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What is in USDA’s $19 billion coronavirus relief program?

Secretary of Agriculture Sonny Perdue announced $19 billion in aid for farmers and ranchers hit hard by the COVID-19 national emergency on Friday. The program was designed especially for farmers who normally sell their products into the restaurant and food service supply chain, which has been dramatically disrupted by shuttered schools and restaurants.

“When you think about the fact that about half of our calories are consumed outside the home, that’s been a dramatic shift in the consumption patterns and the misalignment of production and supply has caused some real challenges here,” Perdue told the media Friday night. “As a result, farmers are seeing prices and their market supply chain affected by the virus like they never could have expected.”

This $19 billion in aid will be distributed in two parts and is formally called the Coronavirus Food Assistance Program (CFAP).

The first $16 billion of the program is dedicated to direct payments to farmers who face losses due to the pandemic. USDA economists looked at commodity losses between mid-January to mid-April to determine assistance. Farmers and ranchers may apply for assistance regardless of their operation size or market outlet if they’ve suffered eligible losses.

The remaining $3 billion will be used by USDA to purchase produce, dairy, and protein products for food banks and other non-profits to be distributed to those in need.

Does this package include aid for biofuels and ethanol producers?

This package of aid does not include assistance for the biofuels industry.

While Perdue acknowledged “huge challenges” facing the ethanol industry and corn farmers, he said there’s not enough money to go around.

What crops are eligible for direct payment support under part one of the program?

“The programs will be providing assistance to most farms that have significant losses,” said a USDA spokesperson. “For producers that have not experienced at least a 5% loss there will not be payments. When prices are not available for USDA to pre-determine eligibility, producers will be able to submit claims demonstrating at least a 5% loss, which will be adjudicated by FSA and AMS on a case-by-case basis. The rulemaking will have much more details on the scope of these payments.”

When will aid checks be in the mail to farmers?

Perdue assured farmers USDA will get checks in the mail to eligible farmers as quickly as possible.

“I’m hoping we can get checks by the end of May,” he said, noting it will be a big task for USDA staff.

Where is the money for CFAP coming from?

This program is funded by the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Families First Coronavirus Response Act (FFCRA), and the Commodity Credit Corporation (CCC).

The $9.5 billion from the CARES Act can be used with less restriction than the CCC funds that have to be used in particular areas, Perdue explained.

“We decided because of the immediacy of the need to get this money out as quickly as possible, to use the nine a half that that’s appropriated, and the six and a half that we had residual in our CCC account that will allow us to do $16 billion in direct payment,” said Perdue.

Will there be more coronavirus aid to farmers in the future?

CCC replenishment will not be available to USDA until July, he continued. 

“I felt like it was imperative to move more quickly and get these areas covered for first-quarter losses because I’m not sure people can hang on long enough to July and wait for that money. We do anticipate further needs. We’ll be looking at second quarter losses as we go forward,” Perdue said. “I anticipate that we will need additional money.” 

Is USDA working to prioritize COVID-19 testing for meat processing plants?

While USDA has participated in several conversations between the CDC, the White House, and packing plant owners, it’s not the department’s role to get the tests, Perdue explained.

“We try to facilitate a connection when we’re able and let people know of the urgent need in our processing facilities. Certainly, in pork it’s critical,” Perdue said. “We cannot afford for these plants to be offline very long.”

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