House Democrats released a massive new coronavirus relief bill that would provide $16.5 billion in additional direct payments to farmers and authorize USDA to compensate producers who have to dispose of livestock and poultry that can’t be sold because of processing disruptions. 

The HEROES Act, which the House is expected to vote on Friday, also would provide special assistance targeted toward dairy producers and fruit and vegetable growers as well as biofuel plants and textile mills. The bill would cost more than $3 trillion, eclipsing the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted in March

In addition to paying for disposal of livestock and poultry — pork producers have been hit especially hard by packing plant shutdowns — the bill also would allow USDA to assist agricultural processing plants to “ensure supply chain continuity during an emergency period.’’

The $16.5 billion earmarked for direct farm payments would be designed to both supplement $16 billion in payments that USDA is expected to send out in late May or June under its Coronavirus Food Assistance Program and to also provide relief to farms that aren’t eligible for the first round. 

Chicken producers, for example, will be left out of the first round of CFAP payments. 

The bill also would direct USDA to account for price differences among commodities based on location, specialized varieties and farming practices, including commodities that are certified organic. 

The bill’s new spending would come on top of the $23.5 billion provided by the CARES Act. USDA is using $9.5 billion from that law to make the CFAP payments. The rules for the program haven’t been released but the payments are expected to be cover a larger portion of losses before April 15 than afterward. 

For the dairy industry the new bill includes the following provisions:

  • Provide supplemental margin coverage to small-and mid-size dairies based on the difference the farms’ 2019 production and their production history under the Dairy Margin Coverage program. The bill also would encourage dairy farms to commit to participating in DMC for 2021-2023 by providing a payment worth 15% of annual premium costs. 
  • Authorize a program for donating dairy products to feeding programs. Milk used for donated products would be reimbursed at fluid milk prices.
  • Authorize recourse loan program for dairy processors, packagers, marketers, wholesalers and distributors. 

The bill also includes:

  • $100 million via Specialty Crop Block Grants to states to address supply chain issues.
  • $50 million to support local farmers, farmers markets, and other local food outlets who are affected by COVID-19 market disruptions. 
  • $50 million to support beginning farmers and ranchers with financial, operational, and marketing advice in this difficult market. 
  • $28 million in block grants to state departments of agriculture for use to support existing farm stress programs. 

Biofuel plants would be eligible for payments of 45 cents a gallon for fuel produced from Jan. 1 to May 1. For plants that were unable to produce for a month or more they could get payments of 45 cents on half their production during the corresponding period in 2019. 

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The bill also replenishes the Small Business Administration’s Economic Injury Disaster Loan program, which offers farms and other businesses grants of up to $10,000, and ensures that Paycheck Protection Program loan recipients can write off expenses covered by the forgivable loans. The PPP loans don't have to be paid back if at least 75% of the proceeds are used to to retain or rehire workers. 

The bill also provides additional funding for feeding programs, including a temporary 15% increase in Supplemental Nutrition Assistance Program benefits and a $30 a month increase in the minimum SNAP benefit. The bill also waives SNAP work requirements and bars USDA from implementing three rules that would reduce eligibility or benefits.

Senate Majority Leader Mitch McConnell, R-Ky., quickly rejected the overall House bill as too expansive, but didn't rule out doing another coronavirus relief measure. He didn't address the agricultural spending in the House bill. 

Republicans are "assessing the effectiveness" of previous bills "before deciding to go forward," he said. 

He went on, "This is not a time for aspirational legislation. This is a time for a practical response to the coronavirus pandemic. We’re going to insist on doing narrowly targeted legislation ... that addresses the problems."

Read the bill text here and a summary here

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