Quality Loss Adjustment Program

Eligible Crops

Crops that can be covered by federal crop insurance or the Noninsured Crop Disaster Assistance Program (NAP) are generally considered eligible for QLA, excluding the below crops deemed ineligible.

To be eligible for the program, a crop 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.

Ineligible Crops

Crops that were destroyed before harvest are not eligible for QLA.

The following crops are also ineligible:

• grazed crops,
• honey,
• maple sap,
• aquaculture,
• floriculture,
• mushrooms, ginseng root,
• ornamental nursery,
• sea grass and sea oats,
• Christmas trees, and
• turfgrass sod.

Eligible producers include individuals or legal entities who are:

• entitled to an ownership share and
• at-risk in the agricultural production and marketing of crops on the farm.

To be eligible for payments, a person or legal entity must either:

• have an average 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.

Persons and legal entities also must:

• have control of the crop acreage on which the commodity 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.

Assistance through QLA is available for eligible crops that suffered quality loss due to one or more of the following disaster events. The disaster event must have occurred in calendar year 2018 or 2019.

• Tornado
• Typhoon
• Volcanic activity
• Snowstorm
• Wildfire
• Hurricane
• Flood
• Excessive moisture
• Qualifying drought

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.

Generally, the crop quality loss 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 condition caused by these events.

Producers in counties that did not receive a qualifying disaster declaration or designation may still 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.

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 shown below.

Forage Crops with Documentation of Nutrient Factors for Affected Production and Historical Nutrient Factors

For forage crops with verifiable documentation of nutrient factors for the affected production for the year of application and the three preceding crop years, the following payment equation will be used.

QLA Payment = Total Affected Production x Verifiable % Loss x Average Market Price x 0.7

The average market price is determined by USDA’s Farm Service Agency, and the producer’s verifiable percentage of loss is determined by comparing the nutrient factor test results for the affected production to the average from the three preceding crop years.

Forage Crops with Documentation of Nutrient Factors for Affected Production Without Historical Nutrient Factors

For forage crops with verifiable documentation of nutrient factors for the affected production for the year of application but no historical nutrient factors for the three preceding crop years, the following payment equation will be used.

QLA Payment = Total Affected Production x County Average % Loss x Average Market Price x 0.7 x 0.5

The average market price is determined by USDA’s Farm Service Agency.

Non-Forage Crops with Documentation of Grading Factors Due to Quality and Dollar Value Loss Due to Quality

For non-forage crops with verifiable documentation of grading factors and the total dollar value loss due to quality, the following payment equation will be used.

QLA Payment = Total Dollar Value Loss on Affected Production x 0.7

Non-Forage Crops Without Dollar Value Loss Due to Quality but With Documentation of Grading Factors Due to Quality

For non-forage crops without verifiable documentation of the total dollar value loss, but with verifiable documentation of grading factors, the following payment equation will be used:

QLA Payment = Total Affected Production x County Average Loss Per Unit of Measure x 0.7 x 0.5

To determine the county average percentage of loss for forage crops or the county average loss per unit of measure for non-forage crops, FSA will calculate the average loss for a crop based on the losses of producers applying with verifiable documentation of historical nutritional factors for forage crops, or the total dollar value loss for non-forage crops if at least five eligible producers in the county submitted that documentation.

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.

QLA payments will not begin to be issued to producers until after the application period ends on April 9. This will enable FSA to calculate county averages and the total scope of QLA payments requested.

If the total amount of needed QLA payments exceeds the amount of funding available, FSA will prorate payments to 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.

All producers receiving QLA payments are required to purchase federal crop insurance or 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.

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:

• 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.

Producers can download, fill out, and submit the below forms to the FSA office at their local USDA Service Center. 

A complete QLA application will include:

• FSA-898, Quality Loss Adjustment Program Application
  • Download FSA-898 and Instructions
  • Download FSA-898 Continuation Sheet and Instructions
  • Download this QLA Calculator Worksheet (spreadsheet), a tool to help summarize quality affected production to be entered on FSA-898 (Not required)
• 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.
  • Download FSA-899 and Instructions
  • Download FSA-899 Continuation Sheet and Instructions
• FSA–895, Crop Insurance and/or NAP Coverage Agreement
  • Download FSA-895 and Instructions
• FSA-578, Report of Acreage
• Verifiable documentation of the quality loss

Producers with an eAuthentication account can apply for QLA via our QLA Application Portal. Applications are completed, electronically signed, and submitted directly to your local Service Center through this online system. Producers interested in creating an eAuthentication account should visit farmers.gov/sign-in to learn more.

Note: Online applications cannot be created for entities such as corporations, limited partnerships, limited liability companies, trusts, or estates via the QLA Application Portal. QLA applications for these business types should be initiated by contacting your local USDA Service Center or the call center at 877-508-8364.

The below forms must be submitted for each crop year within 60 days of the date you sign the QLA application. If you are an existing customer with FSA, this information may already be on file at your local USDA Service Center. In addition, our staff will work with you to complete portions of the CCC-902 – Farm Operating Plan – if necessary.

• AD–1026, Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC) Certification
• CCC-901, Members Information (if applicable) Note: CCC-901 identifies members of a farm or ranch that is a legal entity. This form will be completed by legal entities and joint operations.
• 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)

QLA payments will not be made until all necessary eligibility documentation is received by the FSA office at your local USDA Service Center.

In addition to application materials, producers must submit dated documentation showing quality loss and quantity of affected production.

Examples of acceptable documentation include:

• sales receipts from buyers,
• settlement sheets,
• truck or warehouse scale tickets,
• written sales contracts,
• records that represent actual and specific quality loss information, and
• forage tests for nutritional values.

Verifiable documentation for grain crops that were sold may come from any time between harvest and sale of the affected production, unless the FSA county committee determines the record is not representative of the condition within 30 days of harvest. For all other crops, verifiable documentation must come from tests or analyses completed within 30 days of harvest, unless the FSA county committee determines that the record is representative of the condition of the affected production at time of harvest.

For forage crops, producers must submit verifiable documentation showing the nutritional value for the affected production. Producers must also submit verifiable documentation of the historical nutritional value for the three preceding crop years, if available.

For non-forage crops, producers must submit verifiable documentation of the total dollar value loss due to quality, if available, and verifiable documentation of grading factors due to quality.

If requested by FSA, an applicant must provide documentation that establishes the quality loss and applicant's ownership share and value at-risk in the crop.

Visit farmers.gov/quality-loss/faq for answers to common QLA questions. These FAQs were last updated on January 8, 2021.

Our Quality Loss Adjustment Program fact sheet provides up-to-date program information to support your application. 

Stakeholder Toolkit

USDA encourages producers and agricultural groups to share information with those in their network. Our QLA Stakeholder Toolkit includes key talking points, a newsletter article, and suggested social media posts intended to raise awareness around this program. This toolkit was last updated on January 5, 2021.

Public Service Announcement

USDA recorded a 60-second public service announcement on the Quality Loss Adjustment Program. Download the audio file and script.

Webinar Recording

USDA recorded a Quality Loss Adjustment webinar that occurred on January 22, 2021.

The below resources provide more information on QLA.

Rule

Agricultural Disaster Indemnity Programs Rule – Posted January 5, 2021

Cost-Benefit Analysis

QLA Cost-Benefit Analysis – Posted January 5, 2021