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USDA to implement up to $4 billion in pandemic aid through mid-August

Nearly $25 billion has been paid to farmers and ranchers since May 2020, mostly for corn, soybeans, cattle, and hogs, to buffer impact of pandemic on agriculture.

Biofuel producers, dairy farmers, and meat processors will receive a major portion of up to $4 billion in coronavirus aid programs that will be implemented over the next 60 days, Agriculture Secretary Tom Vilsack said on Tuesday. He also said the USDA will take “a pretty unique approach,” which could include a revolving loan program, to help small meat packers go into business or expand.

Nearly $25 billion has been paid to farmers and ranchers since May 2020, mostly for major crops such as corn and soybeans, cattle and hogs, to buffer the impact of the pandemic on agriculture. Iowa, California, Nebraska, and Minnesota have received $3 of every $10 in payments. The Biden administration said in late March that its new Pandemic Assistance to Producers program would earmark $6 billion for “a broader set of producers” who were overlooked or poorly served so far.

“Today, we are announcing somewhere between $3 and $4 billion of additional” assistance, with recipients that include biofuel makers, the dairy industry, contract growers, organic farmers, and small meat processors, said Vilsack at a Senate Appropriations subcommittee hearing. “The reason it’s taken so long is that there are literally 41 different groups of folks we’re trying to help that weren’t helped adequately or completely in the initial stages of COVID relief.”

Biofuel producers would receive $700 million and dairy farmers a combined $980 million, said the Agriculture Department. Some $700 million would go into grants for personal protective equipment for specialty crop growers and food processors. Small family-owned logging and timber hauling businesses would see up to $200 million in assistance. Up to $20 million in cost-share aid was available to organic producers, including those making the three-year transition to organic from conventional agriculture.

Aid also would flow to farmers who raised poultry under contract and to livestock and poultry producers who culled animals during 2020 due to the pandemic. COVID-19 outbreaks in processing plants forced some of the largest U.S. plants to slow production or close temporarily, which disrupted livestock markets and reduced sale prices. The USDA did not put a price tag on that part of the package or potential additional aid to dairy. Last December, a farm group said contract growers might receive $1 billion.

“Some of the funding details in the announcement today are to be determined. The secretary is speaking to a potential range,” said a USDA spokeswoman.

Ethanol producers “are still struggling to recover from COVID-related market losses,” said Geoff Cooper, chief executive of the Renewable Fuels Association. “We are happy to hear USDA intends to administer the aid in the next 60 days.” The USDA did not say how aid would be apportioned.

“As more and more Americans get vaccinated, things are slowly returning to normal – but many businesses, including farmers and ranchers are still feeling the lingering effects of the pandemic,” said Rob Larew, president of the National Farmers Union. The new round of pandemic money along with $4 billion announced by USDA last week to strengthen the food system “will help offset any remaining losses and begin to lay down the foundation for a more secure, competitive, and resilient food system.”

Vilsack lauded as “a good proposal” legislation to create a “special investigator for competition matters” within the USDA agency that oversees livestock marketing. “I also think, frankly, that we need more processing capacity. We’re going to come up with a very creative way to significantly expand processing capacity in this country.”

He responded “yes” when Montana Sen. Jon Tester asked if USDA gave thought to using pandemic relief funds to establish a revolving fund that could offer low-interest loans to help launch small meat processing businesses. Vilsack pointed to $60 million that was appropriated last December for grants to small meat and poultry processors to expand their facilities, qualify for federal inspection, and sell their products across state lines. The money should be available this month, he said.

Earlier, Vilsack told North Dakota Sen. John Hoeven “you will see over the course of the summer that we have a pretty unique approach” to expansion of meatpacking capacity. “I think there are opportunities for us to leverage federal resources with state economic development resources” as well as local, private-sector, and even nonprofit involvement. “I think you’ll see a lot of activity in this space in the next couple of months.”

To watch a video of the hearing or to read Vilsack’s written testimony, click here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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