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Analysis of USDA’s Announced 2023 ERP Funding

USDA recently announced disaster-related funding for events that occurred in 2022 through the Emergency Relief Program.

American Farm Bureau Federation Economist Danny Munch explains more saying “The new ERP program is a continuation of the previous ERP which covered qualifying losses from 2021 and 2020. This new one will add an additional $3.74 billion in ad hoc assistance for disasters that occurred in 2022.”

The application process includes two separate tracks for farmers.

“Track one is going to be for farmers who already have had an active crop insurance plan in 2022, or an active NAP plan in 2022,” according to Munch. “So, those folks will receive a prefilled application with their information. Just because you receive a prefilled application doesn’t mean you’ll get payments, you still have to qualify. Track two will cover all other folks, and that’s going to use a benchmark revenue from your farm and compare it to your disaster year, either from your tax returns or an expected revenue.”

However, the payment formula, Munch says, may be problematic for many farmers.

“It looks at your original coverage level and your crop insurance plan and it bumps it up,” according to Munch. “So, for instance, if you had a 55 percent coverage level, now you have 80. The new piece is, it takes that base payment and then it uses what’s called progressive factoring, where the first $2,000, you’ll get to keep all of that. The next $2,000 is decreased by 20 percent and the next 40 percent. Once you get over $10,000, everything after that is reduced by 90 percent, and that’s a big impact because a lot of farmers that face disasters have losses a much higher than $10,000.”

For more information, contact your local Farm Service Agency office.

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