On Friday, the White House announced that it will direct $19 billion in funds to aid farmers and ranchers during the coronavirus crisis. CAFF and our allies in D.C. are currently awaiting more details in order to explain exactly what this funding will mean for California family farms and local systems. For now, with help from our alliance in Washington, the Organic Famers Association, here’s an overview of what we do know at this time. One immediate call-to-action for farmers: gather (and begin keeping) as much documentation as possible that demonstrates any financial losses your business has incurred as a result of the crisis, as this will be vital if and when opportunities to apply for funding arise. And stay tuned for additional updates.
1. Commodity Purchases for Food Aid
2. Direct Assistance to Farmers
3. Paycheck Protection Program
IF YOU ARE INTERESTED IN THIS… ACT FAST: COMMODITY PURCHASES FOR FOOD AID
Regenerative organic farming has the power to heal the planet and transform lives.
USDA is opening up a bidding process for $3 billion of commodity purchases of fresh produce, dairy, and meat products – in the next two weeks.
If you are interested in this, we strongly encourage you to attend the USDA Webinar Tuesday at 2pm ET. REGISTER HERE.
From what we know so far, it looks like farms, distributors, and nonprofits giving out food will have to work together to identify a plan. Hopefully more details will be explained when USDA releases the actual documents.
From the USDA: USDA’s Agricultural Marketing Service (AMS) will procure 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 to provide a pre-approved box of fresh produce, dairy, and meat products to food banks and other non-profits serving Americans in need.
USDA will issue a solicitation in the next two weeks to invite proposals from offerors to supply commodity boxes to non-profit organizations, identified by the offeror, on a mutually agreeable, recurring schedule. USDA will award contracts for the purchase of the agricultural products, the assembly of commodity boxes and delivery to identified non-profit organizations that can receive, store and distribute food items.
An informational webinar for interested participants will be held at 2 p.m. EDT on Tuesday, April 21, 2020. If you are unable to participate in the webinar, a recording will be available.
Email questions to USDAFoodBoxDistributionProgram@usda.gov.
To receive USDA updates by e-mail, subscribe online by visiting: “Stay up to date on USDA Food Purchases” available on the AMS Commodity Procurement website.
MONEY FOR FARMERS: DIRECT ASSISTANCE FOR FARMERS & RANCHERS
$16 billion in direct payments for farmers and ranchers. Funded using the $9.5 billion emergency program secured in the CARES Act and $6.5 billion remaining in Credit Commodity Corporation (CCC) funding.
- $16 billion in direct payments to farmers & ranchers includes:
- $9.6 billion for the LIVESTOCK industry
- $5.1 billion for cattle
- $2.9 billion for dairy (Whole milk dairy cottage cheese, butter, are products mentioned for purchases and family sizes are being encouraged.)
- $1.6 billion for hogs (Pork was mentioned to be included in food purchasing/distribution program.)
Payments based on animals by type, not necessarily cost/sales (details to come).
- $3.9 billion for ROW CROP producers
- $2.1 billion for SPECIALTY CROP producers
- AMS is taking the lead on the specialty crop programs to determine appropriate calculations.
- USDA intends to be able to include floriculture under Specialty Crop bucket; they are not sure how damage numbers will be calculated, but cut flowers are intended to be included.
- More information on losses is needed on rate settings and for nurseries; USDA will have to conduct a look back on information that was on hand/produced/in the ground (including 2019/early 2020 data), not going to be designed to impact planting moving forward.
- $500 million for OTHER CROPS
- Additional crops will be included, and some are yet to be determined.
- Restaurants and smaller producers and those marketing through farmers markets are intended to be assisted.
- Payments are likely to be based on losses from production in early January – April, (not necessarily May and June).
- Programs will not assist with 2020 future planting/production, they will be a lookback. Planting should be done for what the market is now, this is not intended to help future crops. This program is designed to address current losses.
- These programs will only apply to domestically produced crops and producers — not imported crops.
- These are anticipated amounts, not carve outs for each sector. They can vary depending on actual eligibility and applications
- Rates and commodities specifically have not been determined and are going through the OMB rule-making process.
SINGLE PAYOUT: Producers will receive a single payment determined using two calculations:
Price losses that occurred January 1 – April 15, 2020. Producers will be compensated for 85% of price loss during that period.
- Second part of the payment will be expected losses from April 15 through the next two quarters due to loss in demand related to COVID-19, 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.
A means (AGI) test will apply and only producers with an AGI of less than $900,000 are eligible unless 75% of their income or higher is derived from farming and ranching (then they are eligible).
*Note: while not specifically mentioned we are anticipating this to follow similar entity rules as the farm bill and MFP2.0 (i.e. an LLC is treated as one entity and limited, rather than the partners having separate limits)
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.
SMALL BUSINESS ADMINISTRATION: MORE MONEY IN PAYCHECK PROTECTION PROGRAM
Congress – this week they may try to pass something to put more money into the SBA assistance programs.
Supposedly the negotiations between democratic and republican leadership yielded a deal to allocate more money to this popular program.
We are hoping to see some dedication of Paycheck Protection Program money to actual community banks.
We are also hoping that new language will clarify that farms are eligible for the second SBA program, Economic Injury Disaster Loans.
There is a lot of pressure for Congress to do this this week. We will keep you updated.