By Tom Hance
In the past few weeks, the U.S. Congress and Trump Administration have taken a number of actions to assist farmers in the wake of the COVID-19 pandemic. Initial steps included waiving certain hours of service and CDL trucking restrictions and providing exemptions and streamlining processes for H-2A migrant labor. The U.S. Department of Agriculture’s (USDA’s) Risk Management Agency also announced flexibilities on crop insurance deadlines, enabling producers to send notifications and reports electronically, extending the date for production reports, and providing additional time and deferring interest on premium and other payments.
On March 31, Congress enacted the Coronavirus Aid, Relief and Economic Security (CARES) Act to provide $9.5 billion in emergency response funding to support agricultural producers, particularly livestock, dairy, and specialty crop producers. The CARES Act also replenished the Commodity Credit Corporation borrowing authority by $14 billion. In addition, the USDA received about $425 million in supplemental funding to cover costs for offices and functions. An additional $15.5 billion was provided for the Supplemental Nutrition Assistance Program, $8.8 billion for Child Nutrition Programs and $450 million for the Emergency Food Assistance Program, which the USDA uses to purchase commodities and food for distribution through food banks and community partners.
Using the authority and funding provided by the CARES Act, the USDA announced on April 17 the Coronavirus Food Assistance Program (CFAP), which will take several actions to assist farmers, ranchers and consumers. The program includes two major elements:
- Direct Support to Farmers and Ranchers: The program will provide $16 billion in direct support based on actual losses for agricultural producers where prices and market supply chains have been impacted. It will also assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19.
- USDA Purchase and Distribution: The USDA will partner with regional and local distributors, whose workforce has been significantly impacted by the closure of many restaurants, hotels and other food service entities, to purchase $3 billion in fresh produce, dairy and meat. It will begin with procurement of an estimated $100 million per month in fresh fruits and vegetables, $100 million per month in a variety of dairy products, and $100 million per month in meat products. Distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy and meat products to food banks, community organizations and other non-profits serving Americans in need.
The USDA did not provide details on how direct support for farmers and ranchers will be structured, but it intends to allow farmers to start applying for direct support in early May, with payments going out by the end of May or early June. While the USDA has not yet officially released details on the CFAP, other sources report that to be eligible, commodities must have experienced at least a 5 percent price decrease since January. The funding breakdown for commodity categories will be:
- $5.1 billion for cattle ranchers
- $2.9 billion for the dairy sector
- $1.6 billion for hog producers
- $3.9 billion for row crop farmers
- $2.1 billion for specialty crop producers
- $500 million for growers of other crops
The USCA will provide updates and details on CFAP assistance as information is released in the coming days and weeks.
Tom Hance is a policy expert and Dale Thorenson is associate director of the U.S. Canola Association with Gordley Associates government relations firm in Washington, D.C.