Biden administration to oversee new coronavirus payments to farmers
Considering the time needed to convert legislation into action, the Biden administration will oversee the payment of most or all of the $13 billion in agricultural aid that was included in the latest coronavirus package, said Agriculture Undersecretary Bill Northey on Tuesday. Still, there was a chance that some funds could flow before the end of January, or even before the change in the administration on Jan. 20, Northey said during a news conference.
“We certainly have some things we would like to be able to get out very quickly,” said Northey, who oversees farm subsidies. He did not offer details. Some proposals are awaiting approval from the White House budget office so “we don’t have anything we’re announcing now.”
Farmers would receive payments of $20 an acre, roughly $5 billion in all, on crops that suffered at least a 5% price decline during a specified period, according to the $900 billion coronavirus package signed into law a week ago by President Trump. Livestock producers would be compensated for animals culled due to the pandemic. The package also created a $400 million dairy donation program, aid to contract poultry growers, and assistance for textile mills and possibly ethanol refineries, too.
President-elect Joe Biden, who has said he will propose additional pandemic assistance after he takes office, was scheduled to speak about the economy on Wednesday.
The USDA spent two months in designing the Coronavirus Food Assistance Program (CFAP), the major conduit of aid to farmers, after Congress passed the $2.2 trillion CARES bill in March, said Northey. The process included cost-benefit analyses, winning White House approval, and software for USDA agencies to use in administering the program.
“Many of these provisions would be such that they’re going to certainly get us past the 20th of January,” said Northey, a Trump appointee. “But we have a few pieces that we may be able to fold into some other efforts that we’re trying to do, or don’t require as much implementation.”
As an example of items that could require lengthy preparation, Northey pointed to a provision that authorizes USDA to compensate producers for up to 80% of the value of poultry and livestock that were culled because of backups at slaughter plants. “Those are challenges,” he said, in deciding what qualifies as depopulation and what proof will be needed for payment.
The coronavirus package also makes cattle producers eligible for supplemental payments and it alloted up to $1 billion to cover up to 80% of income lost by contract poultry producers because of the pandemic. Michigan Sen. Debbie Stabenow estimated up to $3 billion could be spent on the “plus up” payments for cattle, aid to contract poultry growers, and culled livestock.
Pandemic payments would buffer a projected sharp decline in farm income this year from the subsidy-fueled heights of 2020. Federal farm payments supplied 39% of the net farm income of $119.6 billion last year. Net farm income is a USDA gauge of profitability.
Some $23.5 billion in CFAP payments have gone to farmers and ranchers since late May, according to a USDA tally on Monday.
The farm safety net is likely to weaken in coming years, according to one-third of the farmers participating in a Purdue University poll released on Tuesday. The telephone survey, conducted from Dec 7-11, also found seven out of 10 large-scale producers expect higher taxes and eight of 10 expect stricter environmental regulations in the next five years.
All the same, “the farm income boost provided by the ongoing rally in crop prices appears to be the driving force” in a rise in farmer optimism. The Ag Economy Barometer reading of 174 was the second-highest since Purdue began the monthly survey in October 2015.