USDA Announces $19 Billion in Aid to Farmers and Ranchers

U.S. Secretary of Agriculture Sonny Perdue announced the Coronavirus Food Assistance Program (CFAP). This new U.S. Department of Agriculture (USDA) program will take several actions to assist farmers, ranchers, and consumers in response to the COVID-19 national emergency.

President Trump directed USDA to craft this $19 billion immediate relief program to provide critical support to U.S. farmers and ranchers, maintain the integrity of the food supply chain, and ensure every American continues to receive and have access to the food they need, according to a USDA press release.

“During this time of national crisis, President Trump and USDA are standing with our farmers, ranchers, and all citizens to make sure they are taken care of,” Secretary Perdue said. “The American food supply chain had to adapt, and it remains safe, secure, and strong, and we all know that starts with America’s farmers and ranchers. This program will not only provide immediate relief for our farmers and ranchers, but it will also allow for the purchase and distribution of our agricultural abundance to help our fellow Americans in need.”

CFAP will use the funding and authorities provided in the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Families First Coronavirus Response Act (FFCRA), and other USDA existing authorities.

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The program includes two major elements to achieve these goals.

  • Direct Support to Farmers and Ranchers: The program will provide $16 billion in direct support 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. 
  • USDA Purchase and Distribution: USDA will partner with regional and local distributors, whose workforce has been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase $3 billion in fresh produce, dairy, and meat.
    The USDA will begin 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 distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy, and meat products to food banks, community and faith-based organizations, and other non-profits serving Americans in need.

The USDA will utilize other available funding sources to purchase and distribute food to those in need, said de agency.

  • USDA has up to an additional $873.3 million available in Section 32 funding to purchase a variety of agricultural products for distribution to food banks. The use of these funds will be determined by industry requests, USDA agricultural market analysis, and food bank needs.
  • The FFCRA and CARES Act provided an at least $850 million for food bank administrative costs and USDA food purchases, of which a minimum of $600 million will be designated for food purchases. The use of these funds will be determined by food bank need and product availability.

Tom Stenzel, president and CEO of United Fresh Produce Association, in a statement reacted to the USDA announcement saying that “the new $100 million per month purchase program is great and will be a major boost for both growers and distributors in the days ahead.”

But the payment program does not reach the level needed for many in their industry to survive, stressed Stenzel.

“Because USDA had received food industry requests for over $40 billion, they placed a maximum of $250,000 in payment to any one individual or entity. You and I both know that comes nowhere close to the actual damage in our sector,” said Stenzel. “The $250,000 limit is the same across all of agriculture – livestock, dairy, other crops and fruits and vegetables, so we were not treated differently from our brethren. But the impact of that limit is drastically different for our high-value crops. As an example, berries can cost more than $10,000 per acre to grow, compared with about $650 an acre to grow corn or soybeans. And that doesn’t include packing, marketing and distribution costs.”

Further details regarding eligibility, rates, and other implementation of these new funding programs will be released at a later date, said the USDA.