By Megan Roberts, Extension educator
For farm businesses waiting for economic relief packages
related to COVID-19 market disruptions, the last two weeks have not brought significant
additional news. From the Minnesota government, the Rural Finance Authority (RFA) was
amended to include human contagious diseases as a qualifying disaster. This
opens up low interest loans through RFA for economic losses from COVID-19.
Additionally, Minnesota added $50 million to restock RFA's budget. This occurred in late
March. From the federal government, the last two weeks have brought additional
clarification related to the CARES Act Paycheck Protection Program (PPP)
and a better understanding
of how Families First Act provisions affect farmers with employees. For more
information on these programs, visit our previous
blog post on the topic. Note: As of April 15, the SBA has allocated all PPP funds. New legislation is being discussed for more funds but until that is passed no new PPP loans may be issued.
The CARES Act provides resources for additional farm payments
Big questions remain related to COVID-19 economic aid to
farm businesses. What will happen to the $23.5 billion already allocated for direct agricultural payments in the
CARES
Act to the USDA? Will additional
farm-related economic relief legislation be passed federally or in Minnesota? While
neither question can be answered definitely (as of April 15, 2020), it is
possible to explore in a little more detail what we know about the USDA’s CARES
Act allocation for direct agricultural payments.
 |
| Minnesotan farmers await further economic news |
$9.5 billion is allocated to new payments to “producers of
specialty crops, producers that supply local food systems” as well as
“livestock producers, including dairy producers” through Division B, Title 1. The
Office of the US Secretary of Agriculture has authority to decide how these payments
will be made within the parameters of the law. Under current interpretations,
commodities already covered by Farm Bill programs, such as corn, beans, etc will
not be eligible for this $9.5 billion tranche of relief payments. An important
exception is dairy, which is covered by the Farm Bill and eligible for this
allocation. Section 11002 provides $14 billion to reimburse Commodity Credit Corp (CCC) losses. Under current interpretations, this is not necessarily for
new direct payments. It is to cover already existing CCC “net realized losses…not
previously reimbursed.” However, the USDA could issue new guidance, and the current interpretation
of the CCC’s $14 billion allocation could change.
Other USDA plans
The CARES Act has additional funding for other USDA programs, including food and nutrition. USDA has discussed significant bulk commodity purchases, indirectly helping increase farm gate prices.
The US Secretary of Agriculture Sonny Perdue announced plans to release additional details on payments within the week.
As soon as information is available on when and how farm businesses may be receiving additional payments, Extension’s ag business management team will provide an update on this blog.
As soon as information is available on when and how farm businesses may be receiving additional payments, Extension’s ag business management team will provide an update on this blog.
