channels, payments will be based on the volume of shipped, spoiled
crops multiplied by a pre-specified payment rate expected to represent
30 percent of the crop's sales value. For producers with specialty crop
shipments that have not left the farm or mature crops that were
unharvested between January 15, 2020 and April 15, 2020, and which have
not been and will not be sold, payments will be based on the volume of
unharvested and/or unshipped crops multiplied by a pre-specified
payment rate expected to represent 5.875 percent of the crop's value.
For cattle, hog and pig, and lamb and yearling producers, payments
will be made using CARES Act funds by multiplying a payment rate per
head--specified by species and class--by the volume of sales occurring
between January 15 and April 15, 2020, by the applicable payment rate.
CCC funds will be used to make a payment to the producer by multiplying
a payment rate per head--specified by species--by the highest inventory
number between April 16 and May 14, 2020.
For producers of wool, a single average payment rate on a clean
basis per pound will be determined using the Eastern Market Indicator,
as reported by AMS in the National Wool Review, for the weeks ending
with January 17, 2020, and April 10, 2020. Only the comparison between
those two-week periods is used. Producers are paid based on inventory
held on January 15, 2020. Eligible inventory for the purpose of wool is
the lower of self-certified unpriced inventory that an eligible
producer has vested ownership in as of January 15, 2020, or 50 percent
of the eligible producer's 2019 production of that commodity. CARES Act
funds will be used to make a payment for a producer by multiplying 50
percent of the producer's January 15, 2020, eligible inventory, by a
pre-specified payment rate calculated as 50 percent of the calculated
price decline. CCC funds will be used to make a payment to the producer
by multiplying 50 percent of such inventory by a pre-specified payment
rate calculated as 55 percent of such price decline.
For dairy producers, payments using funding from the CARES Act will
be determined by multiplying a producer's milk production for the first
quarter of calendar year 2020 by a pre-specified payment rate
calculated as 80 percent of the decline in prices as determined by USDA
during that quarter. Payments under the CCC Charter Act will be
determined by multiplying a producer's milk production for the first
quarter of calendar year 2020 by a factor of 1.014 --in order to
account for increased
[[Page 30827]]
production in the second quarter of calendar year 2020--by a pre-
specified payment rate calculated as 25 percent of the decline in
prices as determined by USDA during the first quarter of calendar year
2020.
Payments under the CARES Act and CCC Charter Act will be issued as
one payment to the producer if such producer is eligible to receive
both parts, and disbursed in a combination of initial and final
payments as previously described.
Producer Eligibility Requirements
To be eligible for a CFAP payment, a person or legal entity must:
(1) Complete a CFAP application form and provide any required
documentation (as specified in this final rule); and
(2) Be a producer having a share in the eligible commodity between
January 15, 2020, and April 15, 2020, or April 16, 2020, through May
14, 2020.
Average Adjusted Gross Income Limitation and Payment Limitation
CFAP payments are subject to a per person and legal entity payment
limitation of $250,000. This limitation applies to the total amount of
CFAP payments made with respect to all eligible commodities. Similar to
the manner in which statutory payment limitations are applied in the
major commodity and disaster assistance programs administered by FSA,
payments will be attributed to an individual through the direct
attribution process used in those programs. The total payment amount of
CFAP payments attributed to an individual will be determined by taking
into account the direct and indirect ownership interests of the
individual in all legal entities participating in CFAP.
Unlike other FSA administered programs, special payment limitation
rules will be applied to participants that are corporations, limited
liability companies, and limited partnerships (corporate entities).
These corporate entities may receive up to $750,000 based upon the
number of shareholders (not to exceed three shareholders) who are
contributing substantial labor or management with respect to the
operation of the corporate entity. For a corporate entity with one such
shareholder, the payment limit for the entity is $250,000; for a
corporate entity with two such shareholders, the payment limit for the
entity is $500,000 if at least two members contribute substantial labor
or management with respect to the operation of the corporate entity;
and for a corporate entity with three such shareholders, the limit is
$750,000 if at least three members contribute substantial labor or
management with respect to the operation of the corporate entity. If
payments are calculated for a corporate entity and those payments
exceed the applicable limit of $250,000, $500,000 or $750,000, the
reduction will be attributed to all members of the entity to ensure
that a net payment to the entity is not in excess of the applicable
limitation. A corporate entity may receive more than $250,000 in CFAP
payments if the applicant, under penalty of perjury, certifies that two
or three members of the corporation each provide at least 400 hours of
active personal management or personal active labor, in which case the
corporate entity may be eligible to receive up to $500,000 or $750,000,
respectively.
A person or legal entity, other than a joint venture or general
partnership, is ineligible for payments if the person's or legal
entity's average adjusted gross income (AGI), using the average of the
adjusted gross incomes for the 2016, 2017 and 2018 tax years, is more
than $900,000, unless at least 75 percent of that person's or legal
entity's average AGI is derived from farming, ranching, or forestry-
related activities. If at least 75 percent of the person's or legal
entity's AGI is derived from farming, ranching, or forestry-related
activities and the participant provides the required certification and
documentation, the person or legal entity is eligible to receive CFAP
payments up to the applicable payment limitation noted above. With
respect to joint ventures and general partnerships, this AGI provision
will be applied to each member of the joint venture and general
partnership.
CFAP General Requirements
General requirements that apply to other FSA-administered commodity
programs also apply to CFAP, including compliance with the provisions
of 7 CFR part 12, ``Highly Erodible Land and Wetland Conservation.''
The regulations in 7 CFR part 1400, subpart E, are applicable to
foreign persons and legal entities containing members, stockholders, or
partners who are foreign persons applying for CFAP. Under the subpart E
regulations, in order for a foreign person to receive a CFAP payment,
the person must provide land, capital, and a substantial amount of
active personal labor to the farming operation. For the purposes for
this rule, USDA has established that 400 hours of active personal labor
or active personal management as defined in 7 CFR 1400.3 is considered
a substantial contribution to the farming operation. If a legal entity
is owned in whole or in part by a foreign person, then in order for the
legal entity to receive a payment that is representative of the foreign
person's interest in the entity, the foreign person must provide a
substantial amount of active personal labor in the operation of the
legal entity. Additionally, United States Federal, State, and local
governments are not eligible for CFAP payments.
