$250,000 Might Really Mean $200,000

May 22, 2020

The Coronavirus Feed Assistance Program (CFAP) allows for payments up to a limit of $250,000 per entity/owner (or $500,000 or $750,000 for limited entities with three active owners).

However, the first initial payment is capped at 80% of the total estimated damages and we now hear that the payment limit will also be capped at 80% on the first payment.  Here is an example:

Assume Farmer Jack qualifies for $350,000 of payments under CFAP.  80% of this number is $280,000 so many farmers would expect Jack to receive the full $250,000.  However, the payment limit is also capped at 80%, so Jack will only receive $200,000 not $250,000.

This 80% payment cap limit also applies to the $500,000 and $750,000 additional payment limit for limited liability entities, therefore, they would be capped at $400,000 and $600,000 in the first initial payment.