Department of Agriculture’s Emergency Relief Program (ERP)

Department of Agriculture’s Emergency Relief Program (ERP)

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December 11, 2023
Department of Agriculture’s Emergency Relief Program (ERP)
The U.S. Department of Agriculture (USDA) administers a
Of the total FY2022 supplemental funds, $7.45 billion was
suite of programs that assists farmers and ranchers with
distributed in Phase 1, and $783.9 million was distributed in
recovering from a natural disaster. Many of these programs
Phase 2 (Figure 1).
are permanently authorized and receive funding from
mandatory sources. Since 2018, Congress has provided
Figure 1. Total ERP Payments by State, Phases 1 and
more than $19 billion in supplemental appropriations to
2, for Losses in CY2020 and CY2021
fund temporary or “ad hoc programs” for losses not covered
under permanent programs.
The language directing the supplemental funds and their
implementation has evolved. Both the Trump and Biden
Administrations have implemented these funds through a
series of ad hoc programs that change in name and
eligibility requirements. Currently, the primary ad hoc
program created to administer this funding is the
Emergency Relief Program (ERP). This In Focus provides
an overview of ERP. Livestock forage related losses
provided through the Emergency Livestock Relief Program
(ELRP), milk loss, and inactive ad hoc programs are not
discussed here. For an overview of all USDA disaster
assistance programs, see CRS Report RS21212,
Agricultural Disaster Assistance.
Supplemental Appropriations
The Disaster Relief Supplemental Appropriations Act of
2022 (P.L. 117-43, Division B, FY2022 supplemental)
provided $10 billion for agricultural production losses in

