Sign-up for CFAP payments begins May 26

Legislative Watch: $16B to offset COVID-induced losses; end packing discrimination; end to beef imports?; seeking meat plant liability protection; ensure meat worker safety.

P. Scott Shearer, Vice President

May 22, 2020

6 Min Read
Piggy bank buried in hundreds
Getty Images/iStockphoto

USDA announced sign-up will begin May 26 for the Coronavirus Food Assistance Program which will provide $16 billion in direct payments for producers affected by coronavirus. The payments are to help offset the losses in sales or market value between January and April. Hog, cattle, dairy, corn and soybean producers should receive the largest share of the CFAP payments.

Producers will receive two payments. The first payment would be for 80% of a producer's maximum total payment upon approval of the application. The remaining 20% would be paid at a later date when funds are available.

USDA's press release says:

"Livestock eligible for CFAP include cattle, lambs, yearlings and hogs. The total payment will be calculated using the sum of the producer's number of livestock sold between Jan. 15 and April 15, multiplied by the payment rates per head, and the highest inventory number of livestock between April 16 and May 14, multiplied by the payment rate per head.

"Non-specialty crops eligible for CFAP payments include malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat and hard red spring wheat. Wool is also eligible. Producers will be paid based on inventory subject to price risk held as of Jan. 15, 2020. A payment will be made based on 50% of a producer's 2019 total production or the 2019 inventory as of Jan. 15, whichever is smaller, multiplied by the commodity's applicable payment rates.

"Payment limitation will be $250,000 per person or entity for all commodities combined for CFAP. A producer will have to certify they meet the Adjusted Gross Income limitation of $900,000 unless at least 75% or more of their income is derived from farming, ranching or forestry-related activities. Livestock and specialty crop groups actively advocated for an increase in payment limitations after a $125,000 payment limitation was suggested."

USDA expects that some commodities left out of the program could be added at a later date if they are able to provide the data needed to prove they were harmed.

Click here for details on rules, eligible commodities and payments rates.

Investigate market-ready hogs discrimination
Congressman Jim Hagedorn (R-MN) is asking the USDA to investigate alleged favoritism by packers in processing packer-owned hogs over hogs from independent producers.

In a letter to Secretary of Agriculture Sonny Perdue, Hagedorn says the closure and disruption in packing plants because of the coronavirus pandemic has created a backlog in processing hogs. Thus, producers are having to euthanize millions of hogs. He says it had come to his attention "packing plants may be engaging in discriminatory actions against independent family farmers by prioritizing the processing of packer-owned hogs."

Hagedorn says USDA statistics showed between Jan. 10 and May 8, packer-owned hogs sold into the market increased from 34.1% to 41.5% or an increase of 7.4%, while producer-sold hogs dropped from 61.6% to52.8% or a drop of 8.8%.

He is asking the USDA to ensure proportionate processing of hogs.

Trump advocates ending cattle imports
President Trump suggests that the United States should consider terminating trade agreements that obligate the United States to import cattle. He suggests exempting a country if they have been an ally or a "great" friend. The United States imports live cattle only from Canada and Mexico under the North American Free Trade Agreement which will be replaced with the U.S.-Mexico-Canada Agreement this July.

The United States over the last 10 years have exported $15 million more in beef than we have imported. If we start erecting barriers other countries will do the same.

Earlier the governor of North Dakota, Doug Burgum, wrote USDA suggesting a 30-day suspension on the importation of Canadian hogs and cattle.

Liability protection for meat plants
Legislation, the "Protecting Protein Production and Consumers Access Act," has been introduced by Congresswoman Vicki Hartzler (R-MO) that would provide expanded liability protection for meat processing facilities mandated to operate under President Trump's executive order.

Hartzler says the legislation would "support the stability and long-term viability of our farmers and ranchers, protects the jobs of hardworking individuals who provide these critical services and rely on their jobs in these plants for their paychecks, and protects every American's access to safe and affordable beef, pork and poultry products."

According to Hartzler, the legislation would protect meat processing facilities from frivolous lawsuits only if the claims are not caused by:

  • An act constituting willful or criminal misconduct,

  • Gross negligence by the meat processing facility,

  • Reckless misconduct,

  • Conscious flagrant indifference to worker safety guidelines.

Senate Republicans are insisting that liability protection for businesses and universities be included in the next coronavirus assistance package.

Ensure meat plant worker safety
A group of 29 Senate Democrats have written Secretary of Agriculture Sonny Perdue raising concerns about the administration's executive order to reopen meat processing plants "without verifying the necessary safety measures" to protect workers and the food supply. The Senators outlined recommendations for ways the administration should improve worker safety.

The Senators say, "While we recognize the importance of keeping these plants running, it is wrong and shortsighted to use the Defense Production Act to mandate plants to stay open without effectively addressing worker safety issues. Prematurely reopening or pressuring unsafe plants to stay open could expose employees to COVID-19. This could then sicken more workers and their families, spread the virus in their communities, and cause further damage to our food supply chain, farmers and ranchers, and rural economies."

The Senators recommended USDA:

  • "Create localized working groups for individual plants that include USDA, Centers for Disease Control and Prevention, Occupational Safety and Health Administration, companies, union representatives, workers and appropriate state and local authorities to implement plans to safely reopen and ensure all issues are addressed.

  • Advocate for the creation of a White House-led office of supply chain coordination as recommended by 20 key organizations.

  • Ensure that all meat processing facilities operate in accordance with the OSHA and CDC guidance for meat and poultry processing employees.

  • Clarify that the president's executive order does not require meat processing plants to stay open, and the plants should only operate in accordance with the OSHA and CDC guidelines and any other requirements from state or local authorities.

  • Use the Defense Production Act and other contracting authorities to access and produce personal protective equipment and testing.

  • Urge OSHA to vigorously enforce the OSHA and CDC guidance under the General Duty Clause of the Occupational Safety and Health Act at meat and poultry processing plants.

  • Urge U.S. Labor Secretary Eugene Scalia to immediately issue and enforce an OSHA Emergency Temporary Standard that requires employers to protect their workers from the spread of COVID-19 in workplaces."

The letter was organized by Sen. Debbie Stabenow (D-MI), ranking member of the Senate Agriculture Committee.

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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