USDA announces $19 billion COVID-19 relief program

Jenny Schlecht
Forum News Service

WASHINGTON — U.S. Agriculture Secretary Sonny Perdue on Friday, April 17, announced some details of a $19 billion relief program to assist farmers, ranchers and consumers affected by the COVID-19 pandemic, including $16 billion in direct support to farmers and ranchers who have seen markets plummet in recent months.

Perdue, in a late Friday night call with reporters, said he’d love to be able to start getting checks out to producers by the end of May, though he acknowledged the government process will determine the timeline.

“We are committed to move out on this as soon as possible,” he said.

The USDA includes $16 billion in direct payments to farmers and ranchers. The money for the payments comes from $9.5 billion included in the Coronavirus Aid, Relief and Economic Security, or CARES, Act and $6.5 billion from the Credit Commodity Corporation. According to a release from Sen. John Hoeven, R-N.D., the livestock industry, hit hard by market changes and meat packing disruption due to plan shutdowns, will get $9.6 billion. Of that, the cattle industry will see the largest chunk, at $5.1 billion, followed by $2.9 billion for dairy and $1.6 billion for hogs. Row crop producers will receive $3.9 billion, and specialty crop producers will get $2.1 billion. Another $500 million will be for “other crops,” which Perdue said might include horticulture, the sheep or goat industries or other sectors.

“There will be other extraneous people coming along that we identify as we go forward,” he said.

Another $3 billion will be used to purchase produce, dairy and meat and distribute the products to people in need. Perdue explained the USDA will work with food service distributors, who have seen a downturn due to the closure of in-person eating establishments, to provide pre-approved boxes of food to food banks, community and faith-based organizations and other non-profits serving people in need.

Perdue said about half of people’s calories in normal times are consumed outside the home. With people being urged or forced to stay home because of the pandemic, the food chain has faced major disruption. He used recent cases of dairy farmers being forced to dump milk that usually would be bound for food service as an example. Under the $3 billion purchase program, products that usually would go into food service will be redirected, thus helping farmers, food processors and food service providers.

The Friday announcement was met with praise from farm groups and farm state representatives.

“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,” said Hoeven, who chairs the Senate Ag Appropriations Committee.

“Sustaining agriculture is critically important to our economy and rural way of life. It is also imperative to maintaining our food supply, which is a matter of national security,” said Rep. Jim Hagedorn, R-Minn., who serves on the House Agriculture Committee.

“The coronavirus pandemic forced the closing of restaurants, schools and college cafeterias, causing commodity prices to fall off a cliff and serious disruptions to food supply chains. 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,” said Zippy Duvall, president of the American Farm Bureau Federation. “The plan to purchase $3 billion in meat, dairy products, fruits and vegetables will help to stabilize markets and keep farms afloat so they can go about the business of feeding America.”

“Without immediate assistance, many more family farms could be forced out of business, which would devastate rural communities and threaten our food supply,” said Rob Larew, president of National Farmers Union. “We appreciate the administration’s commitment to help farmers weather this storm. To ensure the most effective use of these funds, payments must be commensurate with demonstrated need, and should be implemented in conjunction with policy that addresses fundamental market challenges. Failure to do so will result in the further consolidation of America’s farms, which will weaken our national food security.”

Signup for the programs likely will be through the USDA’s Farm Service Agency for producers who already work with FSA and through the Agricultural Marketing Service for producers who do not, including produce farmers who do not usually participate in FSA’s farm programs, Perdue said.

According to the release from Hoeven’s office, producers will be compensated for 85% of price losses that occurred Jan. 1, 2020, to April 15, 2020, and 30% of expected losses from April 15 through the next two quarters. The payment limit will be $125,000 per commodity with an overall limit of $250,000 per person or entity. Qualified commodities must have experienced a 5% price decrease between January and April.

Perdue said there almost certainly will be more aid announced in the coming months. The CARES Act also included $14 billion for Credit Commodity Corporation replenishment, but that money is not available until July. Perdue explained that the program set up now does not use that money, because the USDA did not want to make anyone wait that long for help.

“I’m not sure if people can hang on long enough until July to wait for that money,” he said.