There is no requirement to have crop insurance coverage or coverage
under the Noninsured Crop Disaster Assistance Program (NAP) for an
eligible CFAP commodity to be eligible for participation in CFAP.
Appeal regulations specified in 7 CFR parts 11 and 780 apply to
determinations under CFAP. The determination of matters of general
applicability that are not in response to, or result from, an
individual set of facts in an individual participant's application for
payment are not matters that can be appealed. Such matters of general
applicability include, but are not limited to, the determination of
payment rates and commodities included in CFAP.
Application Process
USDA will accept CFAP applications beginning May 26, 2020. To apply
for CFAP payments, producers must submit a completed CFAP application
either in person, by mail, email, or facsimile to an FSA county office.
If a producer who applies must submit additional documentation for
eligibility, such as certifications of compliance with adjusted gross
income provisions and conservation compliance activities, those
additional documents and forms must be submitted no later than 60 days
from the date a producer signs the application. Payments will not be
made until all necessary eligibility documentation is received, and
will be reduced or not issued to the individuals or members of the
entity when the documentation is not submitted timely.
If supporting documentation is requested to verify the amounts
specified on the application, the producer must provide records that
substantiate the reported amounts. The producer's production for the
commodity, which includes non-specialty crops, dairy, and specialty
crops, is based on production records. The producer's inventory, which
includes livestock, non-specialty crops, and wool, is based on
inventory records. Examples of supporting documentation include
evidence provided by the producer that is used to substantiate the
amount of production or inventory reported, including copies of
receipts,
[[Page 30828]]
ledgers of income, income statements of deposit slips, veterinarian
records, register tapes, invoices for custom harvesting, and records to
verify production costs, contemporaneous measurements, truck scale
tickets, or contemporaneous diaries that are determined acceptable by
USDA.
For specialty crops, FSA will process applications from producers
who experienced loss due to the 5-percent-or-greater reduction in sales
price. FSA will send some applications to AMS to be spot-checked prior
to payment. AMS will review the applications and provide payment
recommendations to FSA.
The CFAP application period will end August 28, 2020. If any
supporting documentation or form is required in order to process the
CFAP application and that documentation or form is not submitted to FSA
within 60 days of the producer's signature date on the application, the
CFAP application that had been submitted will not be processed and will
not be acted on by USDA.
Provisions Requiring Refund to USDA
In the event that any application for a CFAP payment resulted from
erroneous information reported by the producer, the payment will be
recalculated, and the producer must refund any excess payment to USDA.
If the error was the producer's error, the refund must include interest
\3\ to be calculated from the date of the disbursement to the producer.
---------------------------------------------------------------------------
\3\ The program interest rate is based on the CCC borrowing rate
in effect for the month the payment was disbursed. The CCC borrowing
rate for May is 0.125 percent.
---------------------------------------------------------------------------
If USDA determines that the producer's application misrepresented
either the total amount or producer's share of the crop, head of
livestock, or production, or if the CFAP payment would exceed the
payment as calculated based on the correct amount of production and
share, the application will be disapproved and the participant must
refund to USDA all CFAP payments made to the producer with interest
from the date of disbursement.
If any corrections to the ownership interest in the crop are made
and would result in a lower CFAP payment, the producer must refund the
difference with interest from date of disbursement.
Any required refunds must be resolved in accordance with debt
settlement regulations at 7 CFR part 3.
Effective Date and Notice and Comment
The Administrative Procedure Act (5 U.S.C. 553(a)(2)) provides that
the notice and comment and 30-day delay in the effective date
provisions do not apply when the rule involves specified actions,
including matters relating to benefits. This rule governs CFAP for
payments to certain commodity producers and therefore falls within that
exemption.
The Office of Management and Budget (OMB) designated this rule as
major under the Congressional Review Act (CRA), as defined by 5 U.S.C.
804(2). Section 808 of the CRA allows an agency to make a major
regulation effective immediately if the agency finds there is good
cause to do so. The beneficiaries of this rule have been significantly
impacted by the COVID-19 outbreak, which has resulted in income losses
due to significant declines in demand and market disruptions. USDA
finds that notice and public procedure are contrary to the public
interest. Therefore, even though this rule is a major rule for purposes
of the Congressional Review Act, USDA is not required to delay the
effective date for 60 days from the date of publication to allow for
Congressional review. Accordingly, this rule is effective upon
publication in the Federal Register.
Executive Orders 12866, 13563, and 13777
Executive Order 12866, ``Regulatory Planning and Review,'' and
Executive Order 13563, ``Improving Regulation and Regulatory Review,''
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasizes the importance
of quantifying both costs and benefits, of reducing costs, of
harmonizing rules, and of promoting flexibility. The requirements in
Executive Orders 12866 and 13563 for the analysis of costs and benefits
apply to rules that are determined to be significant. Further,
Executive Order 13777, ``Enforcing the Regulatory Reform Agenda,''
established a federal policy to alleviate unnecessary regulatory
burdens on the American people.
The Office of Management and Budget (OMB) designated this rule as
economically significant under Executive Order 12866, ``Regulatory
Planning and Review,'' and therefore, OMB has reviewed this rule. The
costs and benefits of this rule are summarized below. The full cost
benefit analysis is available on regulations.gov.
