Q: Who is eligible to participate in the Quality Loss Adjustment (QLA) Program?
A: Individuals and legal entities are eligible for QLA if they are entitled to an ownership share of the crop produced and are at risk in the agricultural production and marketing of crops on the farm.
Producers growing eligible crops under contract for crop owners are not eligible for QLA unless the grower is also determined to have an ownership share of the crop and associated risk.
Producers must also:
- either have an average federal tax adjusted gross income (AGI) of less than $900,000 for tax years 2018 and 2019; or derive at least 75 percent of their AGI from farming, ranching, or forestry-related activities;
- have control of the acreage on which the crop was grown at the time of the disaster;
- comply with the provisions of the “Highly Erodible Land and Wetland Conservation” regulations, often called the conservation compliance provisions;
- not have a controlled substance violation; and
- be a citizen of the United States or a resident alien. All entities consisting of more than one person must solely include United States citizens or resident aliens.
Q: I haven’t participated in any other USDA programs. Can I still apply for QLA?
A: Yes. Participation in other USDA programs is not a prerequisite.
Q: Is there an Adjusted Gross Income (AGI) limit to participate in QLA?
A: Yes. To be eligible to receive payment, a person’s or legal entity’s average AGI cannot exceed $900,000 for the 2018 and 2019 tax years. However, producers with AGI exceeding the limit may be eligible for QLA if 75 percent or more of their total AGI comes from farming, ranching, or forestry-related activities.
Q: Who must fill out forms to certify average AGI and Farm AGI?
A: Forms CCC-941 and, when applicable, CCC-942, are used for certifying average AGI and Farm AGI and are required to be filed by the applicant. The individual or a legal entity applying for QLA must provide information on all members, stockholders, or partners at or above the fourth level of ownership in the business structure.
Visit farmers.gov/quality-loss to download these forms and learn more about applying for QLA.
Q: Do the Farm Bill’s conservation compliance requirements apply to QLA?
A: Yes. Producers participating in QLA must be in compliance with the highly erodible land conservation and wetland conservation provisions at 7 CFR Part 12. Producers must agree, by certifying Form AD-1026, that they will not produce an agricultural commodity on highly erodible land without a conservation plan, plant an agricultural commodity on a converted wetland, or convert a wetland to make the production of an agricultural commodity possible.
Q: Is there a crop insurance or risk management requirement that must be met for QLA eligibility?
A: Yes. All producers receiving QLA payments must purchase federal crop insurance or Noninsured Crop Disaster Assistance Program (NAP) coverage for the next two available crop years at the 60% coverage level or higher in the county for which the producer was issued a QLA payment.
The latest year for meeting compliance with this provision will be the 2023 crop year. Producers who do not meet this requirement become ineligible for the program and must refund all QLA payments. Producers who received a QLA payment but do not plant that crop in a subsequent year are not subject to the crop insurance or NAP purchase requirement.
Wildlife and Hurricane Indemnity Program Plus (WHIP+) participants who already met the WHIP+ requirement to purchase crop insurance or NAP coverage are considered to have thereby met the requirement to purchase crop insurance or NAP coverage for QLA.
QLA participants who exceed the average AGI limitation of $900,000 for NAP may meet the insurance purchase requirement by either purchasing Whole-Farm Revenue Protection coverage offered through USDA’s Risk Management Agency or paying the NAP service fee and premium even though the participant will not be eligible to receive a NAP payment due to the average AGI limit.
Crop and Disaster Year Eligibility
Q: What crops are eligible for QLA?
A: Crops that can be covered by federal crop insurance or the Noninsured Crop Disaster Assistance Program (NAP) are generally considered eligible for QLA, excluding those specifically deemed ineligible.
Eligible crops must have suffered a quality loss due to a qualifying disaster event and had a five-percent-or-greater quality discount due to the qualifying disaster event.
Eligible crops may have been sold, fed on-farm to livestock, or may be in storage at the time of application.
Q: What crops or commodities are ineligible for QLA?
A: Crops that were destroyed before harvest are not eligible for QLA, even if they suffered a quality loss. Quality losses due to disaster events occurring after a crop was harvested, due to crop deterioration while in storage, or that could have been mitigated using good farming practices are also not eligible.
