COVID-19 has affected several industries around the country including the farm industry, and federal organizations such as the United States Department of Agriculture are working to initiate programs to support farmers and small businesses in need of financial assistance.

USDA Secretary Sonny Perdue announced the Coronavirus Food Assistance Program this past month, which will provide $16 billion in direct support for producers who have been impacted by the pandemic. Additionally, the CARES Act and organizations that include Farm Service Agency, Natural Resources Conservation Service and Risk Management Agency are working to provide more flexibilities to help producers affected by the coronavirus outbreak.

The United States Small Business Administration has made multiple programs available to agricultural producers whose operations have been impacted by the coronavirus pandemic including the Paycheck Protection Program and the Economic Injury Disaster Loan Program. 

Illinois Farm Bureau Vice President Brian Duncan, of Polo, said that farmers and small businesses in the state have been utilizing these programs in recent weeks to support their operations.

With states around the country remaining shut down or slowly reopening, farmers and small businesses have been conducting more operations online. Duncan said that producers in Illinois have been utilizing these services, which are provided through the FSA website, the farmers.gov portal and the NRCS Conservation Client Gateway, to stay on top of their operations.

CFAP

The Coronavirus Food Assistance Program will include direct support based on actual losses for agricultural producers where prices and market supply chains have been impacted, as well as assistance for producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19. The program is eligible to farmers regardless of size and market, if they suffered an eligible loss.

Dumped Milk

COVID-19 shutdowns have caused disruption in the milk market, and dairy producers are dumping milk as a result. The Risk Management Agency is ensuring that milk producers who purchased insurance are not inappropriately penalized if their milk must be dumped because of recent market disruptions caused by the coronavirus pandemic.

For the 2020 calendar year, RMA is allowing Approved Insurance Providers (AIPs) to count dumped milk toward the milk marketings for the DRP or actual marketings for the LGM-Dairy programs regardless of whether the milk was sold. Producers will still have to provide to the AIPs supporting documentation from the cooperative or milk handler verifying the actual pounds dumped and that the milk was dumped.

Crop Insurance 

Flexibilities

Producers can continue to work with their Approved Insurance Providers, or AIPs, on policies, claims, and agreements. Farmers with crop insurance questions or needs should continue to contact their insurance agents about conducting business by telephone or email. 

The Risk Management Agency is working with those insurance providers to provide additional flexibilities in response to COVID-19, including enabling producers to send notifications and reports electronically, extending the date for production reports, providing additional time and deferring interest on premium and other payments, authorizing replant self-certification, waiving the witness signature requirement for approval of Assignments of Indemnity, allowing dumped milk to be counted as milk marketings for the Dairy Revenue Protection or actual marketings for the Livestock Gross Margin for dairy programs, allowing phone and electronic transactions for 2021 crop year sales and reporting dates, including options and endorsements, extending the deadline for some perennial crop Pre-Acceptance Inspection Reports, waiving the 2021 crop year inspection requirements for the Nursery and Nursery Value Select programs in certain cases and authorizing AIPs to allow organic producers to report acreage as certified organic, or transitioning to organic, for the 2020 crop year if they can show they have requested a written certification from a certifying agent by their policy’s acreage reporting date.

Farm Loan Flexibilities

The Farm Service Agency is providing additional flexibilities to provide producers with credit options in response to the coronavirus pandemic. Those include accepting faxes or scanned signatures from customers and lenders and following the most current state or local guidance for use of online or virtual notary services. 

FSA is currently relaxing the loan-making process and adding flexibilities for servicing direct and guaranteed loans to provide credit to producers in need. Also, FSA will continue the use of commodity planning prices already approved for the current year. However, customers must be advised of the potential budget, cash flow, and loan impacts if projected prices are unable to be realized.

FSA is extending deadlines for producers to respond to application packages for Primary Loan Servicing and Distressed Loan Servicing. Financially distressed and delinquent direct loan borrowers who have been notified of the available loan servicing options will be provided an additional time to submit a complete application for loan servicing, accept an offer of loan servicing, provide a response to a denial of loan servicing or request homestead protection.

FSA will temporarily suspend loan accelerations, non-judicial foreclosures, and referring foreclosures to the Department of Justice. The U.S. Attorney’s Office will make the determination whether to stop foreclosures and evictions on accounts under its jurisdiction.

In addition to the existing guaranteed loan servicing options already available within the FSA guaranteed loan program, FSA is offering lenders additional flexibility. Standard Eligible Lenders (SEL) may certify that they have met all FSA requirements for annual line of credit advances and will not need FSA prior written approval. 

SEL and Certified Lender Program (CLP) lenders may certify that they have met all FSA requirements for emergency advances and will not need FSA prior written approval. SEL and CLP lenders may certify that they have a feasible plan for additional loans made outside of the guarantee and will not need FSA prior written approval. Finally, loans made under the SBA’s PPP can be made at the lender’s discretion without FSA approval.

Part 2 of story will appear in the June 3rd edition.