Corona Virus Assistance for Agriculture – What’s Happened So Far?
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In response to the Corona virus, congress has authorized several spending bills to help affected sectors of the economy. Definitely agriculture is one of those. The CARES Act provided the Payroll Protection Plan and unemployment for self-employed individuals. However, there have been some directives since that act was passed that more directly impact the farm community.
The Corona virus Food Assistance Program (CFAP) was announced recently by US Department of Agriculture Secretary Sonny Perdue. CFAP is a $19 billion program and will use the funding and authorities provided in the CARES Act, the Families First Coronavirus Response Act (FFCRA), and other USDA existing authorities. The program includes two major 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 and will 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.
The direct payments will financially assist producers with additional adjustment and marketing costs resulting from lost demand due to COVID-19. The payments will be connected to actual production and based on actual losses experienced by producers in response to price declines and supply chain disruptions. To qualify for a payment, a commodity must have declined in price by at least 5% between January and April. Of the $16 billion allocated, it is estimated that $2.1 billion will be for specialty 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. It will begin with the 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. The distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy, and meat products to food banks, community and faith based organizations, and other non-profits serving those in need.
USDA has other available sources of funding to purchase and distribute food. The USDA has up to an additional $873.3 million available in Section 32 funding to purchase a variety of agricultural products for distribution to food banks. Also, the FFCRA and CARES Act provided an 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.
There obviously will be some flexibility in these programs as certain commodities were not included by name but will probably be considered. For more detailed information on these programs, please see the referenced links below.