Update On Agricultural Aid

USDA Release More Information,

Many Questions Remain

Late last Friday (April 17th), Secretary of Agriculture Sonny Perdue announced a  $19 billion Coronavirus Farm Assistance Program and last night more details were released. While we know a bit more from these announcements, many questions remain. 

Here’s what we know and some of the questions raised by these announcements.

What we know:

  • The US Department of Agriculture (USDA) plans to purchase and deliver $3 Billion of agricultural products to those in need.
  • The USDA will provide $16 billion in direct payments to farmers and ranchers including:
    • $5.1 billion for cattle
    • $2.9 billion for dairy
    • $1.6 billion for hogs
    • $3.9 billion for row crop producers
    • $2.1 billion for specialty crops producers
    • $500 million for others 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. 

The questions have to do with how these funds will be distributed and the process producers will use to prove their losses. The USDA has given no guidance about how these processes will work. 

It appears they are focusing on the $3 Billion purchase of commodities first. Although little is known about this process. In their press announcement USDA said, “USDA will issue a solicitation in the next two weeks to invite proposals from offerors to supply commodity boxes to non-profit organizations, identified by the offeror, on a mutually agreeable, recurring schedule. USDA will award contracts for the purchase of the agricultural products, the assembly of commodity boxes and delivery to identified non-profit organizations that can receive, store and distribute food items.”

For more information about the food distribution plans visit: https://content.govdelivery.com/accounts/USDAAMS/bulletins/28747c8

Stay tuned to this blog as DRA will work to keep you informed about the most recent information.