Wallaces Farmer

Farmers will get $16 billion in direct payments, with bulk going to livestock producers.

Compiled by staff

April 21, 2020

3 Min Read
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Farmers will get $16 billion in direct payments as a result of the COVID-19 pandemic, Agriculture Secretary Sonny Perdue announced in a late-night call with reporters on Friday, April 17.

The money comes from $9.5 billion included in the Coronavirus Aid, Relief and Economic Security Act and $6.5 billion from the Commodity Credit Corporation.

"This program is intended to provide funds to boost food programs and to support farmers who are experiencing extreme economic difficulties due to the economic slowdown," said David Swanson, partner at the international law firm of Dorsey & Whitney.

Farmers and ranchers are facing immense challenges, said National Farmers Union President Rob Larew.

"Critical markets have evaporated overnight, demand has shifted dramatically, processing facilities have halted operations and commodity prices have cratered  - all of which are cutting into already thin margins," Larew said. "Without immediate assistance, many more family farms could be forced out of business."

"This $16 billion in aid will help keep food on Americans' tables by providing a lifeline to farm families that were already hit by trade wars and severe weather," said American Farm Bureau Federation President Zippy Duvall.

“Agriculture is facing immense uncertainty amid the COVID-19 pandemic,” said National Corn Growers Association President Kevin Ross. “This much-needed relief will not only provide direct assistance to our nation’s corn farmers but also deliver much-needed relief to our customers who produce and feed livestock."

The bulk of the direct payments will go to livestock producers, according to Sen. John Hoeven, D-N.D., chairman of the Senate Agriculture Appropriations Committee.

The breakdown:

  • $9.6 billion for the livestock industry, with $5.1 billion for cattle producers, $2.9 billion for dairy producers and $1.6 billion for hog producers.

  • $3.9 billion for row-crop producers.

  • $2.1 billion for specialty crop growers.

  • $500 million for other growers of other crops.

Producers will receive a single payment determined using two calculations:

  • Price losses that occurred Jan. 1 through April 15, 2020. Producers will be compensated for 85% of price loss during that period.

  • The second part of the payment will be expected losses from April 15 through the next two quarters and will cover 30% of expected losses.

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 and to get payments out to producers by the end of May or early June.

USDA will also purchase $3 billion worth of fresh produce, dairy and meat, which will be distributed to food pantries and other non-profit organizations that serve Americans experiencing food insecurity.

The fruit and vegetable package includes:

  • $2.1 billion in payments to growers and grower-shippers of fresh produce for demonstrated losses caused by the COVID-19 pandemic.

  • $100 million per month for the next six months for a new "Buy Fresh" program funded through the Families First Coronavirus Response Act. Through this program, the federal government will purchase fresh produce and pay for its delivery to food banks, curb-side school pick-up sites and other non-profit institutions.

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