USDA announced last week that additional funds have been made available for the Emergency Relief Program phase 1 (ERP 1) that was implemented to compensate producers for losses due to eligible disaster conditions during 2020 and 2021.
ERP 1, implemented in the summer of 2022, was from funding appropriated September 2021 in the continuing resolution to keep the federal government open as the 2021 FY ended without a FY 2022 budget. The first phase of ERP was additional payment for producers that received a crop insurance indemnity payment in either 2020 or 2021. USDA announced it eight months after the funds were appropriated by Congress and five months into calendar year 2022.
ERP 1 had a sign-up that started June 2, 2022, and ended in August 2022. At that time, a 75% payment factor was announced due to a shortage of funds, based on what was appropriated by Congress in September 2021 versus what was needed to cover the applications likely to be received. All were based on crop insurance indemnities already paid in 2020 and 2021.
Well, here in calendar year 2024, USDA has determined that after holding an amount back for certain things, there is enough funding left to increase the factor from 75% to 78.5%.
So, additional ERP 1 payments were queued up last week and released by FSA office all over the nation for the additional 3.5% due. Not a lot of increase, but an increase, so 133 payments were released last week for the increase in 2020 and 2021 Emergency Relief Program benefits received by eligible local producers.
What do ineligible producers who did not receive any 2020 or 2021 crop insurance indemnity payments get? Well, nothing. Most producers in that group that did not receive any 2020 or 2021 ERP 1 benefits also did not receive any 2020 or 2021 ERP 2 benefits in the summer of 2023.
Additional benefits under both ERP 1 and ERP 2 were received by socially disadvantaged producers — 15% more than any producers that did not meet the definition of SDA. That was a new wrinkle tossed in by the current administration. Also, it was the first time in the history of USDA FSA that it was done that way.
Well, all that was discussed a few weeks ago in a series of articles. However, when those articles were written, there had been no mention of additional ERP 1 payments. It was a major deviation from all past USDA disaster programs — not only the additional benefits, but the reliance on crop losses already paid by crop insurance in 2020 and 2021 as the basis for all disaster benefits.
Yes, it is calendar 2024, and the benefits are for losses in 2020 and 2021. USDA has another disaster program for 2022 disaster losses, calculated about the same way, that were administered last fall. Those funds were provided in the budget continuing resolution to keep the government running in December 2022.
There seems to be a pattern here on funding, and a new way of distributing those funds provided by Congress.
In the meantime, if you received additional ERP 1 payments this week, please enjoy, as not all producers with losses got help.