Cost Benefit Analysis Summary
USDA is implementing CFAP for producers of agricultural commodities
who have suffered a 5-percent-or-greater price loss due to COVID-19 and
face additional significant marketing costs associated that are
eligible for compensation under section 5(b), (d), and (e) of the CCC
Charter Act for currently held inventories. These additional
significant marketing costs are associated with lower prices given
significant declines in demand, surplus production, or by disruptions
to shipping patterns and the orderly marketing of commodities. Non-
specialty crops eligible for CFAP payments are malting barley, canola,
corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum
wheat, and hard red spring wheat. Payments also will be available to
producers of specialty crops (including, but not limited to, almonds,
beans, broccoli, sweet corn, lemons, iceberg lettuce, spinach, squash,
strawberries, and tomatoes) and livestock commodities (including dairy,
cattle, hogs and pigs, lambs and yearlings, and wool). CFAP eligibility
for certain other agricultural commodities including agricultural
commodities for which sufficient information is not currently available
to USDA may be announced through a NOFA. Approximately 4 percent of the
CFAP budget--$637 million-- is available to provide assistance to
producers of other commodities that are identified through the NOFA
process.
CFAP will provide producers of agricultural commodities with
financial assistance that gives them the ability to absorb sales losses
and increased marketing costs associated with the COVID-19 pandemic.
Producers will receive payments under the CARES Act, in the amount of
$9.5 billion, to partially compensate producers for losses due to price
declines that occurred between mid-January 2020 and mid-April, 2020,
and for specialty crops that have been shipped from the farm by April
15th but subsequently spoiled due to loss of marketing channel.
Producers will also receive payments under sections 5(b), (d), and (e)
of the CCC Charter Act to partially compensate producers for $6.5
billion for on-going market disruptions and will assist with the
transition to a more orderly marketing system as the COVID-19 pandemic
wanes. CCC funds will assist producers with the purchase of materials
and facilities required in connection with the production and marketing
of agricultural commodities and aid in the development of new and
[[Page 30829]]
additional markets, marketing facilities, and uses for such
commodities.
For producers of non-specialty crops, a single average payment rate
per unit (bushel, pound, or hundredweight) will be determined for each
eligible commodity based on the decline in the average of such futures
price (or cash price, if futures price is unavailable) using the
average of such future price for the week of January 13-17, 2020, in a
comparison with the average of such future price for the week of April
6-9, 2020. If the decline of such futures price over this time frame is
5 percent or greater, a payment for that commodity is triggered and
producers are paid based on unpriced inventory held on January 15,
2020. For non-specialty crops, inventory held is defined as the lower
of self-certified unpriced inventory that an eligible producer has
vested ownership in on January 15, 2020, or 50 percent of the eligible
producer's 2019 production of that commodity. Payments made under the
CARES Act will be made by multiplying 50 percent of the producer's
unpriced inventory held on January 15, 2020, by 50 percent of the
calculated price decline. Payments made using CCC funds will be
determined by multiplying 50 percent of the unpriced inventory held on
January 15, 2020, by 55 percent of the same price decline used with
respect to payments made using CARES Act's funds. The producer will
receive one payment consisting of funds made available under the CARES
Act and the CCC Charter Act.
For producers of specialty crops (including, but not limited to,
almonds, beans, broccoli, sweet corn, lemons, iceberg lettuce, spinach,
squash, strawberries, and tomatoes) that realized a 5-percent-or-
greater reduction in sales price between the average for the week of
January 13-17, 2020, in a comparison with the average for the week of
April 6-10, 2020, payments will be based on the grower's sales volume,
multiplied by 80 percent of the given crop's price change between mid-
January and mid-April 2020. Producers with specialty crops that have
been shipped from the farm by April 15 but subsequently spoiled due to
loss of marketing channel and were not paid are eligible to apply for
up to 30 percent of the crop's sales value of that shipment. The 30
percent was determined assuming the field value of the crop is 60
percent of the sales value; the field value is then multiplied by a 50
percent coverage level. Producers of specialty crop shipments that did
not leave the farm or mature crops that remained unharvested by April
15, 2020, are eligible to submit a loss claim for compensation of up to
5.875 percent of the crop's value. The 5.875 percent is calculated as
25 percent coverage of the average price loss across specialty crops
for which data are available.\4\ (That average price loss is 23.5
percent).
---------------------------------------------------------------------------
\4\ The price data for specialty crops was provided by AMS and
represents an average of all units shipped of domestic production,
whether conventional or organic. The raw data source for the prices
is the AMS Market News Portal, https://www.ams.usda.gov/market-news/fruits-vegetables. The prices are for the shipping point if
available, or terminal market if not. For any particular crop,
shipping point and terminal market prices are not mixed. The list of
crops for which AMS has data for domestic production for the time
periods of interest is covered by Table 5 in the full cost benefit
analysis, which is available on regulations.gov in docket FSA-2020-
0004.
---------------------------------------------------------------------------
For dairy, cattle, hogs and pigs, and lambs and yearlings, payments
will be made in a manner similar to crops--inventory (or sales) of the
commodity (hundredweight or number of animals) times the payment rate
per unit for the commodity (again, in a comparison of mid-January to
mid-April price data). For dairy, CARES Act funds will be used to
partially compensate producers for price losses from the first quarter
of calendar year 2020. CCC funds will be used to partially compensate
for increased marketing and adjustment costs for additional milk
production in the second quarter of 2020 associated with COVID-19
disruptions to marketing channels and demand destruction. For hogs and
pigs, cattle, and lambs and yearlings, payments using CARES Act funds
are based on actual sales between January 15 to April 15, 2020;
payments using CCC funds will be based on spring inventories.
USDA will accept CFAP applications starting on May 26, 2020, and
payments to eligible producers are expected to be made once
applications are processed. Total payments to eligible producers, after
accounting for payment limit reductions, are estimated at $16 billion.
USDA estimates that payments made using CARES Act funding will total
$9.5 billion and based upon funds available to CCC on the date of
issuance of this rule, will total $6.5 billion. The payments represent
benefits to producers, which is the government cost of CFAP.
