Last Friday night, President Donald Trump and United States Secretary of Agriculture Sonny Perdure announced a new program to assist farmers, ranchers and consumers in response to the COVID-19 national emergency.
In the Coronavirus Food Assistance Program (CFAP), President Trump directed USDA to craft $19 billion in an immediate relief program to provide critical support to farmers and ranchers, maintain the integrity of the food supply chain, and ensure every American continues to receive and have access to the food they need.
U.S. Senator John Hoeven (R-ND) thanked President Trump and Secretary Perdue’s for their efforts on the program and said, “Our farmers and ranchers have continued to provide our nation with food, fuel and fiber during this pandemic, and we need to ensure they have the support necessary to continue their essential work.” According to a news release from Hoeven’s office, the CFAP program includes two major elements to achieve these goals.
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.
- The livestock industry will receive $9.6 billion with the cattle industry seeing the largest chunk at $5.1 billion. The dairy industry will also see $2.9 billion dollars while the hogs will obtain $1.6 billion.
- Farmers will have access to $3.9 billion dollars for row crop farmers, $2.1 billion for specialty crop producers and $500 million for other crops.
USDA Purchase and Distribution: 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.
On top of these targeted programs USDA will utilize other available funding sources to purchase and distribute food to those in need. According to Section 32 funding, the USDA can utilize an additional $873 million to purchase a variety of agricultural products for distribution to food banks.
Hoeven’s office also detailed how farmers and producers will likely be paid and what qualifies them.
Producers Will Receive A Single Payment Determined Using Two Calculations
- Price losses that occurred January 1-April 15, 2020. Producers will be compensated for 85% of price loss during that period.
- Second part of the payment will be expected losses from April 15 through the next two quarters, and will cover 30% of expected losses.
The payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity. Qualified commodities must have experienced a 5% price decrease between January and April.
USDA is expediting the rule making process for the direct payment program and expects to begin sign-up for the new program in early May and to get payments out to producers by the end of May or early June.
Several groups responded to the new program with strong support. National Cattlemen’s Beef Association President Marty Smith said “We applaud USDA’s work to quickly craft a plan to distribute the funds to those who need it most and we look forward to learning more about that plan very soon. America’s cattle producers are facing unprecedented crisis after two market-disruptions in less than a year and this funding will provide the certainty needed to move forward with their work.”
American Farm Bureau Federation President Zippy Duvall says this $16 billion in aid will help keep food on Americans’ tables by providing a lifeline to farm families that were already hit by trade wars and severe weather.
However, some groups were not as impressed with the funding. National Pork Producers Council President Howard “A.V.” Roth said “While the direct payments to hog farmers will offset some losses for some farmers, they are not sufficient to sustain the varied market participants, including those who own hogs as well as thousands of contract growers who care for pigs.”
Despite a few disagreements, most everyone involved in agriculture is on board with the plan for the new program.
Northern Ag Network – 2020