U.S. Secretary of Agriculture Sonny Perdue announced details of the Coronavirus Food Assistance Program (CFAP), which will provide up to $16 billion in direct payments to deliver relief to America’s farmers and ranchers impacted by the coronavirus pandemic. In addition to this direct support to farmers and ranchers, USDA’s Farmers to Families Food Box program is partnering with regional and local distributors, whose workforces have been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase $3 billion in fresh produce, dairy, and meat and deliver boxes to Americans in need.
Payments will go directly to farmers who have suffered a 5% or greater price loss and who are facing significant marketing costs due to the coronavirus. Eligible commodities include cattle, hog, dairy, specialty crops and row crops. Payments will be limited to $250,000 per person.
“This aid can’t arrive soon enough as many farmers file for bankruptcy, facing unprecedented losses. We are grateful to the Administration and to Congress for sending aid to America’s farmers and ranchers reeling from the breakdown in distribution channels resulting from COVID-19. Although supply is strong, the shutdown of restaurants and school cafeterias caused the markets for meat, dairy and produce to shrink drastically almost overnight,” said Zippy Duvall, American Farm Bureau Federation president. “The Coronavirus Food Assistance Program is critically important, but the long-term effects of this pandemic are still rippling through the farm economy. The livestock sector is a prime example. As America begins to reopen for business, it’s imperative that we ensure the nation’s farms and ranches are able to hold on through this season and next to help put this country back on the road to recovery.”
The spring of 2020 has been devastating to U.S. agriculture. Farm bankruptcies increased 23% in March 2020 compared to a year earlier. By mid-April 2020: hog futures prices fell 53%, live cattle futures fell 25%, ethanol futures fell 33%, and cotton futures fell 25%.
Direct support sign-ups begin on May 26, 2020, through local Farm Service Agency offices. There is a payment limitation of $250,000 per individual as well as a $900,000 adjusted gross income limit for individuals who do not derive 75% or more of their income from farming. Corporations with up to three individuals actively engaged in farming will be eligible to receive up to three payment limits. Eligible farmers will receive 80% of the total payment, up to the payment limit, upon approval of the application. The remaining 20% will be paid at a later date as funds remain available.
The $16 billion includes $9.5 billion appropriated by the CARES Act and $6.5 billion from the Commodity Credit Corporation Charter Act.