Spring 2021 Logan County
Farm Outlook Magazine

From start-ups to pandemic relief: a short-course on helpful Ag business acronyms
By Derek Hurley

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[March 23, 2021]  The business world is full of acronyms; short abbreviations that represent a greater idea, but take up less space on a business card. It helps to have a refresher on what some of the acronyms are for the business side of agriculture.

2501 Program

The 2501 Program is another name for the federal “Outreach and Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers Program.” Under this program, individuals are not eligible, but certain groups may get assistance.

According to the USDA, “Higher education institutions, eligible conservation districts, eligible economic development corporations, nonprofit organizations, and non-governmental community-based associations or organizations that provide agricultural education or agriculturally related services to socially disadvantaged or veteran farmers and ranchers in their region are eligible and may apply for a grant.” These groups include African-Americans; indigenous Americans; Asian-Americans; Hispanic-Americans; Pacific Islanders; refugees; and immigrants.
 



AMA

AMA stands for Agricultural Management Assistance. The AMA program educates farmers on financial risk and related topics, such as diversification, marketing or natural resource conservation practices.

According to the USDA, “producers may construct or improve water management structures or irrigation structures; plant trees for windbreaks or to improve water quality; and mitigate risk through production diversification or resource conservation practices, including soil erosion control, integrated pest management, or transition to organic farming.”

AMA is only available in 16 states: Connecticut, Delaware, Hawaii, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont, West Virginia and Wyoming.

ARC and PLC

ARC stands for Agriculture Risk Coverage, and PLC stands for Price Loss Coverage. The two programs are closely related, and they both provide assistance when pricing doesn’t work out in the way an agricultural business plans for.

The ARC program provides income support based specifically on previous years’ base acres (not any current production) of covered products. ARC payments are issued when the actual county crop revenue of a covered commodity is less than the guaranteed crop rate for a given year. PLC program payments are distributed when the actual price of a covered product fails to meet the projected price for that product.



BFRDP

BFRDP stands for Beginning Farmer and Rancher Development Program. This program provides grants to help pay for education, mentoring, and technical assistance initiatives for people just getting started in agribusiness.

BFRDP grants are limited to “state, tribal, local, or regionally-based networks or partnerships, such as an extension service; a governing agency; a community service organization; or a college or university.” These organizations use such grants to educate agricultural students in their respective areas.

CFAP (a new program for the times)

CFAP stands for Coronavirus Food Assistance Program. The CFAP provides financial assistance to farmers dealing with “a five-percent-or-greater price decline,” or who otherwise face losses due to supply disruptions, due to COVID-19.

The CFAP has gone through multiple phases in the last year. Initially, only certain commodities were eligible for assistance. Since then, nearly one hundred different commodities and products have been added to the list of eligible products.

Currently, farmers can apply for assistance as part of the second wave, or CFAP2. The program is currently being evaluated by the new federal administration for possible alterations before any new phases are announced.

EIDL

EIDL stands for Economic Injury Disaster Loans. Because of the pandemic, small business owners, including agricultural businesses, and nonprofit organizations in all states and territories can apply for an Economic Injury Disaster Loan.

Eligibility includes qualified agricultural businesses with 500 or fewer employees. Eligible agricultural businesses are defined as “those businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries.”

FAS

FAS stands for Foreign Agricultural Service. The FAS is a federal agency that deals with overseas programs. These programs include foreign market development, international trade agreements and negotiations, and the collection of statistics and market information. The FAS also administers credit guarantees and food aid programs, and helps increase income and food availability in other countries.

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These are just a small handful of the many, many acronyms and business programs that farmers may have to interact with. For a much more detailed list, see the USDA glossary at https://www.usda.gov/glossary.

MFP

MFP stands for Market Facilitation Program. The MFP helps farmers deal with financial problems when their products are affected by foreign tariffs. Tariffs can often prevent access to traditional export markets. MFP assistance is available for farmers working with non-specialty crops, dairy, hogs, or specialty crops.

Assistance for non-specialty crops (corn, beans, grains, and other common farm crops) is different from one county to the next, and takes overall acreage into account when calculating assistance. Payments are not dependent on which of those crops were planted in previous years, and a producer is only eligible for crops that do not exceed previous plantings.

PPP (pandemic related)

PPP stands for Paycheck Protection Program, and provides loans to help businesses keep their workforce employed during the pandemic. Borrowers may be eligible for PPP loan forgiveness. The PPP loans come in two phases; a “First Draw” for first-time borrowers, and a “Second Draw” for a second loan if necessary.



The PPP has undergone constant change since its initial creation last year. According to the US Small Business Administration, the most recent changes:

“Allow sole proprietors, independent contractors, and self-employed individuals to receive more financial support by revising the PPP’s funding formula for these categories of applicants; eliminate an exclusionary restriction on PPP access for small business owners with prior non-fraud felony convictions, consistent with a bipartisan congressional proposal; eliminate PPP access restrictions on small business owners who have struggled to make student loan payments by eliminating student loan debt delinquency as a disqualifier to participating in the PPP; and ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Number (ITIN) to apply for the PPP.”

WHIP+

WHIP+ stands for Wildlife and Hurricane Indemnity Program Plus, and is an extension of the original WHIP. The WHIP+ program offers financial payments to agricultural producers who lose products due to hurricanes, wildfires, and other qualifying natural disasters. WHIP+ covers losses of crops as a result of disaster events; milk losses due to poor weather; and losses of stored commodities.

 

Sources

Agricultural Management Assistance

ARC/PLC Program

Beginning Farmer and Rancher Development Program (BFRDP)

Coronavirus Food Assistance Program- Additional Assistance

COVID-19 Economic Injury Disaster Loans

Frequently Asked Questions 2501 Program

Market Facilitation Program

Paycheck Protection Program

USDA Foreign Agricultural Service

Wildfire and Hurricane Indemnity Program Plus

 

Read all the articles in our new
2021 Spring Farm Outlook Magazine

Title
CLICK ON TITLES TO GO TO PAGES
Page
Introduction - Farm Outlook Spring 2021 4
What those in agriculture can expect under the Biden administration 7
The ongoing struggle with invasive plants in Central Illinois 13
From start-ups to pandemic relief: a short-course on helpful Ag business acronyms 19
Is beekeeping a potential side crop? 24
The 2021 Planting Season:  No red flags! 30
Solving the biggest upcoming dilemma for mankind 34
Corn and soybean production up in 2020 40
Illinois 2020 county estimates 43

 

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