What you need to know to receive ERP Payments

What are Emergency Relief Payments?

Emergency Relief Payments (ERP) is financial aid provided to producers who experienced extreme weather conditions that affected their operation. The Disaster Relief Supplemental Appropriations Act provides $3.7 billion in financial assistance for producers impacted by wildfires, droughts, hurricanes, winter storms, and other eligible disasters occurring in the calendar year 2022.

Who is Eligible for ERP Payments

Producers who qualify should automatically be notified by the local FSA office. The local Farm Service Agency (FSA) office will notify those producers who qualify under what they call their two “tracks”.

To qualify for Track 1, producers need to have received a loss indemnity payment in 2022 through their federal crop insurance. To qualify for Track 2, producers need to experience shallow losses, quality losses, or producers who did not have federal crop insurance. Track 2 is for producers who may have had small losses or quality issues that did not result in an indemnity payment through the federal crop insurance program.

What level of drought qualifies for ERP?

Drought will be the most common cause of ERP payments for the 2022 crop year. Producers only qualify for drought ERP payments if the operation is in counties that experienced 8 or more consecutive weeks of excessive drought. Excessive drought is classified as D2 or D3 by the U.S. Drought Monitor. A list of all counties with 8 or more weeks of D2 or D3 drought can be found downloaded here.

How do you receive payment?

Pre-filled applications are sent to the producers who qualify for either Track 1 or Track 2 through the local FSA office. It is your responsibility to complete the rest of the application and return it to FSA. After you return your completed application, payments will be automatically.

Risk Management Agency (RMA) is allowing producers to apply for both Track 1 and Track 2 payments at the same time. If you are not deemed eligible for one of the Tracks, you will only receive a payment for the Track you do qualify for. It is PRM’s recommendation producers apply for both Tracks.

If the producer did not receive a pre-filled application and they think they should qualify or does not want to wait, they can apply at the FSA office. The producer will need to fill out an FSA 523 Form. This is the same form that will be sent pre-filled to qualifying producers.

What are the requirements after receiving payments?

Producers who receive the ERP payments are required to purchase crop insurance or noninsured crop disaster assistance program (NAP) coverage for the next two available crop years.

What will your ERP payment be?

ERP payment calculations are complicated and will be unique to each producer. Use these steps as general guidelines of a range to expect from the program. This is how Track 1 is calculated:

Step 1:

The calculations start with the amount of the total loss indemnity payment the producer received in 2022 for the qualifying event.

Step 2:

Each loss payment is multiplied by the ERP Factor. The ERP Factor is based on the level of federal crop insurance coverage purchased in 2022. The chart below shows the ERP Factors.

Step 3:

The amount is then multiplied by the Progressive Factor. It works very similar to the progressive federal tax bracket. A producer only receives a percent portion of the different brackets. The smaller the payment range the more you receive of the total payment. As the amount increases, that bracket of payment has a lower amount of money paid out.

Track 2 is based on very complicated calculations that are not tied to indemnity payments. See your Risk Management Advisor if you have questions on Track 2.

PRM is Here to Help

The program is designed to be as straightforward as possible for the producers and not require very much work. The Precision Risk Management team is here to help answer any questions you have about your operation. Reach out to your Risk Management Advisor directly or click here. You can also read the Q&A list provided by FSA here to dive deeper yourself.