USDA will make an initial payment of 80 percent of an eligible 2020
CFAP participant's calculated 2020 CFAP payment. By issuing initial
payments, FSA can quickly provide assistance to those eligible
participants that immediately apply for assistance while trying to
ensure that 2020 CFAP payments do not exceed the $16 billion funding
limit to ensure those funds are distributed equitably among all
eligible producers. If funds remain available after the initial payment
to eligible applicants, USDA will disburse the remainder of available
funding not to exceed the $16 billion funding limit and funds may
prorated if necessary.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by
the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA,
Pub. L. 104-121), generally requires an agency to prepare a regulatory
flexibility analysis of any rule whenever an agency is required by the
Administrative Procedure Act or any other law to publish a proposed
rule, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
This rule is not subject to the Regulatory Flexibility Act because USDA
is not required by the Administrative Procedure Act or any other law to
publish a proposed rule for this rulemaking initiative.
Environmental Review
The environmental impacts of this final rule have been considered
in a manner consistent with the provisions of the National
Environmental Policy Act (NEPA), the regulations of the Council on
Environmental Quality (40 CFR parts 1500-1508), and because USDA will
be making the payments to producers the USDA regulations for compliance
with NEPA (7 CFR part 1b).
Although OMB has designated this rule as ``economically
significant'' under Executive Order 12866, ``. . . economic or social
effects are not intended by themselves to require preparation of an
environmental impact statement'' when not interrelated to natural or
physical environmental effects (see 40 CFR 1508.14). CFAP was designed
to avoid skewing planting decisions. Producers continue to make their
planting and production decisions with the market signals in mind,
rather than any expectation of what a new USDA program might look like.
The discretionary aspects of CFAP (for example, determining AGI and
payment limitations) were designed to be consistent with established
USDA and CCC programs and are not expected to have any impact on the
human environment, as CFAP payments will only be made after the
commodity has been produced. Accordingly, the following Categorical
Exclusion in 7 CFR part 1b applies: Sec. 1b.3(a)(2), which applies to
activities that deal solely with the funding of programs, such as
program budget proposals, disbursements, and the transfer or
[[Page 30830]]
reprogramming of funds. As such, the implementation of and
participation in CFAP do not constitute major Federal actions that
would significantly affect the quality of the human environment,
individually or cumulatively. Therefore, an environmental assessment or
environmental impact statement for this regulatory action, will not be
prepared; this rule serves as documentation of the programmatic
environmental compliance decision for this Federal action.
Executive Order 12372
Executive Order 12372, ``Intergovernmental Review of Federal
Programs,'' requires consultation with State and local officials that
would be directly affect by proposed Federal financial assistance. The
objectives of the Executive Order are to foster an intergovernmental
partnership and a strengthened Federalism, by relying on State and
local processes for State and local government coordination and review
of proposed Federal Financial assistance and direct Federal
development. For reasons specified in the final rule related notice to
7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), the programs
and activities within this rule are excluded from the scope of
Executive Order 12372, which requires intergovernmental consultation
with State and local officials.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, ``Civil
Justice Reform.'' This rule will not preempt State or local laws,
regulations, or policies unless they represent an irreconcilable
conflict with this rule. The rule will not have retroactive effect.
Before any judicial action may be brought regarding the provisions of
this rule, the administrative appeal provisions of 7 CFR parts 11 and
780 must be exhausted.
Executive Order 13132
This rule has been reviewed under Executive Order 13132,
``Federalism.'' The policies contained in this rule do not have any
substantial direct effect on States, on the relationship between the
Federal Government and the States, or on the distribution of power and
responsibilities among the various levels of government, except as
required by law. Nor does this rule impose substantial direct
compliance costs on State and local governments. Therefore,
consultation with the States is not required.
Executive Order 13175
This rule has been reviewed for compliance with Executive Order
13175, ``Consultation and Coordination with Indian Tribal
Governments.'' Executive Order 13175 requires Federal agencies to
consult and coordinate with Tribes on a government-to-government basis
on policies that have Tribal implications, including regulations,
legislative comments proposed legislation, and other policy statements
or actions that have substantial direct effects on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes or on the distribution of power and responsibilities between the
Federal Government and Indian Tribes.
USDA has assessed the impact of this rule on Indian Tribes and
determined that this rule does not, to our knowledge, have Tribal
implications that required Tribal consultation under Executive Order
13175. If a Tribe requests consultation, the USDA Office of Tribal
Relations (OTR) will ensure meaningful consultation is provided where
changes, additions, and modifications are not expressly mandated by
Congress.
Outside of Tribal consultation, USDA is working with Tribes to
provide information about CFAP and other issues. Specifically, to date,
USDA held a call with Navajo Nation on Tuesday, May 12, 2020; CFAP was
one of the items presented--there were no questions raised about CFAP.
OTR will host a listening session between FSA, AMS, and Tribal leaders
on Thursday, May 21, 2020, at 3:00 p.m.
The Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L.
104-4) requires Federal agencies to assess the effects of their
regulatory actions on State local, and Tribal governments or the
private sector. Agencies generally must prepare a written statement,
including a cost benefit analysis, for proposed and final rules with
Federal mandates that may result in expenditures of $100 million or
more in any 1 year for State, local, or Tribal governments, in the
aggregate, or to the private sector. UMRA generally requires agencies
to consider alternatives and adopt the more cost effective or least
burdensome alternative that achieves the objectives of the rule. This
rule contains no Federal mandates, as defined in Title II of UMRA, for
State, local, and Tribal governments or the private sector. Therefore,
this rule is not subject to the requirements of sections 202 and 205 of
UMRA.
Federal Assistance Programs
The title and number of the Federal Domestic Assistance Program
found in the Catalog of Federal Domestic Assistance to which this rule
applies is Coronavirus Food Assistance Program and 10.130.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995, the
following new information collection request that supports CFAP was
submitted to OMB for emergency approval. OMB approved the 6-month
emergency information collection. A request for comments on the
information collection will be included in the NOFA issued subsequent
to this rule.
