Call to eliminate CFAP payment limits for livestock producers

Legislative Watch: Limits have negative impact; $16B in direct assistance; USDA to purchase, distribute food; meatpacker protection urged; more small biz aid.

P. Scott Shearer, Vice President

April 24, 2020

5 Min Read
Midwestern U.S. farm with a hog barn
National Pork Board

A bipartisan group of Representatives and Senators is calling on President Trump to eliminate the payment limitations requirement for livestock, dairy and specialty crop producers under the recently announced Coronavirus Food Assistance Program assistance program. Agricultural and livestock groups are concerned if payment limitations stay in place it will negatively impact many hard-hit producers.

In a letter to President Trump, 136 Representatives say, "However, we are concerned about the $125,000 per commodity and $250,000 per individual or entity payment limits as it relates to assistance for the livestock, dairy and specialty crop sectors. This limitation would severely restrict the program's effectiveness for many family-owned farms and ranches across the nation. We strongly urge you to eliminate payment limits for livestock, dairy and specialty crop producers before the final CFAP program details are announced."

The House letter was organized by Congressmen Jimmy Panetta (D-CA) and Mike Simpson (R-ID). A similar Senate letter signed by 20 Senators was organized by Sens. Jerry Moran (R-KS) and Dianne Feinstein (D-CA).

Opponents of the payment limitations include the American Farm Bureau Federation, National Cattlemen's Beef Association, National Pork Producers Council, National Milk Producers Federation and Western Growers Association.

USDA to provide $16 billion in direct assistance
USDA's $19 billion Coronavirus Food Assistance Program will provide $16 billion in direct payments to producers and $3 billion in purchases of agricultural products for food banks and community and faith-based organizations to provide food to those in need. The funding is from the earlier approved Coronavirus Aid, Relief and Economic Security Act package and Commodity Credit Corp. funding.

USDA says the direct payments will be "based on actual losses for agricultural producers where prices and market supply chains have been impacted and will assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19."

In a press release, Sen. John Hoven (R-ND), chairman of the Senate Agriculture Appropriations Subcommittee, says USDA's announcement includes:

Direct assistance: the direct assistance to farmers and ranchers will include:

  • $9.6 billion for the livestock industry

    • $1.6 billion for hogs

    • $5.1 billion for cattle

    • $2.9 billion for dairy

  • $3.9 billion for row crop producers

  • $2.1 billion for specialty crops producers

  • $500 million for others crops

Producers will receive a single payment determined using two calculations.

  • Price losses that occurred Jan. 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, 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.

The USDA has to go through the rule-making process for the direct payment program. It expects to begin sign-up for the new program in May and to send out payments to producers by the end of May or early June.

Food purchases and distribution provided
The USDA will purchase $3 billion of fresh produce, dairy and meat with the procurement of 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.

The USDA will partner with regional and local distributors who will provide a pre-approved box of fresh produce, dairy, meat and poultry products to food banks, community and faith-based organizations, and other non-profits serving Americans in need.

Union calls for action to protect meatpacking workers
With the increasing number of meatpacking employees testing positive for COVID-19, the United Food and Commercial Workers International Union is calling on the USDA to take immediate action to protected meatpacking workers.

The UFCW in a letter to Secretary of Agriculture Sonny Perdue outlined five steps needed.

  • Prioritize essential workers for testing which would include those in meatpacking and food processing.

  • Immediate access to personal protective equipment.

  • Immediate halt on-line speed waivers.

  • Mandate social distancing where possible.

  • Isolate workers who show symptoms or test positive for COVID-19.

Earlier Sen. Debbie Stabenow (D-MI), ranking member of the Senate Agriculture Committee, and 35 Senators sent a letter to Vice President Mike Pence asking the administration to take action to ensure the safety of the nation's food supply and protect essential works in the food supply chain.

More aid for small businesses and farms
Congress passed additional assistance for small businesses, farms, health care providers and coronavirus testing. The Small Business Administration had run out of funds for the Paycheck Protection Program which provides assistance to small businesses.

The $484 billion aid package signed by President Trump includes $310 billion for SBA's PPP loan program, $50 billion for SBA disaster relief loans, $10 billion for the SBA Emergency Economic Injury Disaster emergency grants, $75 billion for health care providers and $25 billion for COVID-19 testing.

The compromise allows farms to participate in the SBA's EIDL Loan program. This program is for businesses with less than 500 employees experiencing a temporary loss of revenue in which they can receive a grant for $10,000 and borrow up to $2 million.

Congress is expected to consider another larger coronavirus stimulus package next month.

Source: P. Scott Shearer, who is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

About the Author(s)

P. Scott Shearer

Vice President, Bockorny Group, Inc.

Scott Shearer is vice president of the Bockorny Group Inc., a leading bipartisan government affairs consulting firm in Washington, D.C. With more than 30 years experience in government and corporate relations in state and national arenas, he is recognized as a leader in agricultural trade issues, having served as co-chairman of the Agricultural Coalition for U.S.-China Trade and co-chairman of the Agricultural Coalition for Trade Promotion Authority. Scott was instrumental in the passage of China Permanent Normal Trade Relations and TPA. He is past chairman of the USDA-USTR Agricultural Technical Advisory Committee for Trade in Animals and Animal Products and was a member of the USAID Food Security Advisory Committee. Prior to joining the Bockorny Group, Scott served as director of national relations for Farmland Industries Inc., as well as USDA’s Deputy Assistant Secretary for Congressional Affairs (1993-96), serving as liaison for the Secretary of Agriculture and the USDA to Congress.

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