Hey there! If you’re a farmer or agricultural producer who faced some tough times in 2022 due to natural disasters, I’ve got some good news for you. The USDA has rolled out a program called Emergency Relief Program (ERP) 2022 to help folks like you recover from crop losses and other damages. Today, we’re going to dive into Track 2 of this program, which offers a unique revenue-based approach to disaster assistance.
You might be wondering, “What exactly is ERP 2022 Track 2?” Well, it’s designed to fill in the gaps left by other assistance programs. If you suffered losses that weren’t fully covered by crop insurance or NAP (Noninsured Crop Disaster Assistance Program) payments, Track 2 could be your ticket to additional support[1].
Who Can Apply for Track 2?
Now, you might be asking yourself if you’re eligible for this program. The good news is that Track 2 casts a pretty wide net. You can apply if you’re a U.S. citizen, a resident alien (which the USDA calls a “lawful alien”), or even a partnership or corporation organized under state law. Tribal organizations are welcome to apply too[11].
But here’s the key thing: you need to have suffered a loss in revenue during the 2022 calendar year due to a qualifying disaster event. These events include wildfires, hurricanes, floods, derechos, excessive heat, tornadoes, winter storms, freezes, smoke exposure, excessive moisture, qualifying drought, and related conditions[11].
How Track 2 Differs from Track 1
You might be familiar with Track 1 of the ERP 2022 program, which was designed to get assistance out quickly to producers who received crop insurance indemnities or NAP payments. Track 2, on the other hand, takes a different approach[10].
Instead of relying on pre-existing insurance data, Track 2 looks at your overall revenue picture. It compares your disaster year revenue to a benchmark year to determine your losses. This approach can be especially helpful if you had what’s called a “shallow loss” – a loss that wasn’t big enough to trigger an insurance payout but still impacted your bottom line[10].
The Application Process
Alright, let’s talk about how you can actually apply for this assistance. Unlike Track 1, there are no pre-built applications sent by mail for Track 2. You’ll need to take a more hands-on approach[10].
To apply, you’ll need to fill out two forms: FSA-524 and FSA-525. The FSA-524 is where you’ll certify your benchmark year revenue and your disaster year revenue. Don’t worry if that sounds complicated – there’s an appendix that guides you through what should be included as applicable revenue[11].
The FSA-525 form is a Crop Insurance and/or NAP Coverage Agreement. You’ll need to submit both of these forms to your local USDA Service Center by the application deadline to have a complete application on file[11].
Choosing Your Revenue Option
One of the cool things about Track 2 is that it gives you some flexibility in how you determine your revenue. You can choose between a tax year option or an expected revenue option[10].
The tax year option might be a good choice if your tax returns accurately reflect your normal year’s revenue. But if your tax returns don’t tell the whole story – maybe because you use some crops within your operation instead of selling them – the expected revenue option could be a better fit[10].
For example, if you grow crops that you feed directly to your livestock instead of selling, the expected revenue option allows you to establish a value for those crops for the purpose of the ERP application[10].
Important Certifications
When you’re applying for Track 2, you’ll need to make a few important certifications. First, you’ll need to certify the percentage of your disaster year revenue that came from specialty and high-value crops combined, and the percentage that came from other crops[11].
You’ll also need to certify whether all your eligible crop acreage was covered by Federal crop insurance or NAP during the growing season. This information helps determine your ERP factor, which affects your payment calculation[11].
It’s crucial to be accurate with these certifications. If the FSA requests documentation to support your certifications, you’ll need to provide it within 30 calendar days, or you could be considered ineligible for Track 2[11].
Payment Limitations and Calculations
Now, let’s talk about the money. The ERP has some payment limitations you should be aware of. For specialty or high-value crops, the payment limit is $900,000 per person or legal entity. For all other crops, it’s $250,000 per person or legal entity[11].
The way your payment is calculated depends on a few factors. The FSA will look at the difference between your benchmark year revenue and your disaster year revenue. They’ll also consider any payments you might have received under Track 1 to avoid duplication of benefits[10].
Your payment will also be adjusted based on your level of coverage. If you had crop insurance or NAP coverage for all your eligible crops, you’ll receive a higher percentage of your calculated loss than if you didn’t have full coverage[11].
The Importance of Risk Management
One of the goals of the ERP 2022 program is to encourage producers to participate in crop insurance or NAP coverage. That’s why there’s a linkage requirement for future years[11].
If you receive a Track 2 payment for a crop, you’ll be required to purchase crop insurance or NAP coverage for that crop for the next two available crop years. The level of coverage required depends on whether the crop is insurable or NAP-eligible[11].
This requirement is designed to help you better manage risk in the future. By participating in these programs, you’ll have a safety net in place if disaster strikes again.
Getting Help with Your Application
Feeling a bit overwhelmed? Don’t worry, you’re not alone. The ERP 2022 Track 2 application process can be complex, especially if you’re new to these types of programs. But help is available!
Your local USDA Service Center is a great resource. The staff there can answer your questions about the program, help you understand which revenue option might be best for your situation, and guide you through the application process[10].
You can also find a wealth of information online. The USDA’s Farm Service Agency (FSA) website has fact sheets, frequently asked questions, and other resources to help you navigate the program[11].
Conclusion
ERP 2022 Track 2 represents a significant opportunity for producers who suffered losses due to natural disasters in 2022. By taking a revenue-based approach, it offers a more flexible and comprehensive form of assistance than traditional crop insurance or disaster programs.
Remember, the key to success with this program is understanding your options, accurately certifying your revenue information, and meeting all the program requirements. Don’t hesitate to reach out for help if you need it – that’s what the USDA Service Centers are there for!
So, if you think you might be eligible for ERP 2022 Track 2, take the time to explore this opportunity. It could make a real difference in helping your operation recover from last year’s challenges and prepare for a more resilient future.