E-Government Act Compliance
USDA is committed to complying with the E-Government Act to promote
the use of the internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
List of Subjects in 7 CFR Part 9
Agricultural commodities, Agriculture, Disaster assistance,
Indemnity payments.
0
For the reasons discussed above, USDA adds part 9 to title 7 of the
Code of Federal Regulations to read as follows:
PART 9--CORONAVIRUS FOOD ASSISTANCE PROGRAM
Sec.
9.1 Applicability and administration.
9.2 Definitions.
9.3 Producer eligibility requirements.
9.4 Time and method of application.
9.5 Calculation of payments.
9.6 Eligibility subject to verification.
9.7 Miscellaneous provisions.
9.8 Perjury.
Authority: 15 U.S.C. 714b and 714c; and Division B, Title I,
Pub. L. 116-136.
Sec. 9.1 Applicability and administration.
(a) This part specifies the eligibility requirements and payment
calculations for the Coronavirus Food Assistance Program (CFAP). CFAP
will provide payments with respect to commodities that have been
significantly impacted by the effects of the COVID-19 outbreak.
Payments will be made with respect to only commodities produced in the
United States; commodities imported into the United States may not be
used to determine any payment made under this part.
[[Page 30831]]
(b) The program is administered under the general supervision and
direction of the Administrator, Farm Service Agency (FSA) with the
assistance of the Agricultural Marketing Service (AMS).
(c) The FSA State committee will take any action required by this
part that an FSA county committee has not taken. The FSA State
committee will also:
(1) Correct, or require an FSA county committee to correct, any
action taken by such county FSA committee that is not in accordance
with the regulations of this part; or
(2) Require an FSA county committee to withhold taking any action
that is not in accordance with this part.
(d) No provision or delegation to an FSA State or county committee
will preclude the FSA Administrator, the Deputy Administrator, or a
designee or other such person, from determining any question arising
under the programs of this part, or from reversing or modifying any
determination made by an FSA State or county committee.
Sec. 9.2 Definitions.
The following definitions apply to CFAP. The definitions in parts
718 and 1400 of this title apply, except where they conflict with the
definitions in this section.
All other cattle means commercially raised or maintained bovine
animals not meeting the definition of another category of cattle in
this part excluding beefalo, bison, and animals used for dairy
production or intended for dairy production.
AMS means USDA's Agricultural Marketing Service.
Application means the CFAP application form.
Aquaculture means only those species as announced in a NOFA.
Cattle means commercially raised or maintained bovine animals,
excluding beefalo, bison, and animals used for dairy production or
intended for dairy production.
Cattle raised or maintained for breeding purposes means animals
commercially raised or maintained for use as either a sire or dam for
the production of livestock offspring or lactation.
Commodity means an agricultural commodity produced in the United
States and intended to be marketed for commercial production that has
been designated as eligible for payments under CFAP.
Crop means non-specialty crops and specialty crops.
Feeder cattle 600 pounds or more means cattle weighing more than
600 pounds but less than the weight of slaughter cattle-fed cattle as
defined in this section.
Feeder cattle less than 600 pounds means cattle weighing less than
600 pounds.
First quarter means January, February, and March of 2020.
Foreign entity means a corporation, trust, estate, or other similar
organization that has more than 10 percent of its beneficial interest
held by individuals who are not:
(1) Citizens of the United States; or
(2) Lawful aliens possessing a valid Alien Registration Receipt
Card.
Foreign person means any person who is not a citizen or national of
the United States or who is admitted into the United States for
permanent residence under the Immigration and Nationality Act and
possesses a valid Alien Registration Receipt Card issued by the United
States Citizenship and Immigration Services, Department of Homeland
Security.
Hogs means any swine 120 pounds or more.
Lambs and yearlings means all sheep less than 2 years old.
NOFA means a Notice of Funding Availability under this part
published in the Federal Register.
Non-specialty crop means any of the following crops: Malting
barley, canola, corn, upland cotton, millet, oats, sorghum, soybeans,
sunflowers, durum wheat, hard red spring wheat, and any crops announced
in a NOFA. The term excludes crops intended for grazing.
Pigs means any swine weighing less than 120 pounds.
Producer means a person or legal entity who shares in the risk of
producing a crop or livestock and who is entitled to a share in the
crop or livestock available for marketing or would have shared had the
crop or livestock been produced and marketed. A contract grower who
does not own the livestock, will be considered a producer if the
contract allows the grower to have risk in the livestock.
Slaughter Cattle--fed cattle means cattle with an average weight in
excess of 1,400 pounds which yield average carcass weights in excess of
800 pounds and are intended for slaughter.
Slaughter cattle--mature cattle means culled cattle raised or
maintained for breeding purposes, but which were removed from inventory
and are intended for slaughter.
Specialty crops means any of the following crops: Almonds; apples;
artichokes; asparagus; avocados; beans; blueberries; broccoli; cabbage;
cantaloupe; carrots; cauliflower; celery; corn, sweet; cucumbers,
eggplant; garlic; grapefruit; kiwifruit; lemons; lettuce, iceberg;
lettuce, romaine; mushrooms; onions, dry; onions, green; oranges;
papayas; peaches; pears; pecans; peppers, bell type; peppers, other;
potatoes; raspberries; rhubarb; spinach; squash; strawberries; sweet
potatoes; tangerines; taro; tomatoes; walnuts; watermelons; and any
crops for which funds are made available and announced in a NOFA. The
term excludes crops intended for grazing.
Unpriced inventory means any production that is not subject to an
agreed-upon price in the future through a forward contract, agreement,
or similar binding document.
Wool means the fiber sheared from a live sheep and includes, unless
noted otherwise, graded and nongraded wool. Graded wool is paid on a
clean basis, and ungraded wool is paid on a greasy basis.
Sec. 9.3 Producer eligibility requirements.
