- November 3, 2023
- Posted by: Daniel Lefstad
- Category: News
FSA announced that $3.2 billion is now available through the New Emergency Relief Program (ERP) to address natural disasters that occurred during the 2022 crop year. An additional $470 million was allocated specifically for livestock producers. The new program will be implemented in a similar format to the ERP program for 2020 and 2021 but have some major modifications in the payment factor. Like the previous program, a two-track system will be utilized to determine whether a producer qualifies for disaster aid.
Track 1 includes producers with a 2022 MPCI or NAP loss. Producers will automatically receive a pre-filled application from FSA. The payment calculation will use an ERP factor based on the producer’s level of Federal Crop Insurance or NAP coverage to determine the gross payment eligibility, which is the same as the previous ERP program. The gross payments will then be factored down by 75% and further adjusted by a “Progressive Factor”. (see below*).
Track 2 will provide payments for eligible crops through a revenue-based (tax-based) approach. Gross Schedule F income from tax year 2022 or 2023 x ERP factor will be compared to benchmark gross income from 2018 or 2019. If a producer did not generate a Schedule F in those years or the Schedule F income does not corelate to actual revenue, the producer does have the option to use “expected” revenue to determine if a loss occurred. Once the revenues are calculated, gross payments will then be adjusted down by a “Progressive Factor” to determine final payment amounts (see below*)
*The Progressive Factor is the major change to this disaster program. This Progressive Factor has a negative impact for losses. For example, a farmer with a calculated loss of $100,000 in the 2020/2021 ERP program would have received $75,000. For the 2022 ERP program, the same farmer with a $100,000 calculated loss will receive $11,250 after applying the “Progressive Factor.
Progressive Factor calculation for a $100,000 loss:
|Payment Range||“Progressive Payment Factor”||Eligible Payment* from Example|
|Up to $2,000||100%||$2,000|
|$4,001 – $6,000||60%||$1,200|
|$6,001 – $8,000||40%||$800|
Unlike the previous program, USDA is rolling out both Tracks simultaneously for 2022 ERP with FSA currently accepting applications. No deadline has been announced at this time.