USDA initiated sign-ups for the Supplemental Disaster Relief Program at local Farm Service Agency offices a few weeks ago. A total of just over $16 billion will be available for this program, with funding derived from the total of $21 billion in farm disaster assistance funds that were allocated by Congress in December of 2024. The SDRP sign-up process is fairly straightforward and should be quite simple for most eligible farmers; however, there are some questions that have surfaced regarding the program.

The following are some common questions and answers regarding the SDRP payments:

What years are covered by losses resulting in potential SDRP payments ?
SDRP will cover losses from eligible crops for both the 2023 and 2024 crop years. The crop losses will be calculated separately for each year, so eligible producers could receive a payment for each year.

What is the focus of SDRP Stage 1 payments ?
Stage 1 is focusing on farmers with crops in 2023 and 2024 that had a federal crop insurance policy in place, or had crops that were enrolled in the Noninsured Disaster Assistance Program in 2023 and 2024. To qualify for Stage 1, farmers must have received a crop insurance indemnity payment or a NAP payment tied to a qualifying disaster in 2023 or 2024. Qualifying disasters include floods, wildfires, hurricanes, freezes, excessive moisture, heat, and qualifying drought. Eligibility for drought losses is restricted to counties that experienced a drought level of "D3" or higher at in 2023 or 2024, or in counties that were at a "D2" drought level for eight or more consecutive weeks, based on the weekly U.S. Drought Monitor. A county must be listed as drought-eligible on the SDRP website, in order for farmers to qualify for SDRP payments due to drought.

Is a yield loss required for SDRP payment eligibility?
Yes. Producers must exhibit a qualifying yield loss relative to their APH or NAP yield guarantee, based on the type of disaster listed, to qualify for SDRP payments for 2023 or 2024. Due to a substantial decline in the final harvest price for some crops compared to the spring base prices in both 2023 and 2024, it may have been possible for farmers with revenue insurance policies to receive crop insurance indemnity payments without a decline in yield below APH levels.

What is the sign-up procedures for SDRP enrollment at local FSA offices ?
Eligible farmers for Stage 1 of SDRP should have received pre-filled SDRP application form (FSA-526) from their FSA office with the 2023 or 2024 crop insurance or NAP yield data already entered. They will then just need to designate the type of disaster that caused the crop loss, verify the data, complete the application, and sign the form to initiate the SDRP process. SDRP applications must be completely filled out and must be signed by all parties that share in the crop value. Farmers should not make any changes to the data on Form FSA-526 and should report any discrepancies in the data to the FSA office. Farmers will also need to have all other required FSA forms completed, which are typically already on file at their local FSA office.

How is the "Stage 1" SDRP revenue guarantee calculated?

Take the original crop insurance projected revenue (APH yield times the spring price for the crop) times the following established factors, based on the level of crop insurance coverage in 2023 or 2024:

• 80-85% coverage = x.95
• 75-79% coverage = x.925
• 70-74% coverage = x.90
• 65-69% coverage = x.875
• 60-64% coverage = x.80
• CAT coverage = x.75

How are the Stage 1 SDRP payments calculated?
To determine the eligible gross SDRP payment, subtract the actual crop value (final 2024 or 2023 crop insurance yield times the RMA harvest price) and the "net" crop insurance indemnity payment received (gross payment minus the premiums and administrative fees) from the SDRP revenue guarantee. Then multiply the gross SDRP revenue eligibility times a factor of 35 percent (.35) to arrive at the net SDRP payment amount.

Why is there some confusion with SDRP application form?
Line No. 14 0f the SDRP application form (FSA Form-526) lists the "Estimated SDRP Payment"; however, this is the gross SDRP payment eligibility that has not been factored by 35% (.35) for the first payment amount.

How long will it take to receive my SDRP payment?
It should be noted that receiving the Form FSA-526 via mail does not guarantee that a producer will receive a SDRP payment. Once a producer has properly completed their SDRP application form and submitted it to the local FSA office, the application will be reviewed by FSA. Once the application is approved, the SDRP payments will be issued. This process may take one to two months.

What is SDRP Stage 2 and when will sign-up begin?
SDRP Stage 2 will be announced later this summer, probably in early-mid September, and will include assistance for losses from uncovered losses, quality losses, and shallow losses that did not meet the threshold requirements for Stage 1 SDRP payments. The application process for Stage 2 may be a bit more complicated than the relatively easy sign-up process for Stage 1 SDRP payments. This is due to Stage 2 including non-traditional crops and commodities that are normally not covered by crop insurance.

What are payment limits for the SDRP payments?
The payment limit for SDRP payments is $125,000 per eligible individual or entity. This increases to $250,000 if at least 75% of the reported adjusted gross income is derived from eligible farm-related operations, based on a three-year average on Federal tax returns. There are also potential higher payment limits for certain specialty crops. Any SDRP payments received from both Stage 1 and Stage 2 of the program will be added together for payment limit purposes. There will be a separate payment limit for the 2023 and 2024 crop years.

What will the future requirements be for producers that receive SDRP payments?
Farmers who receive SDRP payments will be required to maintain at least 60% federal crop insurance coverage for at least the next two years. The SDRP payments are subject to audit for up to three years after the payments are issued, so producers should maintain all records and documentation for at least three years.

Could there be an additional SDRP payment beyond the initial 35% payment rate?
It is possible that there could be a second smaller SDRP payment later this year, if disaster funds remain after all Stage 1 and Stage 2 applications have been finalized; however, that payment amount will likely be far less than the initial SDRP payment amount.

Why do farmers who had lower levels of crop insurance coverage in 2023 or 2024 potentially receive higher SDRP payments?
A farmer with a crop loss in 2023 or 2024 that had an 85% RP insurance policy likely received a significantly higher crop insurance indemnity payment than a farmer with a similar harvest yield and a 75% RP policy. Because the adjusted crop insurance indemnity payment is subtracted from the SDRP revenue guarantee to determine SDRP payment eligibility, the farmer with the 75% RP policy may get a higher SDRP payment; however, the farmer with the 85% RP policy likely received more total payments for the 2024 crop loss (indemnity payments plus SDRP payments).

Where can farmers get more assistance with the SDRP payments and application process?
USDA has a very comprehensive SDRP website available on potential SDRP payments and the application procedures at: https://www.fsa.usda.gov/resources/programs/supplemental-disaster-relief-program-sdrp

Farmers with questions on the SDRC payments can also contact their FSA office or crop insurance agent.