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USDA unveils Coronavirus Food Assistance Program

The $19 billion program is intended to provide support to farmers while maintaining the U.S. food supply chain.

April 21, 2020

4 Min Read
Sonny Purdue and Mike Pence
AG ASSISTANCE: Agriculture Secretary Sonny Perdue announced the details of USDA’s Coronavirus Food Assistance Program on April 17. MFB

While many specific process and enrollment details were not immediately available, Agriculture Secretary Sonny Perdue unveiled USDA’s Coronavirus Food Assistance Program on April 17.

The $19 billion USDA relief program is intended to provide immediate, critical support to farmers while maintaining the integrity of the U.S. food supply chain during the COVID-19 national emergency, Perdue said.

“During this time of national crisis, President [Donald] Trump and USDA are standing with our farmers and all citizens to make sure they are taken care of,” Perdue said in a statement. “The American food supply chain had to adapt, and it remains safe, secure and strong, and we all know that starts with America’s farmers.”

Related: Complete coronavirus coverage

Perdue said that USDA will use funding and authorities provided in the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Families First Coronavirus Response Act (FFCRA), and other existing authorities to implement CFAP on two fronts — $16 billion in direct support for farmers and another $3 billion in accelerated USDA purchases and distribution of food supplies.

CFAP will provide direct support for agricultural producers, based on actual losses where prices and market supply chains have been affected. It also will assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year because of COVID-19.  

Michigan Farm Bureau President Carl Bednarski, a Tuscola County crop farmer, welcomed the announcement, saying all economic indicators suggest the 2020 farm economy will be brutal for the state’s farmers.

“There’s no doubt that the economic realities of COVID-19 have already had a significant impact,” Bednarski said. “What started out as a promising year has been turned upside down in less than a month, with prices for literally every major commodity sector down 30% to 50% across the board.”

An April 14 economic analysis by the University of Missouri’s Food & Agricultural Policy Research Institute is projecting an $11.85 billion loss in revenue for the crops sector and an additional $20.24 billion reduction in receipts for all livestock sectors combined. 

“FAPRI’s analysis estimates a combined $32.09 billion drop in cash receipts for U.S. crop and livestock farmers,” Bednarski said. “Total farm income for 2020 is projected to drop by $20 billion after factoring in lower input prices and after the expected government disaster payments.”

Bednarski said Michigan Farm Bureau is looking forward to learning more and assisting producers with enrollment details as soon as possible. 

“It can’t come quick enough,” he added.

Sen. John Hoeven, R-N.D., chairman of the Senate Agriculture Appropriations Committee, said in a statement that the $16 billion in direct producer assistance would be targeted accordingly:

  • $9.6 billion for the livestock industry

  • $5.1 billion for cattle

  • $2.9 billion for dairy

  • $1.6 billion for hogs

  • $3.9 billion for row crop producers

  • $2.1 billion for specialty crops producers

  • $500 million for others crops

According to Hoeven, producers will receive a single payment determined using two calculations:

  1. Price losses that occurred Jan. 1 through April 15. Producers will be compensated for 85% of price loss during that period.

  2. Expected losses from April 15 through the next two quarters. Producers will be compensated for 30% of expected losses through that period.

The payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity. Qualified commodities must have experienced a 5% price decrease between January and April. 

USDA is expediting the rule-making process for the direct payment program and expects to begin sign-up for the new program in early May to get payments out to producers by the end of May or early June. 

Hoeven said that the programs announced by USDA are made available using $9.5 billion in emergency funding in the CARES Act, as well as USDA’s existing Commodity Credit Corporation funding and Section 32 authority. 

Additionally, Hoeven said $14 billion will replenish CCC and be available in July to aid farmers under the CARES Act.     

Perdue said the $3 billion in CFAP purchases will include fresh produce, dairy and meat products. USDA will partner with regional and local distributors, whose workforce has been significantly affected by the closure of many restaurants, hotels and other food service entities, for distribution to those in need.

USDA will begin with the procurement of an estimated $100 million per month in fresh fruits and vegetables, $100 million per month in a variety of dairy products, and $100 million per month in meat products. 

Distributors and wholesalers then will provide a preapproved box of fresh produce, dairy and meat products to food banks, community- and faith-based organizations, and other nonprofits serving Americans in need.

In addition to the targeted programs, Perdue says USDA will use other available funding sources to purchase and distribute food to those in need:

Food bank purchases. USDA has up to an additional $873.3 million available in Section 32 funding to purchase a variety of agricultural products for distribution to food banks. The use of these funds will be determined by industry requests, USDA agricultural market analysis and food bank needs.  

Food bank help. The FFCRA and CARES Act provided at least $850 million for food bank administrative costs and USDA food purchases, of which a minimum of $600 million will be designated for food purchases. The use of these funds will be determined by food bank needs and product availability.

Source: Michigan Farm Bureau, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

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