Federal COVID-19 Assistance for Agriculture Becoming Clearer

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What's in the cards for rice
Apr 24, 2020
WASHINGTON, DC -- As the coronavirus pandemic continues to evolve and unfold, the Federal government took actions this week that will provide assistance to the agriculture industry affected by COVID-19.

Last Friday, President Donald Trump and Agriculture Secretary Sonny Perdue announced the Coronavirus Food Assistance Program (CFAP), a $19 billion assistance package with two elements that will be facilitated by the U.S. Department of Agriculture (USDA), including $16 billion in direct payments to producers and $3 billion in food procurement and distribution.

Direct payments will be based on actual losses due to prices and markets impacted by COVID-19.  Commodity procurement will be focused on beef, dairy, pork, fruits, and vegetables.  

This week, USDA Under Secretary for Farm Programs and Conservation Bill Northey told row crop stakeholders that USDA is still working to determine how losses will be calculated and other details on how the program will function.  For example, which prices are most appropriate to use for each commodity since they are all marketed differently.

The single direct payments will be based on market price losses as a direct result of the pandemic.  Payments will be commodity-by-commodity and will be capped at $125,000 per commodity or a total of $250,000 per individual or entity.  There is an Adjusted Gross Income (AGI) cap of $900,000 for eligibility unless 75 percent or more of the income is derived from agriculture.

USA Rice has been closely monitoring rice prices throughout the pandemic, many of which have noticeably increased over the past several months.  Of particular note is the 70 cent drop in southern medium grain prices from January to February, which according to USDA’s metric of a 5 percent or greater loss would trigger a payment.  USA Rice will continue working with USDA to provide information and details as officials continue developing CFAP.

USDA also announced commodity procurement details, which include purchases of $100 million per month for fresh fruits and vegetables, $100 million per month for dairy, and $100 million per month in meat products.  At this point, rice will not be included in these purchases.

“USA Rice staff continues to stay in contact with USDA officials to learn more about the CFAP details,” said Ben Mosely, USA Rice vice president of government affairs.  “While overall rice prices haven’t decreased as we’ve seen in other agricultural commodities, the industry has seen some impacts and we’re working with USDA to show these damages.”

USDA will reevaluate the situation for additional aid later this year, and said that additional funding will be required in order to provide aid to all agriculture industry sectors that have been affected by COVID-19, amidst an already tough year with low prices, weather, and trade issues.