$16 bil. direct payments; $3 bil. purchases of ag products | More later
USDA announced the $19 billion Coronavirus Food Assistance Program (CFAP) to support farmers and ranchers during the Covid-19 pandemic, including:
· $16 billion in direct payments for farmers and ranchers, funded using the $9.5 billion emergency program in the CARES Act and $6.5 billion in Credit Commodity Corporation (CCC) funding.
· $3 billion in purchases of agriculture products, including meat, dairy and produce to support producers and provide food to those in need. USDA will work with local food and regional distributors to deliver food to food banks, as well as community and faith-based organizations to provide food to those 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. 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. 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.
Direct Assistance for Farmers and Ranchers
USDA will provide $16 billion in direct payments to farmers and ranchers including:
· $9.6 billion for the livestock industry
o $5.1 billion for cattle
o $2.9 billion for dairy
o $1.6 billion for hogs
· $3.9 billion for row crop producers
· $2.1 billion for specialty crops producers
· $500 million for other crops
Producers will receive a single payment determined using two calculations:
· Price losses that occurred January 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.
USDA is expediting the rule making process for the direct payment program and expects to begin sign-up for the new program in early May and to get payments out to producers by the end of May or early June.
On top of these targeted programs USDA will utilize other available funding sources to purchase and distribute food to those in need.
- 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.
More information later.