The U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA) announced recently that signup for the Quality Loss Adjustment (QLA) Program began Wednesday, January 6, 2021. Funded by the Further Consolidated Appropriations Act of 2020, this new program provides assistance to producers who suffered eligible crop losses due to natural disasters occurring in 2018 and 2019 calendar years. The deadline to apply for QLA is Friday, March 5, 2021.
Eligible Crops
Eligible crops include those for which federal crop insurance or Noninsured Crop Disaster Assistance Program (NAP) coverage is available, except for grazed crop and value loss crops, such as honey, maple sap, aquaculture, floriculture, mushrooms, ginseng root, ornament nursery, Christmas trees, and turfgrass sod.
Additionally, crops that were sold or fed to livestock or that are in storage may be eligible; however, crops that were destroyed before harvest are not eligible. Crop quality losses occurring after harvest, due to deterioration in storage, or that could have been mitigated, are also not eligible.
Assistance is based on a producer’s harvested affected production of an eligible crop, which must have had at least a 5% quality loss reflected through a quality discount; or for forage crops, a nutrient loss, such as total digestible nutrients.
Qualifying Disaster Events
Losses must have been a result of a qualifying disaster event (hurricane, excessive moisture, flood, qualifying drought, tornado, typhoon, volcanic activity, snowstorm, or wildfire) or related condition that occurred in calendar years 2018 and/or 2019.
Assistance is available for eligible producers in counties that received a qualifying Presidential Emergency Disaster Declaration or Secretarial Disaster Designation because of one or more of the qualifying disaster events or related conditions.
Lists of counties with Presidential Emergency Disaster Declaration or Secretarial Disaster Designations for all qualifying disaster events for 2018 and 2019 can be found by visiting: https://www.farmers.gov/recover/whip-plus/eligible-counties. For drought, producers are eligible for QLA if the loss occurred in the area within the county rated by the U.S. Drought Monitor (https://droughtmonitor.unl.edu) as having a D3 (extreme drought) or higher intensity level during 2018 or 2019.
Producers in counties that did not receive a qualifying declaration or designation may still apply but must also provide supporting documentation to establish that the crop was directly affected by a qualifying disaster event.
To determine QLA eligibility and payments, FSA considers the total quality loss caused by all qualifying natural disasters in cases where a crop was impacted by multiple events.
Applying for QLA
When applying, producers are asked to provide verifiable documentation to support claims of quality loss or nutrient loss in the case of forage crops. For crops that have been sold, grading must have been completed within 30 days of harvest, and for forage crops, a laboratory analysis must have been completed within 30 days of harvest.
Some acceptable forms of documentation include sales receipts from buyers, settlement sheets, truck or warehouse scale tickets, written sales contracts, similar records that represent actual and specific quality loss information, and forage tests for nutritional values.
Payments, Calculations and Limitations
QLA payments are based on formulas for the type of crop (forage or non-forage) and loss documentation submitted. Based on this documentation. FSA is calculating payments based on the producer’s own individual loss or based on the county average loss. More information on payments can be found by visiting www.farmers.gov/quality-loss.
FSA will issue payments once the application period ends. If the total amount of calculated QLA payments exceeds available program funding, payments will be prorated.
For each crop year, 2018, 2019, and 2020, the maximum amount that a person or legal entity may receive, directly or indirectly, is $125,000. Payments made to a joint operation (including a general partnership or joint venture) will not exceed $125,000, multiplied by the number or persons and legal entities that comprise the ownership of the joint operation. A person or legal entity is ineligible for QLA payment if the person’s or legal entity’s average Adjusted Gross Income exceeds $900,000, unless at least 75% is derived from farming, ranching or forestry-related activities.
Future Insurance Coverage Requirements
All producers receiving QLA Program payments are required to purchase crop insurance or NAP coverage for the two avail-able crop years at the 60% coverage level or higher. Wildlife and Hurricane Indemnity Program Plus (WHIP+) participants who already met the WHIP+ requirements to purchase crop insurance or NAP coverage are considered to have thereby met the requirement to purchase crop insurance or NAP coverage for QLA. If eligible, QLA participants may meet the insurance purchase requirement by purchasing Whole-Farm Revenue Protection (https://www.rma.usda.gov/en/Policy-and-Procedure/InsurancePlans/Whole-Farm-Revenue-Protection) coverage offered through USDA’s Risk Management Agency.
For More Information
For more information, visit www.farmers.gov/quality-loss, or contact or local USDA Service Center (https://www.farmers.gov/service-center-locator). Producers can also obtain one-on-one support with applications by calling 877-508-8364. If you have any questions, please contact your local FSA Office.
PCG will notify you as more information about the Quality Loss Assistance Program comes available. If you have any questions regarding this new program in the meantime, please contact our office at 806-792-4904.