This post was adapted from the Farm Service Agency’s ERP fact sheet.

Last week, USDA announced that crop producers impacted by natural disasters in 2020 and 2021 will soon begin receiving emergency relief payments through a new $6 billion Emergency Relief Program (ERP). This program was previously referred to as WHIP or WHIP+ (Wildfire and Hurricane Indemnity Program). Below is a summary of what you need to know about the program.

What is ERP?

ERP covers losses to crops, trees, bushes and vines due to qualifying natural disaster events in 2020 and 2021. Qualifying natural disaster events include wildfires, hurricanes, floods, derechos, excessive heat, winter storms, freeze (including a polar vortex), smoke exposure, excessive moisture, qualifying drought, and related conditions.

For ERP eligibility, “related conditions” are damaging weather and adverse natural occurrences that occurred concurrently with and as a direct result of a specified qualifying disaster event. For drought, ERP assistance is available if any area within the county in which the loss occurred was rated by the U.S. Drought Monitor as having a drought intensity of:

• D2 (severe drought) for eight consecutive weeks; or
• D3 (extreme drought) or higher level of drought intensity.

In Minnesota, Rock County is the only one listed for drought related loses in 2020, but the full list of eligible counties for 2021 can be found here.

For impacted producers, FSA will be administering emergency relief to row crop and specialty crop producers through the following two-phased process:

• Phase 1 will leverage existing Federal Crop Insurance or Noninsured Crop Disaster Assistance Program (NAP) data as the basis for calculating initial payments.
• Phase 2 will be intended to fill additional assistance gaps and cover eligible producers who did not participate in existing risk management programs.

How to apply

To simplify the delivery of ERP Phase 1 benefits; FSA will send pre-filled application forms to producers whose crop insurance and NAP data is already on file because they received a crop insurance indemnity or NAP payment. This form includes eligibility requirements, outlines the application process, and provides ERP payment information.

Producers will receive a separate application form for each program year. Receipt of a pre-filled application is not confirmation that a producer is eligible to receive an ERP Phase 1 payment. Producers will need to return completed and signed ERP Phase 1 applications to their local FSA county office.

Check the FSA website to see the list of additional forms that must be on file with the agency.

How Phase 1 payments are calculated

ERP Phase 1 payments for crops covered by crop insurance will be prorated by 75% to ensure that total ERP payments, including payments under ERP Phase 2, do not exceed the available funding. ERP Phase 1 payments for NAP-covered crops will not be prorated due to the significantly smaller NAP portfolio that by its nature only covers smaller acreages and specialty crops that are not covered by crop insurance.

RMA and FSA will calculate ERP Phase 1 payments based on the data on file with the agencies at the time of calculation.

The ERP Phase 1 payment calculation for a crop and unit will depend on the type and level of coverage obtained by the producer. RMA and FSA will calculate each producer’s loss consistent with the loss procedures for the type of coverage purchased but using the ERP factor in place of the coverage level. This calculated amount would then be adjusted by subtracting out the net crop insurance indemnity or NAP payment, which is equal to the producer’s gross crop insurance indemnity or NAP payment already received for those losses minus service fees and premiums.

ERP factor tables can be found below and on the emergency relief website.

Because the amount of loss due to a qualifying disaster event in calendar years 2020 and 2021 cannot be separated from the amount of loss caused by other eligible causes of loss as defined by the applicable crop insurance or NAP policy, the ERP Phase 1 payment will be calculated based on the producer’s loss due to all eligible causes of loss.

Additional info

The payment limitation for ERP Phase 1 is determined by the person’s or legal entity’s average adjusted gross farm income (income from activities related to farming, ranching, or forestry). A person or legal entity, other than a joint venture or general partnership, cannot receive, directly or indirectly, more than $125,000 in payments for specialty crops and $125,000 in payment for all other crops under ERP (for Phase 1 and Phase 2 combined) for a program year if their average adjusted gross (AGI) farm income is less than 75 percent of their average AGI the three taxable years preceding the most immediately preceding complete tax year.

If at least 75% of the person or legal entity’s average AGI is derived from farming, ranching, or forestry related activities and the participant provides the required certification and documentation, as discussed below, the person or legal entity, other than a joint venture or general partnership, is eligible to receive, directly or indirectly, up to:

• $900,000 for each program year for specialty crops; and
• $250,000 for each program year for all other crops.

The relevant tax years for establishing a producer’s AGI and percentage derived from farming, ranching, or forestry related activities are:

• 2016, 2017, and 2018 for program year 2020;
• 2017, 2018, and 2019 for program year 2021; and
• 2018, 2019, and 2020 for program year 2022.

To request the increased payment limitation, participants must file form FSA-510 complete with participant’s certification their average adjusted gross farm income is at least 75% of their average AGI and a certification from a Licensed Certified Public Accountant (CPA) or Attorney that the participant meets the requirements. To learn more, visit the Payment Eligibility and Payment Limitations website.

Future insurance coverage requirements

All producers who receive ERP Phase 1 payments, including those receiving a payment based on tree, bush, or vine crop insurance policies, are statutorily required to purchase crop insurance, or NAP coverage where crop insurance is not available, for the next two available crop years, as determined by USDA.

Participants must obtain crop insurance or NAP, as may be applicable:

• At a coverage level equal to or greater than 60% for insurable crops; or
• At the catastrophic level or higher for NAP crops.

Coverage requirements will be determined from the date a producer receives an ERP payment and may vary depending on the timing and availability of crop insurance or NAP for a producer’s particular crops. The final crop year to purchase crop insurance or NAP coverage to meet the second year of coverage for this requirement is the 2026 crop year.

Emergency Relief – Phase 2 (Crop and Livestock Producers)

The second phase of both crop (ERP) and livestock (ELRP) programs will fill gaps and cover producers who did not participate in or receive payments through the existing programs that are being leveraged for Phase 1 implementation. All ERP information and resources will be updated on the emergency relief website as Phase 2 policies and provisions are available.