US agriculture industry to get $19 billion in subsidies
The US Department of farm announced on April 17 a $19 billion rescue package to help the US farm sector, which is suffering from the effects of COVID-19. The package would include direct payments to growers and purchases of agricultural products to feed the hungry.
According to Secretary of Agriculture Sonny Perdue, the Coronavirus Food Assistance Program (CFAP) would utilize funding from the Families First Coronavirus Response Act (FFCRA), the Coronavirus Aid, Relief and Economic Security Act (CARES), and existing powers.
Mr. Perdue stated, “President Trump and USDA are standing with our farmers, ranchers, and all citizens to make sure they are taken care of during this time of national crisis.” The nation’s farmers and ranchers are the first line of defense for the safe, secure, and robust food supply chain in the country, which has had to adjust over time. This program will enable the purchase and distribution of our agricultural abundance to benefit our fellow Americans in need, in addition to offering our farmers and ranchers instant assistance.
The two primary funding streams of the CFAP are $16 billion in direct producer assistance and $3 billion in purchases of agricultural goods to feed the underprivileged.
The first element grounds direct assistance to ranchers and farmers on their actual losses as a result of COVID-19’s effects on supply chains and market prices. The package is to help with 2020 adjustments and marketing expenses resulting from short-term overstock and reduced demand.
Second, the USDA plans to buy $3 billion worth of fresh meat, dairy, and produce from regional and local distributors who are being negatively impacted by the decline in demand from a clientele that includes hotels, restaurants, and other foodservice businesses. According to a purchase schedule released by Mr. Perdue, the USDA will spend $100 million a month on dairy products, $100 million on meat products, and $100 million on fresh fruits and vegetables.
The USDA will instruct distributors and wholesalers to package a selection of fresh produce, dairy, and meat goods and transport them to nonprofit organizations that assist Americans in need for the latter. Food banks and community and faith-based organizations will be the two primary distribution sites.
The office of North Dakota Senator John Hoeven, the chairman of the Senate Agriculture Appropriations Committee, provided more information. The following is a breakdown of the $16 billion in direct support provided to farmers and ranchers: The livestock industry received $9.6 billion; cattle received $5.1 billion; dairy received $2.9 billion; hogs received $1.6 billion; row crop producers received $3.9 billion; producers of speciality crops received $2.1 billion; and other crops received $500 million.
“We put a lot of effort into giving USDA more resources to support our farmers and ranchers during this difficult time, including $9.5 billion in emergency funding designated just for our ranchers and other specialty producers,” Mr. Hoeven stated. “We are grateful that the president and USDA Secretary Perdue moved swiftly to distribute this round of aid, and we will keep working to make sure that these funds are allocated in a way that will best support our farmers. Throughout this pandemic, our country’s farmers and ranchers have continued to supply food, fuel, and fiber; we must make sure they have the resources needed to carry on their vital task.
The USDA has two more funding sources in mind for buying food goods from struggling farmers and distributing them to the underprivileged. First, an additional $873.3 million in Section 32 funds will be made available, with the amount based on industry requests, a USDA agriculture market study, and the needs of food banks. Second, of the $850 million allocated by the FFCRA and CARES acts for USDA food purchases and food bank administrative expenditures, at least $600 million will be set aside for food purchases based on the availability of food and the need of the food bank.
Wheat farmer Dave Milligan, president of the National Association of Wheat Growers, stated, “We applaud the agency for putting the program together so promptly and we look forward to seeing details about how the program will work.” Milligan is from Cass City, Michigan. “During the COVID-19 national emergency, NAWG looks forward to collaborating with the USDA and Congress to ensure that the needs of wheat growers are met.”
“A clear need for additional aid was expressed by the bulk of soy growers who responded to the COVID-19 survey, so (the aid) could not be more timely,” stated Kevin Scott, vice president of the American Soybean Association. We value the administration’s and USDA’s ongoing assistance to agriculture throughout the coronavirus outbreak, and we particularly value that CFAP will include soy.”
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The National Corn Growers Association President, Kevin Ross, stated, “The COVID-19 pandemic is causing a great deal of uncertainty in agriculture.” Not only will our country’s maize farmers benefit directly from this much-needed relief, but our clients who raise and feed livestock will also benefit greatly from it. We appreciate Secretary Perdue’s prompt action and are eager to collaborate with USDA on the specifics of future programs.
The Department of Agriculture has taken a number of steps to ensure that those who are food insecure are nourished and that supply chains are safe throughout the COVID-19 pandemic. The most recent effort to help and support comes from the USDA.
These initiatives include meal delivery to pupils whose rural schools are closed and increased flexibility for food assistance programs in all 50 states. The Department has signaled flexibility in the distribution of certain items, like dairy and eggs, and facilitated farmers’ access to loan flexibilities, deferrals, and maturity extensions in order to maintain supply chains.