Indemnity Program Announced

USDA Announces Indemnity Program to Help Farmers Who Depopulated Livestock

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
Connect with Todd:
USDA will begin accepting applications for payments to farmers who lost livestock as a result of the COVID-19 economic shutdown. (USDA logo)

LINCOLN, Neb. (DTN) -- USDA will help farmers who suffered livestock and poultry losses during the COVID-19 shutdown last year, as the agency is providing some financial assistance for the cost of depopulation and disposal of those animals.

USDA announced on Tuesday the launching of the Pandemic Livestock Indemnity Program, which will allow producers to apply for assistance starting on July 20 through Sept. 17. The program is open to producers of swine, chickens and turkeys.

The Consolidated Appropriations Act of 2021 authorized payments to producers for losses. Payments will be based on 80% of the fair market value of the livestock and poultry and for the cost of depopulation and disposal of the animal, USDA said in a news release.

USDA set aside up to $50 million in pandemic assistance funds to provide additional assistance for small hog producers that use the spot market or negotiate prices. Details on additional targeted assistance are expected to be available yet this summer.

USDA requires eligible livestock to have been depopulated from March 1, 2020, through Dec. 26, 2020, because of insufficient processing access from the pandemic. Packers, live poultry dealers and contract growers are not eligible for PLIP, USDA said.

"Throughout the pandemic, we learned very quickly the importance and vulnerability of the supply chain to our food supply," U.S. Secretary of Agriculture Tom Vilsack said in a statement.

"Many livestock producers had to make the unfortunate decision to depopulate their livestock inventory when there simply was no other option."

The previous administration proposed pandemic assistance using flat rates across the industry, USDA said in a news release "which does not take into account the different levels of harm felt by different producers."

USDA said a pork industry analysis points to disruptions in processing capacity that created a situation where small hog producers who sell on the spot market or negotiate prices, "bear a disproportionate share" of losses.

"USDA has examined the difference between the negotiated prices for hogs and the five-year average and documented a significant drop during April through September of 2020 due to the pandemic," USDA said.

Payments will be calculated by multiplying the number of head of eligible livestock or poultry by the payment rate per head, and then subtracting the amount of any payments the eligible livestock or poultry owner has received for disposal of the livestock or poultry under the Natural Resources Conservation Service Environmental Quality Incentives Program or a state program.

USDA said payments also would be reduced by any Coronavirus Food Assistance Program payments paid on the same inventory of depopulated swine.

To be eligible for payments a person or legal entity must have an average adjusted gross income of less than $900,000 for tax years 2016, 2017 and 2018.

Come July 20, eligible livestock and poultry producers can apply for payments by completing the FSA-620, Pandemic Livestock Indemnity Program application, and submitting it to any FSA county office.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

Todd Neeley