USDA Relief Programs Bring Good News to Farmers and Food Producers

By Halderman

06 /29 /20

Nearly every person in the U.S. is impacted by COVID-19. Farmers, consumers and processors are struggling to make sense of the new reality. Food distribution in the U.S. involves retail (grocery), restaurants and institutional (hospitals, schools, government) customers. Unemployment, business closures and stay-at-home orders created havoc in the industrial food sector.

Welcome relief for farmers and ranchers is in the form of the USDA's Coronavirus Food Assistance Program (CFAP), supported by the federal Coronavirus Aid, Relief, and Economic Security Act (CARES), enacted in April 2020 along with the Families First Coronavirus Response Act (FFCRA.)

U.S. Secretary of Agriculture Sonny Perdue notes that the CFAP intends to secure the nation's food supply chain, provide much-needed support to farmers and ranchers, and ensure that food banks and charitable organizations that provide free and low-cost meals and groceries to those in need have sufficient inventories. It is important to note that the food supply chain was not broken during the pandemic but was stretched as growers, processors, suppliers and retailers adapted or shutdown due to the virus spreading within their facility.

Direct support for farmers and ranchers

The most immediate and important feature of the CARES Act is $16 billion in direct support for agricultural producers who sustained losses due to the impact of COVID-19. In addition, the act provides financial support to producers who experienced reduced demand for their products or who incurred additional administrative costs from supply chain disruptions.

The second element of the act provides $3 billion in direct purchases by the USDA for produce, dairy and meat. These purchases support food distributors affected by closures among their constituent clients, including schools, hotels and restaurants. These products are provided to organizations that support individuals in need, such as faith-based charities, food banks and shelters.

The USDA will also access Section 32 funding that was enacted in 1935 to purchase produce and other commodities furnished to school lunch programs and other food support programs. The purchases in turn provide indirect price support to farmers by removing a portion of the product supply from the market and enabling farmers to obtain higher prices for their crops and other food products.

Food and Nutrition Service program offerings

The Food and Nutrition Service (FNS) division of the USDA affords program participants a lot of flexibility as part of the overall COVID-19 response effort. The FNS administers 15 programs that support child nutrition. Making pick-up for families that benefit from reduced-price school meals and delivery of fresh produce available to those in need is a major priority for pandemic relief.

In effect, the FNS is creating an entirely new paradigm by adapting to the reality of many people staying at home with limited ability to travel or even run basic errands. The agency is also working with individual states on issues like increasing the number of pick-up sites for food and meals.

For residents of rural communities, the USDA compiled a resource guide to help people determine whether they are eligible for the various programs it offers. This includes a matrix that breaks down available help into technical, financial and state programs for businesses and individuals affected by the pandemic.

Halderman Real Estate and Farm Management has been advising farmers and farmland owners for several generations. In difficult times, we can help you create a plan to sustain your operations and maximize your benefits from various COVID-19 relief programs sponsored by the USDA and the federal government. Give us a call to help you navigate the programs and determine how they can benefit you.