Grazed crops, honey, maple sap, aquaculture, floriculture, mushrooms, ginseng root, ornamental nursery, sea grass and sea oats, Christmas trees, and turfgrass sod are also ineligible for the program.
Q: Is tobacco eligible for QLA?
A: To be eligible, the specific type of tobacco must be insurable by federal crop insurance in the county it’s grown in.
Q: What disaster events qualify for QLA?
A: QLA is for eligible crops that suffered quality loss due to qualifying tornado, typhoon, volcanic activity, snowstorm, wildfire, hurricane, flood, excessive moisture, and/or qualifying drought. The disaster event must have occurred in calendar year 2018 or 2019.
The crop quality loss generally must have occurred in a county that received a qualifying Presidential Emergency Disaster Declaration or Secretarial Disaster Designation because of one or more of these qualifying disaster events or a related condition. For drought, producers are considered eligible if the loss occurred in an area within a county rated by the U.S. Drought Monitor as having a D3 (extreme drought) or higher intensity level during 2018 or 2019.
Producers in counties that did not receive a qualifying disaster declaration or designation may apply for QLA with supporting documentation showing that the crop quality loss was directly affected by a qualifying event. For example, supporting documentation might include weather data from a reputable source.
Q: What is the difference between excessive moisture and flood events?
A: Flooding is the temporary inundation of an area with water and is caused by overflowing waterbodies, runoff from adjacent slopes, or tides. Under steady rain events, for instance, producers could experience excessive moisture that contributes to quality loss of crops without experiencing a flood.
Q: I did not harvest my crop that suffered a quality loss. Am I eligible for QLA?
A: No. Crops that were not harvested, including those that were destroyed before harvest, are not eligible for QLA.
If crop quantity was reduced to zero because of quality, it is considered a quantity loss and was eligible for the Wildlife and Hurricane Indemnity Program Plus. It is not eligible for quality loss under QLA.
Q: My crops suffered a five-percent-or-greater quality loss resulting from pests and/or disease. Am I eligible for QLA?
A: No. The QLA program does not cover quality loss due to pest/insect infestation or disease.
Q: I grew an eligible forage crop that was impacted by an eligible natural disaster event, but I do not have documentation of the nutrient factors for the affected crop production. Do I still qualify for QLA?
A: No. While you can apply for QLA with or without historical nutrient factors documented, you must provide documentation of nutrient factors of affected production for all eligible forage crops to qualify for the program.
Q: I grew an eligible non-forage crop that was impacted by an eligible natural disaster event, but I do not have documentation of dollar value lost or grading factors impacted by quality. Do I still qualify for QLA?
A: No. Producers must submit verifiable documentation of total dollar value loss due to quality or grading factors due to quality to qualify for the program.
Q: When does the QLA application period start and end?
A: The QLA signup period opens on January 6, 2021 and closes on March 5, 2021.
Q: How do I apply for QLA?
A: USDA’s Farm Service Agency will accept QLA applications from January 6 through March 5, 2021. To apply, producers must submit a completed program application along with supporting documentation as outlined under the Apply for the Quality Loss Adjustment Program section on farmers.gov/quality-loss.
Q: Do all producers need to apply for QLA through USDA’s Farm Service Agency?
A: Yes. Eligible producers may apply for QLA on or after January 6 through the Farm Service Agency office at their local USDA Service Center or via FSA’s QLA Application Portal. Producers can locate their USDA Service Center, download the application forms or access the application portal, and find additional information about applying at farmers.gov/quality-loss.
Q: What documents will I need for my QLA application?
A: A complete QLA application will include the below forms, which can be downloaded at farmers.gov/quality-loss once the application period opens:
- FSA-898, Quality Loss Adjustment Program Application
- FSA-899, Historical Nutritional Value Weighted Average Worksheet (if applicable) Note: FSA-899 is applicable for forage crops with verifiable documentation of historical nutrient factors from the three preceding crop years.
- FSA-578, Report of Acreage
- FSA-895, Crop Insurance and/or NAP Coverage Agreement
- Verifiable documentation of the quality loss
Additionally, the following forms will be needed to finalize your QLA application and must be submitted for each crop year within 60 days of the date you sign the application. If you are an existing customer with FSA, this information may already be on file at your local USDA Service Center.
