USDA’S COVID-19 Farmer Relief Will Leave Out Farmers Most Impacted by Crisis

Posted on Wednesday, May 20th, 2020 by Guest Blogger
Photo courtesy of USDA NRCS

This is reposted from the National Sustainable Agriculture Coalition (NSAC), of which CalCAN is a member. NSAC advocates for federal policy reform for the sustainability of food systems, natural resources, and rural communities. See the original press release here

Thousands of Farmers and Ranchers Working to Feed their Communities Will Not be Fairly Compensated for Losses

Washington, DC, May 20, 2020 – Yesterday, the Trump Administration announced the impending opening of the Coronavirus Food Assistance Program (CFAP) farmer aid payments to be delivered by the United States Department of Agriculture (USDA).

CFAP will make $16 billion in aid available to farmers who suffered economic losses due to the coronavirus pandemic, but it fails to meet its Congressional mandate to compensate all farmers fairly and represents a missed opportunity to help build more resilient food systems and markets that benefit both farmers and consumers.

“The President recognized the importance of farmers who sell directly to their customers during his announcement of the CFAP program. It is unfortunate that the program USDA created does so little to support them,” said Eric Deeble, Policy Director. “CFAP fails to deliver for many farmers who are the backbone of local, resilient, sustainable food systems.”

The National Sustainable Agriculture Coalition conducted an initial review of CFAP details released today and found several deficiencies that will limit the effectiveness of the program and the opportunity for many farmers to be compensated fairly for their losses.

Program structure is flawed

While technically open for enrollment for three months, CFAP will essentially operate on a “first come, first served” basis. This will skew payments towards the largest producers with the simplest production systems who are able to submit their claims as soon as the application window opens next week. While USDA has stated that they will initially pay only 80% of losses to retain 20% that will be used ‘to ensure those funds are distributed equitably among all eligible producers’ there are no guarantees that funds will be available to farmers who take longer to apply for aid. Producers with complex operations who must compile more extensive documentation across multiple commodities and markets, who are unfamiliar with FSA operations, or who need additional support in applying (e.g. due to broadband access issues, resource constraints, etc.) will face a structural disadvantage when applying for support.

Payments are not based on actual losses

USDA has maintained that the CFAP program would be designed to compensate farmers for actual losses. However, the payment structure for the program relies on prices calculated by USDA without regard to the prices that producers actually receive for their products. Farmers who sell directly to their customers, supply local and regional markets where prices may be higher, produce a unique product that warrants a premium price (e.g. organic), or produce a value-added product can only receive a payment based on the wholesale commodity price for their products. Even though USDA maintains pricing data on these types of farm goods they do not account for them in their payment program. For diversified operations, the limited list of specialty crops and other products eligible for payment further limits their opportunity for fair compensation. Some producers, like poultry growers, are excluded from the program entirely, regardless of the harm they have suffered.

CFAP weakens payment limits and eligibility criteria

The CFAP program contains weak payment limits where some operations, established as corporations, may be eligible for up to $750k in payments. General partnerships are eligible for even more and some farms could receive millions in payments. Excessively high payment limits stretch precedent and the notion of fairness. Likewise, the requirements for a farmer to be eligible for a payment are out of line with other USDA programs. An individual need only have committed 400 hours of time to a farm operation to be eligible for payments which is less than in the 2015 rule and dramatically less than in the active labor test established in 1987. Similarly, AGI restrictions are weakened by permitting individuals that earn more than 75% of their income from farming, ranching, or forestry to be eligible for payment even if they have an AGI of >$900k. Raising payment limits while expanding who may be eligible for a payment will likely increase the number of operations claiming the maximum payment possible, leaving much less available for small or mid-size family farmers.

CFAP has no commitment to equity or the next generation of farmers

There are many producers for whom CFAP could further exacerbate existing resource inequities because it does not reserve funding or provide any targeted support for farmers who may need it. New and beginning farmers who lack familiarity with USDA programs, historically underserved farmers who lack confidence in the Agency due to previous discrimination, urban farmers with less access to FSA field offices, and farmers who have limited resources, language constraints, or other barriers to participation, will find no additional resources within the CFAP program. CFAP is likely to be the largest single direct payment program made to farmers in American history and the fact that the rule does nothing to make ensure that the program will work well for all farmers who are eligible is at least a missed opportunity and at worst a moral failure.

Dedicated USDA field office and outreach staff, along with grassroots farm and food organizations, will find that this program’s structural flaws make it difficult for them to assist many producers in need. In the coming days, NSAC will provide a full analysis of the CFAP rule and offer additional recommendations on how the program could be made more effective and equitable for producers, followed by additional guidance materials for producers once program signup begins. Visit our COVID-19 resource page for the latest information:

Visit the USDA’s CFAP page here

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