House Dems' relief bill provides $16.5 billion in direct payments

Legislative Watch: House voting on HEROES Act; asking FEMA for depop help; pork indemnity sought; MCOOL reinstate request; more cattle on spot market.

P. Scott Shearer, Vice President

May 15, 2020

6 Min Read
U.S. Capitol Building
Getty Images/iStockphoto

The House of Representatives will vote later today on the House Democrats $3 trillion stimulus package, the "HEROES Act." The proposal provides additional support for agriculture, aid to state and local governments, health services, nutrition assistance, and another round of $1,200 stimulus checks.

Direct payments: The bill provides $16.5 billion in additional funds for direct payments for producers of livestock, specialty crops and other commodities. Producers who are eligible for the Coronavirus Food Assistance Program would receive additional payments to cover 85% of their losses in the second quarter of the year. Those not eligible for CFAP payments would receive payments for 85% of their losses for the first half of 2020 under the legislation.

Reimburse livestock and poultry producers: Livestock and poultry producers who have to euthanize market-ready hogs, cattle and poultry due to plant disruption because of COVID-19 would receive assistance. The USDA currently pays indemnities for depopulation of herds or flocks because of an illness, not healthy animals and poultry.

Dairy: The bill provides special assistance for dairy producers with small to mid-sized operations enrolled in a dairy insurance program. It establishes a dairy donation program to move surplus milk and other dairy products out of the market instead of farmers having to dump their milk.

Biofuels payment: The bill provides assistance to the hard hit ethanol industry. Biofuels plants would be eligible for payments of 45 cents per gallon for fuel produced from Jan. 1 to May 1. Plants that didn't produce for a month or longer are eligible for payments of 45 cents on half their production during the corresponding period in 2019.

Processing plants: It amends the Commodity Credit Corp. charter to give the Secretary of Agriculture the authority to provide aid to agricultural processing plants in the event of a public health emergency in order to assure the continuation of markets for agricultural commodities.

Nutrition: With the increasing unemployment rate, the bill provides an additional $10 billion for the Supplemental Nutrition Assistance Program to support anticipated increases in participation. Those currently receiving the minimum SNAP benefit of $16 per month would receive an amount set at $30. Also, an additional $1.1 billion is provided for the Women, Infants and Children program to be used for pregnant women or mothers with young children who have lost their jobs or laid off because of COVID-19. An additional $150 million would be provided for the Emergency Food Assistance Program to purchase agricultural products that would be donated to food banks and other nonprofit groups.

The bill will not go anywhere in the Senate. The Senate Republican leadership and the administration say it is time to slow down the process to determine how previous aid packages are working and with more states opening businesses to see what the needs will be in the future. Democrats will use the proposal as a starting point for discussions when the Senate and the administration decide to move forward with another aid package.

FEMA should help farmers depopulate animals
Congressman Collin Peterson (D-MN), chairman of the House Agriculture Committee, is asking Federal Emergency Management Agency to help producers euthanize and dispose of livestock by reimbursing their depopulation costs following the closure of meat plants as a result of the coronavirus pandemic and worker safety concerns.

In a bipartisan letter to President Trump, Peterson and a bipartisan group of Representatives asked the administration to provide "national guidance" allowing livestock depopulation and disposal expenses to be reimbursed through FEMA's Public Assistance program.

The members say, "Even as plants begin to reopen, meat and poultry plants are expected to operate below maximum capacity for the foreseeable future in order to maintain appropriate public health and worker safety precautions meaning that, unfortunately, depopulation will continue."

FEMA in the past has assisted producers with animal losses because of other natural disasters.

Indemnity support needed for pork producers during pandemic
A bipartisan group of 14 Senators led by Sen. Chuck Grassley (R-IA) is asking Senate and House leaders to fund in the next coronavirus aid package USDA programs that would assist pork producers who are being forced to depopulate herds due to closures of processing facilities.

The Senators in a letter to the leadership say, "The crisis is immediate. Pork producers send to market over two million pigs each week. If 20% of processing is idle, that means somewhere around 400,000 animals per week must be disposed of in some manner other than processing. Accordingly, government support is needed in the management of a sensible depopulation of the herd until plant operations stabilize."

The letter also says, "Given these significant social and economic consequences, we must prioritize funding to indemnify producers who are depopulating herds due to processing plant closures. Assistance is needed for humane euthanization and disposal which will require the coordination of the human, animal and environmental health communities."

Reinstate MCOOL for beef
A resolution was introduced in the Senate this week by Sens. Jon Tester (D-MT) and Mike Rounds (R-SD) requiring the U.S. Trade Representative to enter into trade negotiations necessary to implement mandatory country-of-origin labeling for beef.

Rounds says, "Mandatory country-of-origin labeling for beef fits within our discussions on how to improve food security, transparency for consumers and supply chain issues, all of which have been highlighted by the COVID-19 pandemic, threatening both producers and consumers."

MCOOL for beef and pork was repealed by Congress in 2015 after the World Trade Organization ruled against the United States. If MCOOL had not been repealed, Canada and Mexico would have been allowed to retaliate against U.S. products at a rate of $1.1 billion per year. The two countries still maintain the right to retaliate under the WTO ruling.

Spot market requirements for beef packers
Sen. Chuck Grassley and six other Senators have introduced legislation that would require beef packers who process more than 125,000 head per year to secure a minimum of 50% of their cattle they process weekly from the spot or open market. The requirement would be on a per-plant basis.

Grassley says, "The lack of transparency in cattle pricing isn't a new problem, but the negative effects of the fire in Holcomb, Kan., and COVID-19 have highlighted the need for additional price transparency measures to ensure producers are getting a fair price for the hard work of raising cattle."

The National Cattlemen's Beef Association in a statement opposing the legislation says, "Any solution must not restrict an individual producer's freedom to pursue marketing avenues that they determine best suit their business' unique needs. Government mandates, like that being proposed by Sen. Grassley, would arbitrarily force many cattle producers to change the way they do business."

Similar legislation has been introduced by Grassley in the past.

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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