WARNING: There is a lot of snarky commenting in this article. Not the most professional thing I’ve written… Sorry in advance.
The sign-up for the USDA program to help farmers arising from the coronavirus pandemic is called the Coronavirus Food Assistance Program. It has a LOT of moving parts and I’m certainly not going to get into all of them right now. What I’d like to do is to clear up a bit of what producers can expect for their cotton. They may have other crops both speciality and non-specialty but I’m going to focus on cotton for this article.
I think (opinion) this program was written by a newly graduated engineer. There’s a good bit of justification for how they got there but it is so complicated it is beginning to look like a bit of a Rube Goldberg machine (game of MouseTrap?). There are a couple steps and sites you need to be aware of. The first place to go is to www.farmers.gov/cfap . This is the main site for the program and has a lot of general information. On this page you will find the payment calculator and forms. Toward the bottom of this page is the next link. www.farmers.gov/cfap/non-speciality . This site is where you get information for cotton and other typical row-crops.
This page has some Mis-Leading information that has led to a good bit of confusion. It is confusing not only as to how much of a farmers crop is eligible but also how much he/she is going to get paid on that crop.
HOW MUCH OF THE CROP IS ELIGIBLE
Let’s start with how much is eligible. For cotton the producer is going to get paid on approximately 1/2 of the inventory he had unpriced in inventory as of January 15, 2020. The web page discusses things such as the lesser of the total production OR the inventory on hand… There is no way for the inventory to be larger than the total production so it is JUST THE UNPRICED INVENTORY ON HAND January 15th. So it is 1/2 of the unpriced inventory on hand January 15th.
PAYMENT RATE
Next let’s look at the payment rate. There is a table on this page that shows two columns. For upland cotton the total is 19cents per pound. The payment will be 1/2 of this rate. So cotton will be getting 9.5 cents per pound. So to make it as confusing as possible it is a 50% payment rate on 50% of the inventory. This is the maximum that the producer is eligible for.
How much will they get initially?
What will he get? At first his payment will be 80% of what he’s expecting to get paid. This is to make sure there’s enough money to go around so… to summarize… He’ll get 80% of 50% of the 19cents on 50% of his unpriced inventory on January 15??????? YEP THATS RIGHT! If there is enough money, the remaining 20% will be paid at a later date.
Remember this is a SELF CERTIFIED program. The producer will fill out a form and send it to USDA. The fewer questions and interaction the better it will only lead to confusion. I take it on good authority that the payment calculator on USDA’s site is accurate.
The final Link I ask you to follow is the National Cotton Council’s Summary. It can be found HERE. It is a lot less tongue-in-cheek than my smug comments above. It will actually answer some of the questions out there. We know there are more. Please email them to me and we’ll get to them as best we can. I hope I haven’t confused you any more than you already were. Just understand this a farmer self-certified program. There shouldn’t be a need for documentation from the gin or warehouse initially. Read the websites carefully. I hope this helps.
DSF