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Federal Register / Vol. 86, No. 164 / Friday, August 27, 2021 / Rules and Regulations
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crop are less than the full amount that a producer would have expected to receive for marketing the commodity if there was no loss. Giving producers the option to substitute 2018 sales including 2018 crop insurance indemnities and 2018 crop year NAP
and WHIP+ payments for 2019 sales provides additional flexibility to producers who had reduced sales in 2019.
In addition, USDA has determined that producers of grass seed faced continuing market disruptions, low farm-level prices, and significant marketing costs associated with the COVID19 outbreak, similar to producers of commodities that were previously determined to be eligible for CFAP 2 assistance. As a result, USDA is amending the definitions of Ineligible commodities and Sales-based commodities in 9.201 to make grass seed an eligible commodity.
Contract Producers The final rule published on January 19, 2021, added provisions to provide assistance for contract producers and specified that those payments would be issued with remaining funding authorized by the Coronavirus Aid, Relief, and Economic Security Act CARES Act; Pub. L. 116136. Contract producer payments were suspended before any CARES Act funding was used to fund those payments. Subtitle B, section 751, of the CAA specifically directs the Secretary to use not more than $1 billion of the additional funding provided under the CAA to make payments to contract producers of livestock and poultry to cover not more than 80 percent of their revenue losses, as determined by the Secretary of Agriculture, from January 1, 2020, through December 27, 2020. While CAA
uses the term contract grower and the CFAP 2 regulation uses the term contract producer both terms refer to and mean the same people or entities;
this rule uses the term contract producer, for consistency. Payments to contract producers will be funded as authorized by the CAA rather than the CARES Act.
This rule also amends the provisions for contract producers based on additional evaluation of CFAP 2 and stakeholder concerns related to the payment calculation. The previous final rule provided assistance for contract producers of broilers, pullets, layers, chicken eggs, turkeys, hogs, and pigs.
After further review, USDA has determined that contract producers of ducks, geese, pheasants, and quail will also be eligible, including contract producers of eggs of all eligible poultry
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types. In addition to the listed livestock and poultry types, USDA may determine that additional livestock and poultry types are eligible at a later time.
These changes are reflected in a new definition of eligible contract livestock or poultry in 7 CFR 9.201, in which USDA is also clarifying that contract producers of breeding stock of those defined eligible livestock and poultry are eligible for CFAP 2. Contract producers of breeding stock are included because those producers may have suffered a revenue loss for the livestock and poultry, regardless of the livestock owners intended end use of the animals. This rule also amends the definition of producer in 7 CFR 9.201
to specify that the requirement that a producer must be in the business of farming at the time of application does not apply to contract producers because contract producers may have had contracts terminated for reasons outside of their control due to COVID19.
The final rule published on January 19, 2021, specified that payments for contract producers would be based on a comparison of eligible revenue for the periods of January 1, 2019, through December 27, 2019, and January 1, 2020, through December 27, 2020. This rule amends the regulation in 7 CFR 9.202b and 9.203l to allow a contract producer to elect to use eligible revenue from the period of January 1, 2018, through December 27, 2018, in lieu of during that date range in 2019. This change is intended to provide flexibility and make the program more equitable for contract producers who had reduced revenue in 2019 compared to a normal year for their operation.
The payment calculation in the final rule published on January 19, 2021, specified that payments for contract producers would be equal to the eligible revenue received from January 1, 2019, through December 27, 2019, minus the eligible revenue received from January 1, 2020, through December 27, 2020, multiplied by 80 percent. In response to additional review and stakeholder concerns about certain situations when the original calculation would not accurately capture a contract producers loss of eligible revenue due to COVID
19, this rule amends the regulation at 7
CFR 9.203l4 to allow FSA to adjust a contract producers eligible revenue based on information certified by the contract producer on supplemental form AD3117B if a contract producer did not have a full period of revenue from January 1 to December 27 for either 2018 or 2019, or if the contract producer increased their operation size in 2020.
Information required to calculate these adjustments includes a contract
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producers square footage increase to the operation in 2020, or a contract producers production or number of turns for 2018, 2019, or 2020, as applicable.
This rule also provides assistance in 7 CFR 9.202d and 9.203m to producers who were not in operation in 2018 or 2019, who would have been ineligible under the previous final rule.
Assistance for these producers is based on their 2020 eligible revenue and the average revenue loss level, which will be determined by USDA for a geographic area based on the best available data including, but not limited to, losses reported by other contract producers for the same area and type of livestock or poultry as reported in their CFAP 2 applications.
This rule also specifies that payments to contract producers will be calculated separately for the categories of livestock listed in 9.203n. As provided in the previous final rule, payments to contract producers may be factored if total calculated payments exceed the available funding under 7 CFR 9.203o.
Other Changes This rule amends 9.7a to address situations where FSA determines that the applicant intentionally misrepresented either the total amount or producers share of the commodities, acres, sales, or revenue on their application. In those cases, the producers application will be disapproved and the participant must refund the full payment to FSA with interest from the date of disbursement.
This rule also amends 9.7b to specify that the equitable relief provisions of 7
CFR part 718, subpart D, apply to CFAP
determinations.
Notice and Comment, Effective Date, and Exemptions The Administrative Procedure Act APA, 5 U.S.C. 553a2, provides that the notice-and-comment and 30-day delay in the effective date requirements do not apply when the rule involves specified actions, including matters relating to benefits. This rule governs CFAP for payments to certain commodity producers and therefore falls within the benefits exemption.
This rule is exempt from the regulatory analysis requirements of the Regulatory Flexibility Act 5 U.S.C.
601612, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 SBREFA. The requirements for the regulatory flexibility analysis in 5 U.S.C. 603 and 604 are specifically tied to the requirement for a proposed rule by section 553 or any other law; in
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