calendar years (CYs) 2020 and 2021 from qualifying
Source: USDA, Farm Service Agency, “ERP Dashboard.”
natural disaster events, such as droughts, wildfires,
Note: Total reported in nominal dollars and current as of November
hurricanes, floods, tornadoes, excessive heat, and freeze.
13, 2023.
Eligible losses include crops (including on-farm stored
commodities and crops prevented from planting), trees,
ERP 2022: Tracks 1 and 2
bushes, and vines. The Disaster Relief Supplemental
Qualified losses and natural disaster events authorized for
Appropriations Act, 2023 (passed as Division N of the
the FY2023 supplemental funds are nearly identical to those
Consolidated Appropriations Act, 2023, P.L. 117-328,
authorized under the FY2022 supplemental funds. The
FY2023 supplemental), provided $3.7 billion for
majority of the FY2023 supplemental funds are
agricultural losses in CY2022 from qualifying disaster
implemented through a similar version of ERP—referred to
events and losses, similar to those specified in the FY2022
as “ERP 2022”—offered in two tracks.
supplemental.
ERP 2022 Track 1 is calculated using existing crop
ERP: Phases 1 and 2
insurance and NAP data, similar to ERP Phase 1. Payment
FY2022 supplemental funds covered losses occurring in
calculations are based on several factors, including (1) the
CY2020 and CY2021 and were implemented through ERP
level of insurance or NAP coverage originally purchased,
in two phases. ERP Phase 1 used Federal Crop Insurance
(2) an ERP factor, (3) insurance indemnity or payment
Program (crop insurance) and Noninsured Crop Disaster
received, and (4) a progressive payment factor.
Assistance Program (NAP) data as the basis for calculating
payments. ERP Phase 2 covered eligible producers that did
Each producer’s loss, by crop, is calculated consistent with
not participate in crop insurance or NAP. Phase 2 payments
the loss procedures for the type of coverage originally
were based on estimated revenue loss due in whole or in
purchased. An ERP factor is substituted for the original
part to a qualifying natural disaster event. All ERP
coverage level (Table 1), thereby covering a higher
participants that received a payment under Phase 1 or 2
percentage of loss. For example, a producer who originally
were required to purchase a crop insurance or NAP policy
purchased a NAP policy at 65% coverage would have an
for the next two available crop years.
ERP factor of 95%. This calculated amount then would be
adjusted by subtracting the crop insurance indemnity or
NAP payment. For historically underserved producers—
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link to page 2 Department of Agriculture’s Emergency Relief Program (ERP)
including beginning, limited resource, socially
crops per person or legal entity. All participants that
disadvantaged, and veteran farmers and ranchers—the
received a payment under ERP 2022 are required to
premium or administrative fee paid is added to the payment.
purchase a crop insurance or NAP policy for the next two
available crop years.
Table 1. ERP 2022 Factor
Issues for Congress
ERP Factor
Crop Insurance Level
NAP Level
Effectiveness of Permanent Programs
75%
Catastrophic (CAT) coverage
CAT
Following five years of supplemental appropriations to
80%
More than CAT, less than 55%
50%
cover agricultural production loss for natural disasters,
Congress may consider reassessing the effectiveness of the
82.5%
At least 55%, less than 60%
—
permanent disaster assistance programs as well as crop
85%
At least 60%, less than 65%
55%
insurance coverage and NAP. In addition to covering losses
beyond what may be covered by crop insurance and NAP,
87.5%
At least 65%, less than 70%
—
ERP covers losses not covered by other permanent
90%
At least 70%, less than 75%
60%
programs. Congress may explore whether the permanent
disaster assistance programs could or should be expanded to
92.5%
At least 75%, less than 80%
—
cover losses or events not currently covered (e.g., loss of
95%
At least 80%
65%
quality and on-farm storage losses). Also, by covering the
losses of farmers who did not purchase insurance, Congress
Source: USDA, FSA, “ERP 2022 Track 1 Factsheet.”
may consider whether ERP creates a potential disincentive
Note: Under CAT coverage, participating producers can receive a
for future participation in crop insurance or NAP.
payment equal to 55% of the estimated market price of the
commodity on crop losses in excess of 50% of normal yield.
Timing
Ad hoc assistance programs are not permanent and
ERP 2022 Track 1 then applies a progressive factor to all
generally require USDA to issue program requirements
payments calculated based on crop insurance indemnities
upon passage of each new extension or on being amended,
(Table 2). Under the progressive factor, the higher the
which has resulted in payment delays. Recent supplemental
calculated payment, the lower the progressive factor
appropriations included individual provisions targeting
percentage applied. For example, if the estimated ERP
specific losses or events. USDA administers the provisions
payment is $5,000, then the progressive factor is 100% for
through multiple subprograms, which may create
the first $2,000, 80% for the next $2,000, and 60% for the
complexities for implementation and participation. This has
final $1,000, resulting in an adjusted payment of $4,200.
affected the timing of ERP payments and implementation.
Most recently, the FY2023 supplemental was enacted on
Table 2. Progressive Factor Applied to Crop
December 29, 2022, and details on ERP 2022 Tracks 1 and
Insurance-Calculated ERP 2022 Track 1 Payments
2 were announced October 27, 2023, nearly 10 months
Payment Range
Progressive Factor
later. The delay may be due, in part, to USDA’s desire to
close out ERP Phases 1 and 2 before implementing ERP
Up to $2,000
100%
2022.
$2,001 to $4,000
80%
Payment Rates
$4,001 to $6,000
60%
Unlike the permanent agricultural disaster assistance
programs that receive such sums as necessary from
$6,001 to $8,000
40%
mandatory sources, the ad hoc assistance programs receive
$8,001 to $10,000
20%
a finite amount of funding. This funding is required to
cover a diverse set of agricultural losses from different
Over $10,000
10%
natural disasters nationwide. While supplemental
Source: USDA, FSA, “ERP 2022 Track 1 Factsheet.”
appropriations provide some direction regarding payment
rates, discretion is left to USDA to determine payment rates
ERP 2022 Track 2 provides payments based on estimated
and limits. To stay within the limited amount of funding
revenue loss. There are two options for determining
provided, USDA prorates the payments issued. Under ERP
revenue loss—a tax year option and an expected revenue
2022, USDA changed the way payments are calculated and
option. Estimated revenue is limited to 70% of estimated
implemented a progressive factor. Some argue this
losses if no crop insurance or NAP coverage was
calculation disproportionately lowers payments to those
purchased. Track 2 calculations include the progressive
with larger losses. USDA reportedly responded to such
factor and are prorated based on available funds.
concerns stating losses uncovered by existing programs for
CY2022 totaled $12 billion, three times more than the $3.7
Payments under ERP 2022 are limited to $125,000 per
billion provided in the FY2023 supplemental.
person or legal entity if less than 75% of the participant’s
adjusted gross income (AGI) was from farming. If more
Megan Stubbs, Specialist in Agricultural Conservation and
than 75% of the participant’s AGI was from farming, then
Natural Resources Policy
payments are limited to a maximum of $900,000 for
IF12544
specialty and high value crops and $250,000 for all other
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Department of Agriculture’s Emergency Relief Program (ERP)

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