The Coronavirus Economic Recovery Package allocated $23.5 billion for farmers and ranchers, including $9.5 billion for a new program to provide relief for livestock producers, specialty crops and other commodities.
USDA initially provided $19 billion in assistance for farmers and ranchers hurting from challenging market conditions due to the Coronavirus pandemic through the Coronavirus Food Assistance Program (CFAP). On September 17th, USDA announced that it will implement CFAP 2 which will provide additional resources for farmers and ranchers impacted by the pandemic. Part of the funding will go to help Montana’s cattle producers who have seen a drastic decline in cattle markets during the pandemic. This follows Daines’ request to USDA Secretary Perdue urging action for Montana’s ranchers. Additionally, following Daines’ request, all wheat varieties are now eligible for CFAP payments.
- Frequently Asked Questions: These include recent questions that we have received from producers. They were last updated on August 13, 2020.
- Stakeholder Toolkit: USDA encourages producers and agricultural groups to share information with those in their network. This toolkit includes an article, an infographic, and social media posts.
- CFAP Introductory Webinar: This webinar hosted by USDA’s Farm Service Agency and Agricultural Marketing Service provides basic information on how producers can prepare for the upcoming signup for CFAP.
- CFAP Overview
The Coronavirus Economic Recovery Package also provides additional funds to ensure critical meat and grain inspections continue as well as the continued operations of important agencies like the Farm Service Agency.
Montana farmers and ranchers are also eligible for the Paycheck Protection Program (PPP) which will provide 100% federally guaranteed and forgivable loans (grants) to small businesses who retain their employees or restore employees who were fired after February 15.
Additionally, Montana ag will also now be eligible for the Economic Injury Disaster Loan program. This follows Daines’ efforts where Daines sent a letter to the Small Business Association urging them to grant farms, ranches, and agriculture businesses the opportunity to apply for the EIDL program.
More info about the EIDL program and how to apply can be found HERE.
Frequently Asked Questions on PPP for Ag
Are agricultural producers, farmers, and ranchers eligible for the Small Business Administration’s Paycheck Protection Program (PPP)?
Agricultural producers, farmers, and ranchers with 500 or fewer employees whose principal place of residence is in the United States are eligible.
Farms are eligible if: (i) the farm has 500 or less employees, OR (ii) it fits within the revenue-based sized standard, which is on average annual receipts of $1M.
Additionally, farms can qualify for PPP if it meets SBA’s “alternative size standard.” The “alternative size standard” is currently: (1) a maximum net worth of the business not more than $15 million, AND (2) the average net income Federal income taxes of the business for the two full fiscal years before the date of the application be not more than $5 million.
Are agricultural and other forms of cooperatives eligible for PPP?
As long as other eligibility requirements are met, small agricultural cooperatives may receive PPP loans. Other forms of cooperatives may be eligible provided they comply with all other Loan Program Requirements (as defined in 13 CFR 120.10).
Do H-2A or H-2B workers on my payroll count towards my eligibility and total possible loan amount?
Only employees with a principal place of residence in the U.S. count toward eligibility and calculation of the PPP loan amount.
How do sole proprietor farmers provide accurate documentation regarding payroll, when they may not take a traditional salary?
SBA requires sole proprietors, independent contractors, and other eligible self-employed individuals to provide documentation to its lender that the business was in operation as of February 15, 2020. This documentation may include payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. For borrowers that do not have any such documentation, the borrower must provide other supporting documentation to its lender, such as bank records, sufficient to demonstrate the qualifying payroll amount.
Documentation options for payroll tax filings include the following:
IRS Form 941 (quarterly wages); IRS Form 944 (calendar year wages); State income, payroll and unemployment insurance filings; QuickBooks; bank repository accounts; and/or internally generated profit and loss statements. However:
- Nonprofit organizations must include IRS Form 990;
- Sole proprietors must include IRS Form 1040 Schedule C;
- Any entity that filed IRS Form 1099-MISC must include this form;
- Seasonal employers must document the period beginning February 15, 2019 through June 30, 2019
More extensive FAQs can be found at the Treasury Department’s CARES Act website.
For more information about USDA’s efforts to assist farmers and ranchers during the COVID-19 pandemic and other resources, click here: https://www.usda.gov/coronavirus.