CFAP 3 Is Coming, Is It Needed?
January 11, 2021
In late December, President Donald Trump signed the COVID-19 aid/Fiscal Year 2021 spending package totaling $2.3 trillion — at least $892 billion for COVID-19 aid and $1.4 trillion for FY 2021, which began Oct. 1.
The ag provisions of the bill include $13 billion allocated to ag programs, including $11.2 billion for CFAP 3 payments, $870 million for a supplemental Dairy Margin Coverage program and a dairy donation program, $300 million to the Commerce Department to aid fisheries, and $20 million per year, or $200 million over 10 years, to address gaps in nutrition research.
The bill authorizes another round of CFAP payments.
Are CFAP 3 payments necessary? In a report, the Congressional Research Service (CRS) raises the question as to whether they are needed. The report, released Dec. 21, openly asks whether most producers really need another round of COVID-19 aid. It notes that most major crop and livestock commodities “have seen their prices increase substantially” since July because of improving market conditions, with the exceptions of beef cattle and dairy.
“If current market conditions were to persist into the first half of 2021, it would appear that price declines would be a possible reason for a new round of CFAP payments for livestock and dairy, but not for row crops,” the CRS report says.
The report asks the following in regard to the new payments:
Have CFAP 2 payments successfully compensated (at least partially) all producers who have experienced unexpected economic costs due to COVID-19 in the second through fourth quarters of 2020?
Have CFAP 2 funds been distributed in a fair manner to every producer and for every commodity that has experienced COVID-19-related costs?
Is there potential for duplication of payments under existing programs?
What is the role for congressional monitoring and oversight of the large sums of taxpayer money that are being spent under a nontraditional authority?
Will additional assistance be needed [late in 2020] or early in 2021?
Will use of this nontraditional authority for such large sums of taxpayer money serve as a recurring template for potential future USDA payments interventions?
In many cases CFAP payments are still needed due to cashflow drain over the past few years, despite the recent surge in prices for some commodities.At press time, our sources say they will come in the next few weeks.
Among other ag items of note within the aid bill, the legislation includes an extension of the current exemption of the Electronic Logging Devices (ELDs) mandate for livestock haulers through Sept. 30, 2021.