USDA Secretary Tom Vilsack has a history of making key announcements during visits, and that was the case during his appearance at the American Farm Bureau Federation’s annual meeting in Puerto Rico. Some of them:
Ag disaster aid: ERP Phase 2. Vilsack announced Phase 2 of the Emergency Relief Program (ERP) which will provide help to producers for production and quality losses of eligible crops, utilizing calculations of a producer’s decrease in gross revenue. USDA said in documentation on file at the Federal Register (link) that using that approach will reflect the losses “without requiring the more extensive calculations and documentation required under previous programs” for disaster-related crop losses. USDA said this streamlines the aid to minimize the burden on producers and processing of applications by county FSA offices. Using that process also means it will address losses for a qualifying disaster event whether it happened before or after harvest. ERP Phase 2 will be available for a decrease in gross revenue in 2020 or 2021, primarily to those with losses not covered by Federal Crop Insurance or the Noninsured Assistance Program (NAP). The application period is Jan. 23-June 2. USDA has already paid out $7.31 billion under ERP Phase 1 as of Jan. 8, up from $7.28 billion the prior week, including $6.23 billion for non-specialty crops ($6.21 billion prior) and $1.09 billion for specialty crops ($1.08 billion prior). A total of $10 billion was earmarked for ERP.
USDA projects outlays for ERP Phase 2 payments will be $1.2 billion and will likely be pro-rated as USDA projects total gross outlays at $1.5 billion.
Comments on Phase 2 announcement. Phase I was highly successful and it worked well. Phase 2 has tons of problems. Comparing schedule F in relevant years to past years doesn’t reflect losses. A farmer may have had to sell land or livestock when they didn’t want to. They may have sold a previous year’s crop in the year in question. These and other things skew the schedule F. There is also the issue of forcing farmers to share schedule F info with local FSA offices.
- Pandemic assistance: PARP. Vilsack announced the Pandemic Assistance Revenue Program (PARP), payments for producers that suffered a 15% or greater decrease in allowable gross revenue for the 2020 calendar year compared with either 2018 or 2019. This effort, Vilsack said, aims to “fill in gaps” for losses covered by either Phase 1 or Phase 2 of ERP. The payments will have a factor of 80% (90% for underserved farmers and ranchers) and will be reduced by 2020 ERP payments, and pandemic assistance under either the Coronavirus Food Assistance Program (CFAP) 1 or 2 and other pandemic aid. Payments will be limited to $125,000 per person or entity and USDA may set a lower maximum payment amount per person if total payments exceed available funding and USDA expects that to be the case — PARP outlays are projected at $250 million with gross outlays pegged at $2.66 billion.
- Expanding other ag aid efforts. USDA also will expand payments under prior efforts such as CFAP 2 and others. The total payments USDA projects under the ERP Phase 2, PARP and expanded other programs is $1.82 billion with gross amounts at $4.54 billion.
- U.S. fertilizer production. USDA will seek public comment on 21 potentially viable projects totaling up to $88 million to boost U.S. fertilizer production via the first round of USDA’s Federal Production Expansion Program, a $500 million effort announced earlier this year. The projects are in Alabama, Arizona, Colorado, Florida, Iowa, Louisiana, Massachusetts, Minnesota, Missouri, Montana, Ohio, Oregon, Texas, Washington, and Wisconsin. USDA is seeking comments through Feb. 8 on the environmental impacts of the projects.
- Meat and poultry processing. Vilsack announced three projects in Ohio, Michigan and Minnesota which will expand independent meat and poultry processing capacity via the Meat and Poultry Processing Expansion Program. The projects total $12 million. The projects are in addition to other recently announced efforts in the sector.
— Key comments from Vilsack at Farm Bureau confab:
- He praised farmers for responding to the need to shore up the global food supply in the wake of disruptions created by Russia’s Feb. 24 invasion of Ukraine — despite challenges it created including driving up already lofty prices for key inputs like fertilizer. “Through it all, you still continue to produce, and you produce in a market that oftentimes finds you with limited market opportunities. It’s an incredible story of resilience.
- Farm income: Despite record farm income the past two years, data from USDA’s Economic Research Service (ERS) show that most U.S. farm households continue to rely on things besides farming as their primary source of income. “We’ve looked for ways in which we can encourage and increase the number of revenue streams available to farmers, so that they not only can benefit from the sale of crops or the sale of livestock, but that they have other additional revenue streams available to them,” he said. Vilsack noted USDA’s $3.1 billion Partnerships for Climate Smart Commodities (PCSC) climate-smart ag and forestry pilot project grant funding effort as one example… “a new revenue stream that will lead to more productive soil cleaner water and more efficient use of those important resources.”
- Sustainable Aviation Fuel (SAF). Vilsack talked about initial moves to help the fledgling SAF market get off the ground.
- Expansion of meat and poultry processing facilities or building new ones where processing capacity is lacking. “We’re excited about this opportunity for better bargains and better choices for consumers and better income for farmers,” he said, adding that USDA plans to announce an expansion of the concept to efforts that aim to increase processing for non-meat and poultry processing during the first half of this year.
- Initial project funding under domestic fertilizer: “We wanted to make sure that in establishing this initiative that we focused on independently owned entities, focused on entities that would make product in America that would focus on next gen and innovative approaches that would be sustainable, and most importantly, of all, would be farmer focused. To make sure that we’re hitting the mark, we’re making these 21 potential viable projects public, and soliciting public comment any concerns or issues that folks may have, as we are conducting the environmental reviews before making the final announcements.”
Next farm bill: Vilsack made a few comments on the next farm bill, including the recent funding of nearly $20 billion in conservation programs under the Inflation Reduction Act (IRA), and their potential to boost climate-smart and sustainable agriculture. “We provided a tremendous opportunity to not only expand on these opportunities with the Inflation Reduction Act resources under the conservation title of that historic act, but also during the course of the discussions about our Farm Bill,” he said. “I appreciate there’s been a conversation here at Farm Bureau about the importance of that farm bill, the need to educate new members of Congress about its importance, and certainly appreciate the acknowledgement that it will be important and necessary for us to continue to link the nutrition aspect of the farm bill and the other aspects of it together to ensure the best chance of getting a new farm bill in 2023,” Vilsack said.
As for what he hopes to see in the next farm bill, Vilsack urged a focus on expanding marketing opportunities. “We want to create the opportunity for farmers not just to depend on a commodity market, that can change on a whim, to be able to have three, four, five or six different profit centers operating out of their farm to create from those profit centers processing jobs and manufacturing jobs in rural communities,” he said.