Crop Assistance Program Announced

October, 2010

Summary based on Interim Rule to be published in the Federal Register 

• Provides emergency financial assistance to eligible producers of rice, cotton, soybeans, and sweet potatoes in specified counties (see map) for which a Secretarial disaster designation was issued based on excessive moisture and related conditions for the 2009 crop year. (see USDA fact sheet)
• The total available funds are $550 million and the FSA Deputy Administrator may pro-rate payments to keep program outlays within the limit.
• FSA has identified 953 counties in 34 States that received Secretarial disaster designations due to excessive moisture and related conditions in 2009. Cotton Belt states are: Alabama, Arkansas, Florida, Georgia, Kansas, Louisiana, Mississippi, Missouri, New Mexico, North Carolina, Oklahoma, Tennessee, and Texas.
• Producers must meet all of the following requirements to be eligible for a CAP payment:
• have an ownership share and risk of loss in the crop
• have on file an existing 2009 crop year form FSA-578, “Report of Acreage,” as planted or considered planted, and that acreage report must have been on file with FSA prior to the publication of the interim rule;
• the 2009 form FSA-578, Report of Acreage, must specify the producer’s ownership share of a 2009 crop of upland cotton, long grain rice, medium or short grain rice, soybeans, or sweet potatoes, and the amount of acres of those crops planted or considered planted;
• the eligible crop acreage must be located in a primary county for which a Secretarial disaster designation was issued based on excessive moisture and related conditions for the 2009 crop year;
• there must have had been a five percent or greater loss in crop quality or quantity of the 2009 crop of upland cotton, long grain rice, medium or short grain rice, soybeans, or sweet potatoes, for which the producer applies for a CAP payment; the loss must be due to a disaster, as defined in the rule, and the five percent loss is a minimum threshold for CAP eligibility; greater losses do not qualify producers for a larger payment; and,
• application for a CAP payment must be made no later than 45 days after publication of the Interim Rule in the Federal Register-applications received after that date will be ineligible.
• The producer must certify that the loss was at least five percent and maintain verifiable and reliable documentation to justify the certification.
• The five percent loss threshold must be met for each crop for which the producer requests a CAP payment. The individual producer’s share of the crop on the farm must have suffered the loss, independent of what other producers of the crop on that farm may have produced or their loss.
• Producers must be able to document, if requested by FSA, how they determined that the five percent loss threshold was met. For quantity losses, the calculation must use historic yield and expected production as defined in this rule. FSA will provide county average yield data on request. Expected production means the historic yield multiplied by the producer’s share of planted and considered planted acres of the crop for the farm. The producer will need to calculate quantity losses based on historical or expected production of the crop.
• Replacement crops are not eligible for CAP.
• Historic yield means the higher of the county average yield or the producer’s approved yields for eligible crops on the farm. An insured producer's yield will be the higher of the county average yield listed or the approved federal crop insurance APH, for the disaster year. A NAP producer's yield will be the higher of the county average yield or NAP approved yield for the disaster year. CAP payments will be calculated by multiplying the total number of acres of the crop planted or considered planted on the farm by that crop’s per-acre payment rate. FSA determined the rates based on average per-acre revenue losses on the 2009 crop due to moisture-related disasters. The payment rate cannot be greater than actual losses for producers.The per acre payment rates are as follows: Long grain rice $31.93; Medium or short grain $52.46; Upland cotton$17.70; Soybeans $15.62; and Sweet Potatoes $155.41.
• The CAP payment will be based on the producer’s share of the reported or determined planted or considered planted acres of the crop times the per acre payment rate for the crop. If there is more than one eligible producer on a farm that shared in the crop, each producer may apply for a payment based on their share in the crop.
• CAP payments will be treated as 2009 revenue under the Supplemental Revenue Assistance Payments (SURE) Program.
• The payment limits and adjusted gross income (AGI) limits that apply to other CCC and FSA programs apply to CAP. Specifically, no person or legal entity (excluding a joint venture or general partnership) may receive, directly or indirectly, more than $100,000 in CAP benefits. In applying the limitation on AGI for 2009, a person or legal entity with an average adjusted gross nonfarm income that exceeds $500,000 for the 3 taxable years preceding 2008 (2005-2007) will not be eligible to receive CAP payments. If there is more than one producer on a farm, only the producers on a farm who sign the application will be eligible to receive payment.
• Producers may receive payment from shares of eligible crops on multiple farms if they sign an application for each farm, subject to the $100,000 payment limit that is per person or legal entity, not per farm or per crop.

An application must include the specific application form for CAP, FSA-860, and the following forms, which for most producers will already be on file at the FSA county office: 1) CCC-902, Farm Operating Plan for Individual or Legal Entity; 2) CCC-926, Average Adjusted Gross Income Statement for 2009; 3) AD-1026, Highly Erodible Land Conservation (HELC) and Wetland Conservation Certification; and 4) FSA-578, Report of Acreage, for 2009, which must already be on file at the FSA county office.