USDA Announces Plans to Distribute Relief to Farmers
On Friday, April 17, the USDA announced how they plan to provide relief to farmers with emergency funding allocated by Congress through the CARES Act, the third COVID-19 relief package passed by Congress. USDA will be providing $16 billion in direct assistance to farmers and ranchers, and $3 billion in agriculture purchases. 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 USDA expects direct payments to go out to farmers by late May. Details of the application process have not been released yet.
The USDA will purchase $3 billion of meat, dairy, and produce in the coming months to support producers and provide food to those in need. The USDA has said it plans to buy $100 million worth of meat, $100 million of produce, and $100 million per month from local and regional distributors, who will be required to deliver the food to food banks in household-ready food boxes. It remains unclear whether the bidding process USDA will use for buying the products to be distributed under this program will allow for any purchases of organic products for distribution to food banks.
Some Members of Congress, including U.S. Rep. Chellie Pingree (D-ME) have expressed concerns over how small farmers and local food distribution systems will receive support through the program.
The CARES Act also provided funding for the Paycheck Protection Program. Many in the organic community, including farmers, certification agencies, and non-profit organizations that provide technical assistance to organic producers, have applied for this program. Unfortunately, the program has exhausted the nearly $350 billion allocated to provide low-interest loans to small businesses. On April 21, Congressional leaders announced a deal to supplement the funding for Paycheck Protection Program to allow the program to continue to provide assistance. The bipartisan agreement, H.R. 266 (116), would also allow agricultural operations with fewer than 500 employees to qualify for the Small Business Administration’s Economic Injury Disaster Loan, which offers up to $10,000 in advance to businesses that are losing revenue amid the coronavirus pandemic.
Congress is also currently discussing measures to be included in a fourth coronavirus relief package. The timing of this package is uncertain, but they are hoping to pass it sometime in May.
Listen to USDA Secretary Perdue’s Press Conference on the Coronavirus Food Assistance Program.