- AD–1026, Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC) Certification
- CCC–902, Farm Operating Plan for Payment Eligibility
- CCC-941 Average Adjusted Gross Income (AGI) Certification and Consent to Disclosure of Tax Information
- CCC-942 Certification of Income from Farming, Ranching and Forestry Operations (if applicable)
These forms will also be available for download at farmers.gov/quality-loss.
Q: Do I need to submit documentation of my quality loss to qualify for QLA?
A: Yes. In addition to the application materials, producers must submit dated documentation showing quality loss and quantity of affected production.
Documentation of quality loss – which may include total dollar value loss, grading factors, and/or nutrient factors – must be verifiable by FSA through an independent source. Examples of acceptable documentation include sales receipts from buyers, settlement sheets, truck or warehouse scale tickets, written sales contracts, similar records that represent actual and specific quality loss information, and forage tests for nutritional values.
Learn more about verifiable documentation specific to the crops you raise at farmers.gov/quality-loss.
Q: I do not have documentation of my quality loss. Do I still qualify for QLA?
A: No. Producers who do not have acceptable, verifiable documentation are not eligible for QLA.
Q: My local USDA Service Center is not open for walk-in service. How do I apply for QLA?
A: Please call the FSA office at your local USDA Service Center to schedule an appointment if you’d like assistance or have questions about applying for QLA. You can check the status of your local USDA Service Center at farmers.gov/coronavirus/service-center-status.
A call center is available for producers who would like additional one-on-one support with the QLA application process. Please call 877-508-8364 to speak directly with a USDA employee ready to help. The call center can provide service to non-English speaking customers. Customers will select 1 for English and 2 for Spanish. For other languages, customers select 1 and indicate their language to the call center staff.
Q: Are QLA funds part of a loan that must be repaid? Is there a fee to apply?
A: No. QLA is not a loan program and there is no cost to apply.
Q: When are QLA payments expected to begin?
A: Producers will receive QLA payments after the application period closes on March 5. This will allow FSA time to determine county average losses and the total payments requested following the application period.
Q: What are the payment limits for QLA?
A: For each crop year, 2018 and/or 2019, the maximum payment that a person or legal entity may receive, directly or indirectly, is $125,000.
Payments made to a joint operation, including a general partnership or joint venture, will not exceed the total of $125,000 multiplied by the number of persons and legal entities included in the ownership of the joint operation.
Q: Can QLA payments be withheld to satisfy a debt?
A: No, QLA payments will not be subject to administrative offset. This means that payments will not be withheld to satisfy any USDA debts, nor will they be offset by the Treasury.
Funding and Payment Calculations
Q: What is the funding source for QLA?
A: This program has several funding sources as outlined in the Agricultural Disaster Indemnity Programs Rule published under Quality Loss Adjustment Program Resources on farmers.gov/quality-loss.
Q: How much funding is available for crop producers who suffered quality losses through this program?
A: USDA estimates the Further Consolidated Appropriations Act, 2020 will provide approximately $950 million for the continuation of disaster assistance program delivery, including payments to eligible producers for production losses due to excessive moisture and extreme drought under WHIP+ and for quality losses covered by the QLA Program. Of that amount, USDA anticipates that an estimated $500 million will be available for QLA Program payments. However, the amount of funding ultimately available for the QLA Program will not be known until other payments, for example for excessive moisture and drought under WHIP+, are finalized.
Q: I was told that my QLA payment may be factored. What does that mean?
A: If the total amount of calculated QLA payments exceeds the amount of funding available, FSA will prorate payments for all producers by a national factor. For example, if the national factor is 75 percent, all producers participating in the program will receive 75 percent of their calculated payment.
Q: How are payments calculated for the crops that are eligible for QLA?
A: QLA payments will be calculated based on the type of crop – forage or non-forage – and the type of documentation submitted by the producer as outlined under the Payment Calculations section on farmers.gov/quality-loss. Pages 8-13 of the Cost-Benefit Analysis offer six examples of payment calculations. This document is available under Quality Loss Adjustment Program Resources on farmers.gov/quality-loss.