To be eligible for a CFAP payment, a producer must:
(a) Meet all of the requirements in this part;
(b) Be a:
(1) Citizen of the United States;
(2) Resident alien, which for purposes of this part means ``lawful
alien'' as defined in part 1400 of this title;
(3) Partnership of citizens of the United States;
(4) Corporation, limited liability company, or other organizational
structure organized under State law;
(5) Indian Tribe or Tribal organization, as defined in section 4(b)
of the Indian Self-Determination and Education Assistance Act (25
U.S.C. 5304); or
(6) Foreign person or foreign entity who meets all requirements as
described in part 1400 of this title; and
(c) Have had a share in the eligible commodity on January 15, 2020,
or April 16, 2020, through May 14, 2020.
Sec. 9.4 Time and method of application.
(a) An application under this subpart must be submitted in person,
by mail, email, or facsimile to any FSA county office by the close of
business on August 28, 2020.
(b) Failure of an individual, entity, or a member of an entity to
submit the following payment limitation and payment eligibility forms
within 60-days from the date of signing the CFAP application, may
result in no payment or a reduced payment:
(1) A farm operating plan for an individual or legal entity as
provided in part 1400 of this title;
(2) Form CCC-901 Member Information for Legal Entities (if
applicable);
[[Page 30832]]
(3) An average adjusted gross income statement for the 2020 program
year for the person or legal entity, including the legal entity's
members, partners, or shareholders, as provided in part 1400 of this
title; form CCC-941 Average Adjusted Gross Income (AGI) Certification
and Consent to Disclosure of Tax Information;
(4) CCC-942 Certification of Income From Farming, Ranching and
Forestry Operations (optional); and
(5) A highly erodible land conservation (sometimes referred to
elsewhere as HELC) and wetland conservation certification as provided
in part 12 of this title (form AD-1026 Highly Erodible Land
Conservation (HELC) and Wetland Conservation (WC) Certification for
CFAP applicant and applicable affiliates).
(c) If requested by USDA, the applicant must provide documentation
that:
(1) Establishes the applicant's ability and intent to harvest,
transport, and market the commodity for the intended market or crop's
expected production in a quantity determined based on the producer's
approved yield, expected level of production, or inventory of the
livestock, crop, or commodity;
(2) Establishes the applicant's ownership share in the commodity;
and
(3) Establishes the applicant's value at risk in the commodity.
Sec. 9.5 Calculation of payments.
(a) Payments for eligible non-specialty crops will be the sum of:
(1) Unpriced inventory that is harvested but held in inventory as
of January 15, 2020, not to exceed 50 percent of 2019 total production,
multiplied by 50 percent, multiplied by the Coronavirus Aid, Relief,
and Economic Stability Act (CARES Act) payment rate in paragraph (h) of
this section; and
(2) Unpriced inventory as of January 15, 2020, not to exceed 50
percent of 2019 total production, multiplied by 50 percent, multiplied
by the Commodity Credit Corporation (CCC) payment rate in paragraph (h)
of this section.
(b) Payments for eligible specialty crops will be the sum of:
(1) For specialty crops listed in paragraph (h) of this section
that were sold between January 15, 2020, and April 15, 2020, the
quantity sold multiplied by the payment rate in column 2 of Table 1 in
paragraph (h) of this section;
(2) For specialty crops harvested and shipped but subsequently
spoiled due to loss of marketing channels between January 15, 2020, and
April 15, 2020, the harvested and shipped quantity that spoiled
multiplied by the payment rate in column 3 of Table 1 in paragraph (h)
of this section; and
(3) For unpriced specialty crops that did not leave the farm or
mature crops that remained unharvested between January 15, 2020 and
April 15, 2020 due to loss of marketing channel, the sum of the
quantity of crops that did not leave the farm and the quantity of
mature crops that remained unharvested, multiplied by the payment rate
in column 4 of Table 1 in paragraph (h) of this section.
(c) Payments for cattle will be the sum of the results of the
following two calculations:
(1) Cattle sold between January 15, 2020, to April 15, 2020,
multiplied by the CARES Act payment rate in paragraph (h) of this
section; and
(2) Unpriced cattle inventory between April 16, 2020, to May 14,
2020, multiplied by the CCC payment rate in paragraph (h) of this
section.
(d) Payments for hogs and pigs will be equal to the sum of the
results of the following two calculations:
(1) Hogs and pigs sold between January 15, 2020, to April 15, 2020,
multiplied by the CARES Act payment rate in paragraph (h) of this
section; and
(2) Unpriced hog and pig inventory between April 16, 2020, to May
14, 2020, multiplied by the CCC payment rate in paragraph (h) of this
section.
(e) Payments for dairy will be equal to the sum of the results of
the following two calculations:
(1) First quarter production, multiplied by the CARES Act payment
rate in paragraph (h) of this section; and
(2) First quarter production, multiplied by 1.014, multiplied by
the CCC payment rate in paragraph (h) of this section.
(f) Payments for lambs and yearlings will be equal to the sum of
the results of the following two calculations:
(1) Lambs and yearlings sold between January 15, 2020, to April 15,
2020, multiplied by the CARES Act payment rate in paragraph (h) of this
section; and
(2) Unpriced lambs and yearlings in inventory between April 16,
2020, to May 14, 2020, multiplied by the CCC payment rate in paragraph
(h) of this section.
(g) Payments for wool are the sum of:
(1) Unpriced inventory on January 15, 2020, not to exceed 50
percent of 2019 total production, multiplied by 50 percent, multiplied
by the CARES Act payment rate paragraph (h) of this section; and
(2) Unpriced inventory on January 15, 2020, not to exceed 50
percent of 2019 total production, multiplied by 50 percent, multiplied
by the CCC payment rate in paragraph (h) of this section.
