Relief programs to provide aid to farmers and ranchers

Issue Date: April 15, 2020
By Christine Souza

With the shutdown of schools, many restaurants, tourism destinations and other food-service clients affecting thousands of California farmers and ranchers, agricultural organizations have been urging federal and state officials to consider relief programs for all sectors of agriculture.

The California Farm Bureau Federation and other state, national and commodity-specific organizations have advocated for assistance that would help producers of a number of different crops and commodities weather the sudden disruption of markets caused by the pandemic.

For example, CFBF has urged members of Congress and the U.S. Department of Agriculture to consider California specialty crop growers in COVID-19 relief programs, specifically when developing provisions and programs in the $2 trillion stimulus package known as the Coronavirus Aid, Relief and Economic Security Act. The CARES Act includes $23 billion in agricultural aid. In a separate request, CFBF and other state Farm Bureaus urged Agriculture Secretary Sonny Perdue to use all options within his authority to assist cattle ranchers.

"In advocating for specialty crop producers, we want to make sure USDA is using the definition of specialty crops as provided in the farm bill, in order to broaden the support for all producers including nursery, floriculture and horticulture," said Sara Neagu-Reed, CFBF associate director of Federal Policy. "In advocating for cattle ranchers, we asked USDA to direct support to stocker and cow/calf operators, who have shouldered the brunt of the market decline caused by the pandemic."

As of our deadline, the USDA had not decided how it will divide and disperse the $23 billion. In the bill, Congress included $14 billion to replenish the Commodity Credit Corporation and $9.5 billion to be used for agricultural producers affected by COVID-19.

A letter signed by a coalition of more than 80 produce groups, including CFBF, proposed $5 billion in payments to growers and marketers harmed by the loss of food-service markets.

In implementing the CARES Act, the coalition said, USDA should establish a produce market-stabilization program for farmers who can identify economic losses related to COVID-19 emergency declarations; a stabilization program to assist produce growers, shippers and distributors through the Perishable Agricultural Commodities Act to help assure continued lending and that losses would be covered; and a purchase and distribution program to prioritize fresh fruits and vegetables in federal nutrition programs.

For cattle ranchers, the state Farm Bureaus asked USDA to "thoroughly examine" all opportunities within the Commodity Credit Corporation's existing authority to provide funding to offset losses from depressed cattle prices, and to use programs such as Emergency Assistance for Livestock, Honeybees, and Farm-raised Fish to provide additional assistance.

Under the CARES Act, agricultural producers now have more time to repay Marketing Assistance Loans. Specifically, the loans now mature at 12 months rather than nine, and this flexibility is available for most commodities. In addition, effective immediately, producers of eligible commodities have up to 12 months to repay commodity loans. USDA said the maturity extension applies to nonrecourse loans for crop years 2018, 2019 and 2020. Eligible open loans must in good standing with a maturity date of March 31 or later, or be new crop year (2019 or 2020) loans requested by Sept. 30. All new loans requested by Sept. 30 will have a maturity date 12 months following the date of approval. The maturity extension for current, active loans will be automatically extended an additional three months. Loans that matured March 31 were automatically extended by the USDA Farm Service Agency. The agency said producers who prefer a nine-month loan, or who would like more information, should contact a local FSA office for a phone appointment.

Applications opened April 3 for the Paycheck Protection Program. Made available to farmers and other small businesses of 500 or fewer employees, PPP is meant to pay employees for an eight-week period during a range between Feb. 13 and June 30. The program can also be used for payroll costs and benefits, and for interest on mortgages, rent and utilities. For the loan to be forgiven, payroll levels and wages must be maintained through June 30.

From the state government, California small businesses with fewer than 750 employees that have been harmed by response to COVID-19 can use a disaster relief loan guarantee program. In addition, small businesses may defer payment of sales tax of up to $50,000 for up to 12 months. The state has clarified that local tax assessors can choose to waive late fees for those who are late on paying the second installment of property taxes, which was due April 10.

A five-bill "California Farmworker COVID-19 Relief Package" proposes to expand paid sick leave for farm employees, provide supplemental hazard pay, extend a tax credit to farmers who offer overtime work to their employees, fund an outreach campaign to educate employees on personal protection practices, and help expedite temporary housing to mitigate overcrowding and allow for social distancing. The legislation was introduced last week by Assembly members Robert Rivas, D-Hollister, and Eduardo Garcia, D-Coachella.

In responding to the legislation, CFBF Administrator Jim Houston said, "The tax credit for overtime is desperately needed, and we appreciate the effort to address rising employment costs during a time of economic crisis."

As to the other aspects of the bill package, Houston said, "clearly, farmers and ranchers are rightfully concerned with their ability to keep their employees safe and keep food flowing to the marketplace, while hoping they can still afford to pay their employees and creditors. Any new costs, mandates or regulations could seriously harm farms and ranches that are simply struggling to survive right now."

For additional information about relief programs available to farmers and ranchers, see the Banking & Finance section of the CFBF COVID-19 Industry Resource page at www.cfbf.com/industry-resource/.

For resources from the state government, see the California Department of Food and Agriculture website at www.cdfa.ca.gov/coronavirus/ and the GO-Biz site at business.ca.gov/coronavirus-2019/. The state treasurers' office provides a spreadsheet of resources for small businesses at www.treasurer.ca.gov/covid-19.asp.

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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