The USDA should abandon thoughts of a $125,000 or $250,000 per-person limit on federal payments to mitigate the impact of the coronavirus pandemic on agriculture, said the cattle industry on Thursday. It was the first public challenge by a farm group to the Trump administration’s plan to send $16 billion in cash to farmers and ranchers by June.
The coronavirus payments would come on the heels of $23 billion in direct payments by the administration in 2018 and 2019 to cover the costs of the trade war with China and retaliatory tariffs by other countries. Agriculture Secretary Sonny Perdue announced the coronavirus package a week ago, but the USDA has to write regulations to put the plan into action.
“As USDA works to finalize program details, [we] would like to caution the department against any payment limits or means-testing provisions that would arbitrarily restrict assistance,” said the National Cattlemen’s Beef Association in a letter to Perdue and the leaders of the House and Senate Agriculture committees. “We urge USDA to consider the unique business needs of the cattle industry when making decisions regarding commodity payment caps.”
The National Pork Producers Council will also ask the USDA to remove restrictions on payments, spokeswoman Rachel Gantz told Feedstuffs. The group, representing hog farmers, called for “equitable direct payments to producers … without eligibility restrictions” in the days before Perdue outlined the coronavirus aid plan.
Both livestock groups say payment limits will restrict aid to producers with a relatively small number of animals, when many operations are much larger because of thin profit margins. The NCBA letter said $125,000 would cover losses on a 500-head cow-calf ranch or a 600-head feedlot operation.
The USDA said it has proposed using “a $125,000 payment limit per commodity, with an overall payment limit of $250,000 per individual/entity and a $900,000 Adjusted Gross Income limit for individuals who do not derive 75 percent or more of their income from farming.” That’s similar to the limits placed on trade war payments. The payment limit for traditional crop subsidies is $125,000 per farmer; spouses are automatically eligible for payments, too. The USDA has not said if spouses would be similarly eligible for coronavirus aid.
Michigan Sen. Debbie Stabenow, the senior Democrat on the Senate Agriculture Committee, responded to a question about coronavirus payment limits by saying USDA officials “have flexibility, given the circumstances” while noting the strong Senate vote in favor of the 2018 farm bill, which included the $125,000 cap. A Stabenow aide was not immediately available to say if the senator believed payments should be allowed above the USDA proposal.
Meanwhile, House Agriculture chairman Collin Peterson asked the administration for a “robust federal response” to the disruptions in meat processing that have backed up hogs on the farm. “Because of Covid-19, many of America’s pork producers have no access to processing and have no choice but to depopulate their herds,” wrote Peterson in a letter to Vice President Mike Pence.