Congressional leaders reached agreement Sunday with the White House on a $900 billion COVID-19 relief package that will include a new round of aid to a wide array of agriculture sectors while also ensuring the deductibility of expenses used to get forgiveness of Paycheck Protection Program loans.
The package provides detailed instructions on how the Agriculture Department is to spend most of the $13 billion provided in agriculture aid, including a third round of payments under the Coronavirus Food Assistance Program.
All row crop producers would be provided payments totaling $5 billion, and another $3 billion is set aside for payments to cattle producers, contract livestock and poultry growers, dairy farms, and producers who were forced to euthanize livestock or poultry due to disruptions in processing plants. Ethanol and biodiesel producers also would be eligible for payments. According to the Senate Agriculture Committee, the payments to row crop producers would be worth $20 an acre.
The package, which also would provide a new round of stimulus checks to Americans of up to $600 per person, was combined with a $1.4 trillion fiscal 2021 funding bill for the federal government and a two-year authorization bill for waterway and harbor projects. Also included is a package of tax incentive extensions. The text of the nearly 5,600-page bill can be downloaded here. A summary of the COVID package is here.
“As our citizens continue battling this coronavirus this holiday season, they will not be fighting alone,” said Senate Majority Leader Mitch McConnell, R-Ky., announcing the deal on the Senate floor Sunday evening.
The COVID package's ag provisions include $400 million for a new Dairy Donation Program that would reimburse companies for the processing costs of donated products as well as the cost of the milk.
Small and medium-size dairy producers also would receive supplemental Dairy Margin Coverage payments based on the difference between a farm's 2019 actual production and DMC production history.
In an effort to expand meat and poultry processing capacity, the bill would provide $60 million in grants to small companies to help them qualify for federal inspection and begin to sell their product across state lines. The legislation also requires a report on the availability of financing for new processing capacity.
A federal livestock dealer trust would be established by the legislation to ensure that livestock producers are paid for their animals.
The package also earmarks $100 million to the Specialty Crop Block Grant program, which funds state assistance to fruit, vegetable and nut producers, and another $100 million to the Local Agriculture Market Program.
Senate Agriculture Committee Chairman Pat Roberts, R-Kan., told Agri-Pulse that because of the pending change in administrations the legislation restricted how the USDA could spend the money.
“You’ve got Sonny saying adios, and you’ve got Tom coming in. I don’t want to give this baby to the secretary to run,” said Roberts, referring to outgoing Agriculture Secretary Sonny Perdue and President-elect Joe Biden's pick to replace him, Tom Vilsack. “We should be making those decisions, not (the secretary),” Roberts said.
The top Democrat on the Agriculture Committee, Debbie Stabenow, secured $1.5 billion for implementing elements of a bill she introduced this spring, The Food Supply Protection Act. The money would fund worker protection measures, food distribution to the needy, and assistance to farmers, farmers markets, and food processors that have needed to retool to respond to COVID-19.
The bill also includes $13 billion for nutrition assistance, including a 15% increase in Supplemental Nutrition Assistance Program benefits for six months, a top priority for Stabenow. The package would exclude jobless benefits from counting as income when determining SNAP eligibility and benefits.
"After many months of pushing for a critical SNAP increase and other funding to address the hunger crisis in our country, I am very pleased that we finally reached a bipartisan agreement that will help both families and farmers in need. Farmers will receive the support they need to keep their farms and businesses going," Stabenow said.
Another $400 million is earmarked for the Emergency Food Assistance Program, known as TEFAP, which funds the distribution of commodities through food banks.
The agreement also includes $7 billion to expand broadband access. The package would provide $300 million for rural broadband, $250 million for teleheatlh and authorize a new emergency broadband benefit to help students, families and unemployed workers afford high-speed internet service during the pandemic.
Deductibility of PPP expenses is a major concern of farms and other small businesses that qualified for forgiveness on the loans. The Internal Revenue Service has taken the position that the expenses couldn’t be deducted on tax returns, but Treasury Secretary Steven Mnuchin ultimately backed down.
“Most people who got those PPP loans had an expectation they would continue to be able to deduct their business expenses and operate accordingly,” said Senate GOP Whip John Thune, R-S.D.
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Businesses with ongoing revenue problems would be allowed to apply for a second round of PPP funding.
To facilitate COVID-19 immunizations, the package includes $20 billion for purchasing additional vaccines and $8 billion for vaccine distribution. There also is $20 billion to assist states with coronavirus testing.
Senate Minority Leader Charles Schumer, D-N.Y., blamed Republicans for the package not getting finalized until the final days of the lame duck session.
“The agreement on this package could be summed up by the expression ‘better late than never,’ although I know many of my Republican colleagues wished it was never," Schumer said.
The biggest snag in the final days of the negotiations was over Republicans demands for restrictions on the Federal Reserve’s emergency powers.
The massive bill was not expected to clear Congress until Monday. House Minority Leader Kevin McCarthy, R-Calif., said he expected the majority of House Republicans to support it. After the COVID package was announced, the House promptly passed a one-day stopgap spending bill to keep the government funded through Monday. The Senate approved the measure as well.
The water projects authorization bill that was being added to the massive legislation includes a funding change that could accelerate the reconstruction of locks and dams and other waterway projects.