(h) The payment rates in Tables 1 and 2 of this paragraph (h) will
be used to calculate CFAP payments:
Table 1 to Paragraph (h)--Payment Rates for Specialty Crops
[Including, but not limited to, the listed commodities]
----------------------------------------------------------------------------------------------------------------
CARES Act payment rate
for product that left
CARES Act payment rate the farm but spoiled
Commodity for sales losses ($/lb) due to loss of CCC Payment rate ($/lb)
marketing channel ($/
lb)
----------------------------------------------------------------------------------------------------------------
Almonds.............................. $0.26 $0.57 $0.11
Apples............................... ....................... 0.18 0.03
Artichokes........................... 0.66 0.49 0.10
Asparagus............................ ....................... 0.38 0.07
Avocados............................. ....................... 0.14 0.03
Beans................................ 0.17 0.16 0.03
Blueberries.......................... ....................... 0.62 0.12
Broccoli............................. 0.62 0.49 0.10
Cabbage.............................. 0.04 0.07 0.01
Cantaloupe........................... ....................... 0.10 0.02
Carrots.............................. 0.2 0.11 0.02
Cauliflower.......................... 0.11 0.31 0.06
[[Page 30833]]
Celery............................... ....................... 0.07 0.01
Corn, sweet.......................... 0.09 0.13 0.03
Cucumbers............................ 0.13 0.15 0.03
Eggplant............................. 0.07 0.15 0.03
Garlic............................... ....................... 0.85 0.17
Grapefruit........................... ....................... 0.11 0.02
Kiwifruit............................ ....................... 0.32 0.06
Lemons............................... 0.08 0.21 0.04
Lettuce, iceberg..................... 0.20 0.15 0.03
Lettuce, romaine..................... 0.07 0.12 0.02
Mushrooms............................ ....................... 0.59 0.11
Onions, dry.......................... 0.01 0.05 0.01
Onions green......................... ....................... 0.30 0.06
Oranges.............................. ....................... 0.14 0.03
Papaya............................... ....................... 0.32 0.06
Peaches.............................. 0.08 0.32 0.06
Pears................................ 0.08 0.18 0.03
Pecans............................... 0.28 0.93 0.18
Peppers, bell type................... 0.14 0.22 0.04
Peppers, other....................... 0.15 0.22 0.04
Potatoes............................. ....................... 0.04 0.01
Raspberries.......................... ....................... 1.45 0.28
Rhubarb.............................. 0.15 1.03 0.20
Spinach.............................. 0.37 0.37 0.07
Squash............................... 0.72 0.39 0.08
Strawberries......................... 0.84 0.72 0.14
Sweet potatoes....................... ....................... 0.18 0.04
Tangerines........................... ....................... 0.22 0.04
Taro................................. ....................... 0.23 0.05
Tomatoes............................. 0.64 0.38 0.07
Walnuts.............................. ....................... 0.45 0.09
Watermelons.......................... ....................... 0.02 .......................
----------------------------------------------------------------------------------------------------------------
Table 2 to Paragraph (h)--Payment Rates for Non-Specialty Crops, Dairy, and Livestock
----------------------------------------------------------------------------------------------------------------
CARES Act
Commodity Unit payment rate ($/ CCC payment rate
unit) ($/unit)
----------------------------------------------------------------------------------------------------------------
Barley (malting)....................... bu............................... 0.34 0.37
Canola................................. lb............................... 0.01 0.01
Corn................................... bu............................... 0.32 0.35
Durum wheat............................ bu............................... 0.19 0.20
Hard red spring wheat.................. bu............................... 0.18 0.20
Millet................................. bu............................... 0.31 0.34
Oats................................... bu............................... 0.15 0.17
Sorghum................................ bu............................... 0.30 0.32
Soybeans............................... bu............................... 0.45 0.50
Sunflowers............................. lb............................... 0.02 0.02
Upland cotton.......................... lb............................... 0.09 0.10
Dairy.................................. cwt.............................. 4.71 1.47
Slaughter cattle--mature cattle........ head............................. 92 33
Slaughter cattle--fed cattle........... head............................. 214 33
Feeder cattle less than 600 pounds..... head............................. 102 33
Feeder cattle 600 pounds or more....... head............................. 139 33
All other cattle....................... head............................. 102 33
Pigs................................... head............................. 28 17
Hogs................................... head............................. 18 17
Lambs and yearlings.................... head............................. 33 7
Wool (graded, clean basis)............. lb............................... 0.71 0.78
Wool (non-graded, greasy basis)........ lb............................... 0.36 0.39
----------------------------------------------------------------------------------------------------------------
[[Page 30834]]
(i) Payments for cattle and hogs will be calculated separately for
the following categories:
(1) Slaughter cattle--mature cattle;
(2) Slaughter cattle--fed cattle;
(3) Feeder cattle less than 600 pounds;
(4) Feeder cattle 600 pounds or more;
(5) All other cattle;
(6) Pigs; and
(7) Hogs.
(j)(1) USDA may make payments with respect to other commodities. In
order to determine whether other commodities will be included in CFAP,
a notice will be issued that will specify the types of market
information the public may submit for consideration by USDA. After
receipt of the information and the use of other related information
available to USDA, a NOFA will specify the other eligible commodities
and the manner in which payments will be determined.
(2) Producers that are privately owned aquaculture businesses
growing freshwater and saltwater products in controlled environments,
including raceways, ponds, tanks, and recirculating systems, extending
to all farmed shrimp and salmonids (trout and salmon) are included in
CFAP to the extent USDA determines individual types of the products
have incurred a decline in prices of 5 percent or more between January
15, 2020, and April 15, 2020. The determination of which species are
included will be specified in the NOFA referenced in paragraph (j)(1)
of this section.
(k) An initial payment will be issued for 80 percent of each CFAP
payment calculated. A final payment will be issued on a date determined
by the Secretary, to the extent such funds are available. The total of
all CFAP payments made, including all initial and final payments,
cannot exceed a total of $9.5 billion for CARES Act funds and $6.5
billion for CCC funds.
