Wallaces Farmer

National Sustainable Agriculture Coalition says the $16 billion in direct payments favors larger producers with simplest production systems.

Compiled by staff

May 20, 2020

3 Min Read
Trump speaking at podium where he's announcing details of COVID-19 aid for farmers.
White House screenshot

On May 19, the Trump administration announced farmers can begin signing up for COVID-19 direct payments on May 26.

The American Farm Bureau Federation, National Cattlemen's Beef Association and National Corn Growers Association were among those praising the announcement.

Today (May 20), the National Sustainable Agriculture Coalition released its review of the payment plan.

“The president recognized the importance of farmers who sell directly to their customers during his announcement of the CFAP program. It is unfortunate that the program USDA created does so little to support them,” said Eric Deeble, NSAC Policy Director. “CFAP fails to deliver for many farmers who are the backbone of local, resilient, sustainable food systems.”

The producer assistance includes $16 billion in direct payments. Producers will receive 80% of their maximum total payment upon approval of their application. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date as funds remain available. There is a $250,000 payment limit per person or entity.

Here's four flaws the National Sustainable Agriculture Coalition sees in the aid package:

  1. While the enrollment period is open from May 26 to Aug. 28, the Coronavirus Food Assistance Program will essentially operate on a "first come, first served" basis. This skews payments towards producers with the simplest production systems who are able to submit their claims as soon as the application window opens. Producers with complex operations who must compile more extensive documentation across multiple commodities and markets, who are unfamiliar with Farm Service Agency operations, or who need additional support in applying will face a structural disadvantage when applying for support.

  2. USDA has maintained that the CFAP program would be designed to compensate farmers for actual losses. However, the payment structure for the program relies on prices calculated by USDA without regard to the prices that producers actually receive for their products. For diversified operations, the limited list of specialty crops and other products eligible for payment further limits their opportunity for fair compensation. Some producers, like poultry growers, are excluded from the program entirely, regardless of the harm they have suffered.

  3. The CFAP program contains weak payment limits where some operations, established as corporations, may be eligible for up to $750k in payments. General partnerships are eligible for even more and some farms could receive millions in payments. Excessively high payment limits stretch precedent and the notion of fairness. Likewise, the requirements for a farmer to be eligible for a payment are out of line with other USDA programs. An individual need only have committed 400 hours of time to a farm operation to be eligible for payments which is less than in the 2015 rule and dramatically less than in the active labor test established in 1987. Similarly, AGI restrictions are weakened by permitting individuals that earn more than 75% of their income from farming, ranching, or forestry to be eligible for payment even if they have an AGI of >$900k. Raising payment limits while expanding who may be eligible for a payment will likely increase the number of operations claiming the maximum payment possible, leaving much less available for small or mid-size family farmers.

  4. CFAP could further exacerbate existing resource inequities because it does not reserve funding or provide any targeted support for farmers who may need it. New and beginning farmers who lack familiarity with USDA programs, historically underserved farmers who lack confidence in the agency due to previous discrimination, urban farmers with less access to FSA field offices, and farmers who have limited resources, language access needs, or other barriers to participation, will find no additional support built into the CFAP program.

This $16 billion allocated for direct payments this year comes after two years of trade bailouts to farmers, totaling $28 billion.

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