The U.S. Department of Agriculture announced a $19 billion Coronavirus Food Assistance program to assist farmers and ranchers during the COVID-19 pandemic.
$16 billion will be used in direct payments to farmers and ranchers. The funding is provided by the $9.5 billion set aside for agriculture in the CARES Act and $6.5 billion from the Credit Commodity Corporation to deal with the pandemic
Another $3 billion will be provided to purchase products produced by farmers and ranchers to provide food to those in need. Meat, dairy and produce will be purchased by the USDA who will work with local food and regional distributors to deliver food to food banks, as well as community and faith-based organizations to provide food to those in need.
Direct payments will be made to dairy produces and purchases of a variety of dairy products will be done in an effort to stabilize prices and help food banks. Because many restaurants nave closed and reduced services there has been a decreased demand for dairy products.
The USDA will also purchase produce from farmers to provide for nutritional programs as well as provide direct payments to crop producers hit worst by the pandemic.
Flower growers are also facing unprecedented shutdowns, so the USDA will also use money provided by Congress to help that industry.
The relief package for agriculture is designed to implement a program that delivers equitable relief to meat producers and produce growers and to make sure those who are struggling have access to the food they need.
Of the $16 billion in direct payments to farmers and ranchers, $9.6 billion will go to those in livestock; $5.1 billion to cattle; $2.9 billion to dairy; $1.6 billion to hogs; and $3.9 billion to row crop producers; $2.1 billion to speciality crop producers: and $500 million to those who grow other crops.
Those who receive payments will receive payments based on two calculations: Those receiving payments will receive compensation that 85 percent of their price loss that happened from January 1 through April 15. The second part of the payment will cover 30 percent of expected losses through the next two quarters after April 15.
The payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity. Qualified commodities must have experienced a 5 percent price decrease between January and April.
USDA is expediting the rule making process for the direct payment program and expects to begin sign-up for the new program in early May and to get payments out to those who qualify for the payments by the end of May or early June.