Show me the money…again
As the country begins to “reopen” and markets creep only slightly higher, as President Trump and Secretary of State Pompeo take turns slamming China even as that nation moves to make good its “phase one” ag purchasing obligation, as USDA rolls out the rules of the road on dispensing ag economic stimulus direct payments already blessed by Congress and the White House, and as administration officials hint even more federal payouts are coming, the naysayers are emerging just as Congress takes its spring break without resolving “phase four” of the COVID 19 bailout effort.
This litany proves the more things change, the more things stay the same, especially in an election year.
A general sigh of relief was heard across the Farm Belt this week as USDA finally announced May 26 is the date it will begin accepting applications through the Farm Service Agency (FSA) from producers who’ve suffered at least a 5% loss during January through mid-April attributable to the pandemic. Farmers must also be facing “significant marketing costs as a result of lower demand, surplus production and disruptions to shipping patterns and the orderly marketing of commodities” This is the core of the $16-billion Coronavirus Food Assistance Program (CFAP) brought to you through the $2-plus-trillion CARES Act enacted at the end of March.
Nevertheless, just about everyone involved, from the Agriculture Secretary to most commodity groups, says $16 billion is just not enough money. Last week’s $3-trillion House-approved HEROES Act carries $16.4 billion more for agriculture – far short of the $50 billion in farm help a bipartisan lawmakers’ group is calling for – but HEROES won’t fly in the GOP-controlled Senate. Senate Majority Leader Mitch McConnell (R,KY) this week said he won’t entertain a bill with a price tag north of $1 trillion. Some talks between parties and chambers have commenced, but it will be late June at the earliest before the next round of federal largesse is approved.
Without getting into details of the how much, why and the when of CFAP, ably reported elsewhere on this site, suffice it to say farmers who produce corn, wheat, soybeans, malting barley, canola, cotton, millet, oats, sorghum, sunflowers, wool, cattle, lambs, yearlings, hogs, dairy, a host of “specialty crops,” i.e. fruits and vegetables, almonds, and just about any other crop grown for human consumption can apply for the program. USDA said some wheat, rice and peanut growers won’t qualify because their prices didn’t fall at least 5% this year, but the department said it may “reconsider” if farmers can demonstrate true and deep market pain. While hemp and tobacco farmers are out of the running altogether, a full list of covered commodities, payment rates, etc., is on the farmers.gov/cfap website.
There’s a $250,000 per person/entity payment limitation for commodities combined, but no per-commodity limit as surmised earlier. Applicants must prove they meet the adjusted gross income limitation of $900,000 “unless at least 75% or more of their income is derived from farming (or) ranching…” This weeds out so-called “investor farmers.” Evidence of conservation compliance will be required in some cases.
FSA will start taking applications next week and the last day to apply is August 28. FSA has tweaked the process to allow producers to provide certain documents and certifications post-application. However, to make sure the money doesn’t run out before the application period ends, farmers will get 80% of their total maximum payment when their application is approved, with the rest coming “at a later date as fund remain available.”
Not happy with the program set-up is the National Sustainable Agriculture Coalition (NSAC), which says USDA short-changes small producers who work outside the commercial/wholesale marketplace or produce premium-priced products. Despite acknowledging “the president recognized the importance of farmers who sell directly to their customers…it is unfortunate the program USDA created doe so little to support them.” Says NSAC, “Unfortunately, like many USDA programs, CFAP will prove more difficult for diversified farms, those that sell into local and regional markets, and value-added producers (organic, grass-fed, etc.).”
This sniping is just a preview of what’s coming as the next COVID 19 cash box is filled and the November election looms. Former Vice President Biden, the presumptive Democrat nominee, this week held a virtual rural issues roundtable hosted by Rep. Ron Kind (D, WI), with state rural leaders participating. Biden took lots of expected shots at Trump, faulting the administration for its trade wars, COVID 19 response and the need to dicker over federal aid. “”Farmers aren’t looking for a payoff, they are looking for an opportunity,” Biden said.