The letter notes that Congress authorized $3.7 billion for 2022 ERP and expressed significant concerns with how FSA is implementing 2022 ERP as follows:
Progressive Payment Factor - This factor penalizes farmers who faced the largest losses in 2022. For example, a farmer who faced a loss of $50,000 might end up with a payment of $7,500 while a farmer who faced a $10,000 loss would net $4,500. The intent of Congress was no progressive payment factor.
Crop Insurance Reimbursements - Another major change was that only underserved farmers would receive reimbursement of crop insurance premiums and fees with no progressive payment factor applied. This substantially penalizes all other farmers and again, they indicate this is not the intent of Congress. For example an underserved farmer with a $50,000 loss and $50,000 of crop insurance premiums would receive a total payment of $43,125 while all other farmers would only get $7,500 (after applying progressive payment factors and the final 25% discount).
Will this letter be enough to get FSA to change how they implement the program. It is too soon to tell, but we will keep you posted.
