April 20, 2020
USDA rolls out $19-billion COVID-19 recovery program
A massive relief package outlined Friday night includes $16 billion in direct payments to livestock producers, fruit and vegetable growers and other sectors, plus $3 billion in commodity purchases.
Agriculture Secretary Sonny Perdue told reporters Friday he wants USDA to get the direct payments out the door by the end of May.
As for the commodity purchases, the Agricultural Marketing Service announced Sunday that it will issue a solicitation in the next two weeks to invite proposals to supply commodity boxes to non-profit organizations on a recurring schedule. AMS is committed to buying every month $100 million in fresh produce, $100 million in dairy products and $100 million in meat products.
$2.7 billion will go directly to the fruit and vegetable industry, including $600 million in food purchases over the next six months. Western Growers responded that “while this amount is not as low as we feared, it is clearly not enough by a long shot.” The group called the cap on direct payments a “serious problem.” California Citrus Mutual and many other groups are also pushing back on the cap.
Western Growers also worried about winter vegetable growers in the Imperial Valley not having access to direct payments, “since desert vegetable crops are already lost.”
Take note: USDA officials briefed congressional aides on Saturday but didn’t confirm some key payment details that were in a press release issued by Sen. John Hoeven, R-N.D., sources tell Agri-Pulse. Hoeven, for example, said producers will be compensated for 85% of price loss through April 15 and 30% for expected losses through the next two quarters.
USDA officials did confirm to Hill staff that there would be payment limits of $125,000 per commodity with an overall limit of $250,000 per individual.
Read our full report on the aid package here.
Keep in mind: The total amount of the aid package – $19 billion – is far below what commodity groups said they needed. But the number is close to the $20-billion estimate of the damage to U.S. agriculture during the crisis, by the University of Missouri’s Food and Agriculture Policy Research Institute.
That’s no accident. Perdue said USDA economists consulted with FAPRI in estimating the needed aid.
USDA will have another $14 billion available for its Commodity Credit Corp. account starting in July.
Perdue ruled out reopening Dairy Margin Coverage. The National Milk Producers Federation pushed Perdue to give dairy farmers another chance to enroll in DMC this year. But Perdue, as expected, said it would set a bad precedent to let producers wait to sign up for the program until they knew they had a loss.
Sen. Brian Dahle, R-Bieber
State sends $20 million to food banks, but Dahle pushes for direct farm aid
During a State Senate hearing last week on the governor’s crisis response, lawmakers covered a broad range of topics. Among them was $20 million the administration is spending on purchasing and distributing food through local food banks.
The Department of Social Services will purchase 900,000 food boxes to go to 50 food banks serving all counties. The department has said it is moving quickly as grocers make large purchase orders to meet demand. It has tapped the California Association of Food Banks for added capacity to move, store and deliver a large amount of food.
Republican Senator Brian Dahle of Lassen County, however, was concerned about disruptions to the commercial food supply chain, but did not have specific recommendations.
“In my district and as somebody in the agriculture business, (farmers) have been left out,” he said. “I know CDFA is talking with farmers to donate. But we have to look at the pipeline and make sure they're made whole.”
Keep in mind: Industry groups had been working with the administration on purchasing food from California farmers for food banks. With Newsom’s allocation and the USDA announcement Friday, the conversation is now shifting to infrastructure issues.
Food banks are challenged with moving far more product than their programs were designed to handle, as refrigeration units and other storage options reach capacity.
Truckers get more food access at rest stops
Gov. Newsom has cleared hurdles for food truck vendors to operate at rest stops, throwing a lifeline to truckers, who are considered an essential workforce but face limited food options on the road during the lockdown.
The executive order issued Friday suspends Caltrans regulations for 60 days to allow temporary permits for commercially licensed food trucks.
Tom Steyer
Launching economic task force, Newsom skips production ag
Newsom has assembled a list of dozens of industry and labor leaders for his new Task Force on Business and Jobs Recovery. His chief of staff is chairing the task force alongside former presidential candidate and hedge fund billionaire Tom Steyer. The group also includes the lieutenant governor and democratic and republican legislative leaders.
“We will use a gradual, science-based and data-driven framework to guide our re-opening timing while planning our economic recovery,” said Newsom.
As far as the food supply chain, Newsom has recruited the heads of associations for restaurants and grocers, a Napa winery and a producer of Mexican frozen foods. He has also included the president of United Farm Workers, a group that has successfully lobbied the governor to increase farmworker sick leave benefits during the outbreak. Yet the list does not include agricultural leaders.
Keep in mind: Steyer and his wife, Kat Taylor, have been prominent voices in advocating for organic and sustainable agricultural practices. They also own an 1,800-acre cattle ranch near the Bay Area.
AND IN MORE NATIONAL NEWS…
Ag sector got $4.4B from PPP
Money is already moving to farms and agribusiness operations through the Paycheck Protection Program, which is now out of money due to an ongoing impasse on Capitol Hill. The latest data from the Small Business Administration shows that some $4.4 billion in forgivable loans have been approved for 46,334 businesses in the agriculture, forestry, hunting and fishing sector.
There were a number of issues that slowed farmer signup for the program, including a delay in signing up Farm Credit associations for the program and a question about whether Schedule F earnings could count as self-employment income.
Republicans have been pushing to add $250 billion to the program, and there are ongoing negotiations about addressing Democratic priorities. Senate Minority Leader Chuck Schumer said on CNN Sunday that Democrats are also working to make sure more PPP funds go to “the rural areas, to the minority areas, to the unbanked.”
Dems press for rural task force
Democratic lawmakers led by Sen. Amy Klobuchar of Minnesota are asking Secretary of Agriculture Sonny Perdue to create a rural COVID-19 task force.
“Agricultural producers and processors have less cash flow due to price declines, lack of market opportunities, and an already stretched workforce being squeezed by positive COVID-19 tests,” says a letter the senators and House members sent to Perdue.
The task force would consist of experts and representatives from all sectors of rural areas, including agriculture, health care, and the private sector. The goal is to identify rural challenges, develop strategies and policy recommendations, and provide oversight of distribution of funding.
Block grant idea pushed for next stimulus
Wisconsin Democratic Sen. Tammy Baldwin is working with the National Association of State Departments of Agriculture on a plan to provide grants to states to address a variety of pandemic-related needs, including safety equipment for workers in the food supply chain.
The Food and Agriculture Emergency Block Grants also could help businesses reprocess food service-scale products to family-sized packages and help connect businesses with new customers and prevent the waste of food. Baldwin’s goal is to get the idea included in an upcoming COVID-19 relief bill.
In a letter to President Donald Trump and Treasury Secretary Steven Mnuchin seeking support for the idea, Baldwin said the funding “should be prioritized in accordance with a state’s contributions to the local, regional and national food supply.”
Take note: NASDA “strongly supports such an approach as a way for states to rapidly respond to urgent and emerging issues in the agriculture economy and food supply chain at this time,” NASDA CEO Barb Glenn tells Agri-Pulse.
He said it:
“Unfortunately, all of that positive work is now being unraveled by (the Newsom) administration. The governor's office appears to be shifting hard to the left after Bill Lyons, the solutions-oriented former ag liaison, departed.” – Citrus Mutual President Casey Creamer, in a statement opposing the governor’s path forward on operating the State Water Project pumps separately from Central Valley Project operations.
Ben Nuelle and Bill Tomson contributed to this report.
Comments? Questions? Tips? Email comments to brad@agri-pulse.com.
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