Federal COVID-19 aid could begin arriving in May

Issue Date: April 22, 2020
By Dave Kranz

Applications will begin in May for $16 billion in federal aid for farmers and ranchers who have suffered losses due to market disruptions caused by the COVID-19 pandemic, with U.S. Agriculture Secretary Sonny Perdue saying he hopes the assistance can be distributed by the end of May.

Perdue announced a $19 billion aid package last week that also includes $3 billion in food purchases to be distributed to people in need via food banks and other organizations.

The money comes from the Coronavirus Aid, Relief and Economic Security Act—or CARES Act—passed by Congress last month, and from Commodity Credit Corporation funds.

California Farm Bureau Federation President Jamie Johansson welcomed the announcement, noting that "the entire rural economy has been affected by the sudden, severe shift in demand we've seen since stay-at-home orders went into place."

The $16 billion in direct payments to farmers and ranchers will be distributed based on applications in which producers will demonstrate and self-certify their losses, Perdue said during a news conference. Farmers who are already registered with the Farm Service Agency may apply through those offices, Perdue said, while others will work through another U.S. Department of Agriculture agency, the Agricultural Marketing Service. Specifics of the application process will be released in coming days.

The chairman of the Senate Agriculture Appropriations Committee, John Hoeven, R-N.D., said the direct aid would be allocated with $9.6 billion directed to livestock producers—$5.1 billion for cattle, $2.9 billion for dairy and $1.6 billion for hogs.

Hoeven said USDA will set aside $3.9 billion for row crop farmers, $2.1 billion for specialty crop producers and $500 million for other crops.

Perdue said the "other" category would likely include horticulture producers, sheep and lamb producers, and additional farmers and ranchers not covered in the existing livestock and crop categories.

"We know that the disruption of markets and demand is significant and these payments will only cover a portion of the impacts on farmers and ranchers," Perdue said, adding that USDA is "doing everything we can to cover as many people, both smaller farmers as well as larger farmers."

CFBF President Johansson said the assistance for farmers and ranchers "must be distributed quickly and fairly, with enough safeguards to assure it reaches the appropriate people."

"We understand that can be a difficult balance, and we will continue to offer USDA our best advice on how to make this aid package as effective as possible for farmers, ranchers and all the people who depend on them," he said.

American Farm Bureau President Zippy Duvall said the aid to farmers and ranchers "will help keep food on Americans' tables by providing a lifeline to farm families that were already hit by trade wars and severe weather."

Perdue said the direct aid to farmers and ranchers would cover losses suffered from mid-January through mid-April, and that he expects USDA to provide "additional assistance with costs and disruption to markets in the months ahead."

"We'll be looking at second quarter losses as we go forward and have a better data position of knowing what the exact numbers are going forward," he said, adding, "I anticipate that we will need additional money."

Perdue said the food purchases for distribution to food banks and other charities would involve, at least to some degree, institutional food-service distributors such as Sysco, whose operations have also been disrupted as restaurants, school facilities and other outlets downsized or closed due to stay-at-home orders.

At the same time, food banks and other organizations have seen their numbers of volunteers decline, the secretary noted. The plan is for the food-service distributors to assemble food boxes that would include meat, produce and dairy products, Perdue said.

The private providers would be "using their workforce to help us deliver prepackaged boxes to the food banks and other distribution centers in order to make it as easy as possible, rather than having the food banks to have to have their workforce put all those together," he said.

The secretary acknowledged the food-box program amounts to "a logistical Rubik's cube" but said AMS officials have begun working "on how to develop the relationships and the protocol and the finances and the central types of contract points with the food service vendors."

The idea, Perdue said, is to "efficiently relocate the dislocated supply chain from where there's abundance and waste and to the places where that food is needed." (See related story)

In addition to the $3 billion in the new food-purchase program, USDA said it has more than $873 million available in existing Section 32 funding to buy agricultural products for distribution to food banks.

"The use of these funds will be determined by industry requests, USDA agricultural market analysis and food bank needs," the agency said.

COVID-19 aid bills passed by Congress also included at least $850 million for food bank administrative costs and USDA food purchases, "of which a minimum of $600 million will be designated for food purchases," USDA said.

(Dave Kranz is editor of Ag Alert. He may be contacted at dkranz@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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