The Rowe Report: So, What’s in the Stimulus Package for Farmers?

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Ben Rowe, National Affairs Coordinator

Congress loves acronyms. They take complex pieces of legislation and give them a clever acronym title to make us all feel better during difficult times. In 2008 they passed the Troubled Asset Relief Program (TARP) to give us shelter from the financial storm. In 2018 the House introduced the Robo Calls Off Phones (ROBO COP) Act to protect us from fraudulent cell phone calls. Now, as we face a global health pandemic, the House and Senate have both passed the Coronavirus Aid, Relief, and Economic Security Act to show that Congress C.A.R.E.S. about our health and financial wellbeing. The President has already committed to signing the bill, so, with a price tag north of $2T and bill text of several hundred pages, what all does the bill include and what does that mean for Virginia’s farmers?

You have likely heard about the direct payments almost every American will receive, to the tune of $1,200 per adult and $500 per child in your household. In addition to direct payments the bill includes extended unemployment benefits, federal loan guarantees, and funding to ensure children and low-income families have continued access to nutritious, affordable food.

For the agriculture-related provisions, the Office of the Secretary of the Department of Agriculture received $9.5 billion, approximately 19% of the total food and agriculture provisions, to provide financial support to farmers and ranchers impacted by coronavirus. The funding is allocated specifically for specialty crops, producers who supply local food systems and farmers’ markets, restaurants and schools, livestock producers, and dairy farmers.

Beyond the $9.5 billion, the Commodity Credit Corporation (CCC) was replenished with $14 billion – 29% of the total funding amount for agriculture. The CCC is the funding mechanism for agricultural programs such as Price Loss Coverage and Dairy Margin Coverage, as well as natural resources conservation programs, disaster assistance programs, and most recently, the Market Facilitation Program used to offset lost income from trade disputes. This replenishment will allow USDA to develop new support programs to assist agricultural producers and potentially help agribusinesses such as ethanol plants, a major player on the demand side for corn.

Let’s pause here for a moment and think about these numbers. Even in the world of government, numbers that start with “B” and “T” are a pretty big deal. With that said, the total direct food and agriculture-related provisions in the CARES Act total approximately $49 billion, or 0.0245% of the $2-trillion measure. That’s a lot of tax dollars, but more or less a rounding error when compared to what individuals and other industries are receiving. This shows you the efficiency at which agriculture operates, even in the most challenging of times.

The act provides a total of $24.6 billion for domestic food programs – representing 50% of the total agricultural program funding in the bill. The act allocates $15.8 billion, or 32%, to improve access to supplemental nutrition programs (SNAP) in the event costs or participation exceed budget estimates. In addition to enhanced funding for SNAP, child nutrition programs received $8.8 billion in additional funding – representing 18% of the total.

Combined, these four buckets represent 98% of the food- and agriculture-related provisions in the CARES Act. The remaining 2% of funding – approximately $916 million – is allocated for enhancing staffing and services in several key mission areas.

If you have kids, odds are they are home right now. The package includes funding for a variety of programs critical to help keep rural America, especially students, connected. The package includes $100 million for USDA’s ReConnect broadband pilot, $25 million for distance learning and telemedicine programs, $185 million to support rural critical access hospitals, rural tribal health and telehealth programs, and poison control centers, and $20.5 million to support an additional $1 billion of lending through USDA’s Rural Development. This pandemic has exacerbated the disparity between urban/suburban and rural internet access, and all the advantages that come with that.

The CARES Act provides the financial resources immediately necessary to ensure that children and low-income families continue to have access to healthy and affordable food. For the people who produce that food, the package provides the resources needed to allow USDA to begin crafting an appropriate agricultural relief program. Given the sharp downturn in ethanol markets and downstream impact on corn prices across the country, an aid package for these agribusinesses may also be warranted.

The COVID-19 pandemic will have a lasting economic impact on our nation’s economy. We are immediately creating a new $2T deficit, and the full extent of the economic damage to U.S. farmers, farms, and agribusinesses is unknown. If more resources ultimately prove necessary, our lawmakers and the administration have demonstrated their ability to make those resources available.

The one factor that is certain is the willingness and ability of the American farmer to meet any challenge head-on and provide Americans, and our trading partners, with the safest, most abundant, and reliable food supply in the world.

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