Sec. 9.6 Eligibility subject to verification.
(a) Producers who are approved for participation in CFAP are
required to retain documentation in support of their application for 3
years after the date of approval.
(b) Participants receiving CFAP payments or any other person who
furnishes such information to USDA must permit authorized
representatives of USDA or the Government Accountability Office, during
regular business hours, to enter the agricultural operation and to
inspect, examine, and to allow representatives to make copies of books,
records, or other items for the purpose of confirming the accuracy of
the information provided by the participant.
Sec. 9.7 Miscellaneous provisions.
(a) If a CFAP payment resulted from erroneous information provided
by a participant, or any person acting on their behalf, the payment
will be recalculated and the participant must refund any excess payment
with interest calculated from the date of the disbursement of the
payment. Any required refunds must be resolved in accordance with part
3 of this title.
(b) The regulations in parts 11 and 780 of this title apply to
determinations made under this part.
(c) Any payment under this part will be made without regard to
questions of title under State law and without regard to any claim or
lien against the commodity or proceeds from the sale of the commodity.
The regulations governing offsets in part 3 of this title do not apply
to payments made under this part.
(d) The $900,000 average AGI limitation provisions in part 1400 of
this title relating to limits on payments for persons or legal
entities, excluding joint ventures and general partnerships, apply to
each applicant for CFAP unless at least 75 percent of the person or
legal entity's average AGI is derived from farming, ranching, or
forestry-related activities. The average AGI will be calculated for a
person or such legal entity based on the 2016, 2017, and 2018 tax
years. If the person or such legal entity's average AGI is below
$900,000 or at least 75 percent of the person or legal entity's average
AGI is derived from farming, ranching, or forestry-related activities,
the person or legal entity, is eligible to receive payments under this
part.
(e)(1) The total amount of CFAP payments that a program applicant
who is an individual may receive directly or through the attribution of
payments as provided in paragraph (e)(3) of this section is $250,000.
The total amount of payments that a program applicant who is a legal
entity created under State law may receive is $250,000, except as
provided in paragraph (e)(2) of this section. Payments made to a
program applicant who is a joint venture or a general partnership are
limited to the aggregated amount of payments that individual or legal
entity members of the joint venture or general partnership may
otherwise receive.
(2)(i) The total amount of CFAP payments a corporation, limited
liability company, or a limited partnership may receive is $250,000
unless the owners of the legal entity meet the provisions of paragraphs
(e)(2)(ii) and (iii) of this section.
(ii) The total amount of CFAP payments a corporation, limited
liability company, or a limited partnership may receive is $500,000 if
two different individual owners of the legal entity each provided at
least 400 hours of active personal labor or active personal management
or combination thereof with respect to the production of 2019
commodities for which an application or applications are made in
accordance with this part.
(iii) The total amount of CFAP payments a corporation, limited
liability company, or a limited partnership may receive is $750,000 if
three different individual owners of the legal entity each provided at
least 400 hours of active personal labor or active personal management
or combination thereof with respect to the production of 2019
commodities for which an application or applications are made in
accordance with this part.
(3) In accordance with Sec. 1400.105 of this title, a CFAP payment
made to any legal entity will be attributed to individuals or legal
entities with an ownership interest in the legal entity. Payments
attributed to a legal entity with an ownership interest in the legal
entity will be further attributed as provided in Sec. 1400.105 of this
title. If the total amount of CFAP payments made directly or indirectly
to an individual or legal entity has met the applicable amounts
specified in paragraphs (e)(1) and (2) of this section, the payment to
the legal entity will be reduced commensurate with the amount of the
ownership interest of the individual or legal entity in the legal
entity. CFAP payments will be attributed to individuals and legal
entities until the attribution is made only to an individual except the
attribution will stop at the fourth level of ownership.
(4) If an individual or legal entity is not eligible to receive
CFAP payments due to the individual or legal entity failing to satisfy
some other payment eligibility provision such as AGI in or conservation
compliance provisions or some other payment eligibility impediment, the
payment made either directly or indirectly to the individual or legal
entity will be reduced to zero. The amount of the reduction for the
direct payment to the applicant will be commensurate with the direct or
indirect ownership interest of the ineligible individual or ineligible
legal entity. The application of this ineligibility to receive a CFAP
payment due to the excessive AGI of an individual or legal entity will
stop at the fourth level of ownership.
(f) For the purposes of the effect of a lien on eligibility for
Federal programs (28 U.S.C. 3201(e)), USDA waives the
[[Page 30835]]
restriction on receipt of funds under CFAP but only as to beneficiaries
who, as a condition of the waiver, agree to apply the CFAP payments to
reduce the amount of the judgment lien.
(g) In addition to any other Federal laws that apply to CFAP, the
following laws apply: 15 U.S.C. 714; 18 U.S.C. 286, 287, 371, 1001; and
31 U.S.C. 1001.
(h) This part applies to applications submitted under CFAP through
August 28, 2020, or until funds made available for CFAP are exhausted.
Sec. 9.8 Perjury.
In either applying for or participating in CFAP, or both, the
producer is subject to laws against perjury and any penalties and
prosecution resulting therefrom, with such laws including but not
limited to 18 U.S.C. 1621. If the producer willfully makes and
represents as true any verbal or written declaration, certification,
statement, or verification that the producer knows or believes not to
be true, in the course of either applying for or participating in CFAP,
or both, then the producer is guilty of perjury and, except as
otherwise provided by law, may be fined, imprisoned for not more than 5
years, or both, regardless of whether the producer makes such verbal or
written declaration, certification, statement, or verification within
or without the United States.
Stephen L. Censky,
Vice Chairman, Commodity Credit Corporation, and Deputy Secretary, U.S.
Department of Agriculture.
[FR Doc. 2020-11025 Filed 5-20-20; 8:45 am]
BILLING CODE 3410-05-P
