The U.S. Department of Agriculture will offer direct payments to farmers and buy and distribute agricultural products in an attempt to aid farmers affected by the novel coronavirus pandemic.
On April 17, U.S. Secretary of Agriculture Sonny Perdue announced the Coronavirus Food Assistance Program, a USDA program that will take several actions to assist farmers, ranchers, and consumers in response to the COVID-19 national emergency. President Donald Trump directed USDA to craft this $19 billion immediate relief program to “provide critical support to our farmers and ranchers, maintain the integrity of our food supply chain, and ensure every American continues to receive and have access to the food they need,” the USDA said in a news release.
“The American food supply chain had to adapt, and it remains safe, secure, and strong, and we all know that starts with America’s farmers and ranchers,” Perdue said. “This program will not only provide immediate relief for our farmers and ranchers, but it will also allow for the purchase and distribution of our agricultural abundance to help our fellow Americans in need.”
During a conference call with reporters April 17, Perdue said the USDA would like to have checks sent out by the end of May. Details regarding eligibility, rates, and other implementation will be released at a later date, according to a USDA news release.
Randy Romanski, interim secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection, sent a letter to Perdue expressing appreciation for the efforts and requesting more details about the program.
“I look forward to seeing the full details of CFAP, and I urge Secretary Perdue to get this funding to farmers as quickly as possible,” Romanski said in a news release. “COVID-19 has been hard on all of us, but especially on those who grow, process, and distribute our food. The difficulties they are facing will not stop here. To fully address those impacts, more resources and greater flexibility will be needed. I look forward to working with Secretary Perdue in thinking creatively about how we can continue to support Wisconsin agriculture as we navigate this pandemic together, not just today but well into the future.”
The program will use the funding and authorities provided in the Coronavirus Aid, Relief, and Economic Security Act, the Families First Coronavirus Response Act, and other USDA existing authorities. The program includes direct support to farmers and ranchers and USDA purchase and distribution of agricultural goods.
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.
For the purchase and distribution portion of the program, the USDA will use regional and local distributors to buy $3 billion in produce, dairy, and meat. The USDA estimates $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 will be purchased to begin the program. 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 Americans in need.
According to the Wisconsin Farmers Union, direct payments to farmers will cover 85% of the losses incurred between January 15 and April 15, based on estimates projected by the Agricultural Marketing Service. Payments will not cover losses covered through existing farm bill programs, such as crop insurance or the Dairy Margin Coverage program, and will be subject to a payment limitation of $125,000 per commodity and $250,000 per producer. The AMS’ impact analysis suggests that agriculture has incurred $40 billion in losses.
WFU President Darin Von Ruden stressed the importance of dividing aid fairly, to ensure it reaches America’s family farmers. He also urged a deeper look at the structural issues that have wreaked havoc on the U.S. supply chain amid the coronavirus crisis.
“Family farmers across the nation continue to work to keep food on our tables, and this aid will be critical for keeping some of those farms on the land and in our rural communities amid the blows they’ve been dealt from market disruptions,” Von Ruden said. “We also must recognize that farmers have been in crisis for the past several years. The pandemic has clearly demonstrated the frailty that comes to a food supply chain when it becomes too consolidated. As we move forward, the agricultural community and lawmakers need to be working together to address consolidation, supply management, and the price fixing we have witnessed, particularly in the cattle industry. Farmers across various sectors are feeling the impact of a food system that puts the majority of the risk on the farmer while those further down the supply chain reap the profits.”
National Pork Producers Council President Howard “A.V.” Roth said in a news release the aid package will “fall short of what is truly needed,” for hog producers impacted by processing plant closures caused by COVID-19.
“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,” Roth said.
Also during the April 17 conference call, Perdue said the USDA wasn’t likely going to re-open enrollment in the Dairy Margin Coverage program. Enrollment in 2020 was down nearly 20% compared to last year, according to the USDA.
“The Dairy Margin Coverage program is just like the safety net for crops. It doesn’t make any sense to have an insurance program and allow people to retroactively decide to add coverage after they need it,” Perdue said.