Glitches in aid program obscure need for more relief during pandemic, say ag leaders
Farm groups are arguing for a massive new round of cash for agriculture in the coronavirus relief bill being negotiated by Congress and the White House, even though billions of dollars in an ongoing USDA aid program may go unclaimed. There’s no contradiction in the request, said the two largest U.S. farm groups on Monday.
“There’s ample reason to believe that family farmers and ranchers will need additional support in the coming months to withstand the financial impacts of the pandemic,” said Mike Stranz, a vice president at the National Farmers Union. Stranz and Terri Moore, a vice president at the American Farm Bureau Federation, said the unexpectedly slow rate of payments from a $16 billion coronavirus fund at the USDA was a poor gauge of conditions in farm country.
“We believe a combination of factors are contributing to the unallocated dollars — lack of need is not one of them,” said Moore.
As of Monday, $6.82 billion had been paid from the Coronavirus Food Assistance Program (CFAP), a one-time initiative created in April, to 499,156 applicants, said the USDA. The payments equal 43% of the money earmarked for agriculture. Some $270 million was disbursed last week, the smallest weekly payment since the program went into operation in late May. The deadline to apply for the program is Aug. 28.
Market prices for most commodities fell sharply as the coronavirus spread globally early this year. In June, the FAPRI think tank forecast a 9% drop in farm receipts from last year due to the pandemic. Although the largest farm subsidies ever paid — $33 billion — would soften the impact, they would not prevent a 3% drop in farm income, it said.
The Democratic-controlled House and the Republican-run Senate have proposed large assistance programs for agriculture. The Senate, with Trump administration backing, offered $20 billion to Agriculture Secretary Sonny Perdue to dispense through direct payments to producers. In May, the House passed legislation with $16.5 billion for payments to producers. The bill allows aid to processors, which some lawmakers say means ethanol makers, and to livestock and poultry producers who had to cull their animals because there were no buyers.
Stranz and Moore said quirks and glitches in CFAP may limit the program’s reach. “Some crops were not valued appropriately under CFAP, and a number of farmers who have smaller operations or who sell into local and regional markets only received a few dollars or were unable to apply for the program at all,” said Stranz.
“Some farmers and ranchers may not realize they qualify,” said Moore. “As you know, the qualifications evolved and expanded over time. Also, some of the farmers and ranchers who qualify are not accustomed to going through a federal application process, so we believe it’s also important for USDA, state ag departments, and ag groups to help get the word out and indicate where they can get help signing up.”
Half of CFAP payments to date, or $3.44 billion, have gone to livestock producers, followed by $1.79 billion to row-crop farmers, $1.3 billion to dairy farmers, and $269 million to specialty crop growers. Iowa is the leading state for payments, with $697 million, followed by Nebraska, with $499 million, and Minnesota, with $435 million.