Farmers and ranchers will begin signing up for $16 billion in coronavirus payments by the end of May if all goes according to plan, said a USDA spokesperson on Thursday. In that case, the payments would follow the USDA’s awarding of contracts for another part of the Coronavirus Food Assistance Program (CFAP), the Farmers to Families Food Box.
Livestock producers would get $3 of every $5 in the cash payments, according to unofficial descriptions of the aid to agriculture. The USDA will spell out payment formulas and other details when it publishes the rules for the stopgap program.
“USDA is working as quickly as possible to implement CFAP,” said the spokesperson. “Signup for the direct assistance is expected to begin by the end of May. USDA proposes to use 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.”
Purchase and distribution of the food boxes “will be able to begin in approximately two weeks,” said the spokesperson.
Dairy and livestock groups have argued that there should be no limits on assistance. Because of thin profit margins, they say, producers have to run large operations to make a living. Minnesota hog farmer Mike Boerboom said a $125,000 payment would offset the expected losses on just 500 hogs. “It’s not nearly enough,” he told reporters on Wednesday. Boerboom is part of a family-run operation that markets 350,000 hogs a year.
Market prices for most of the major U.S. commodities fell sharply when the coronavirus became a pandemic and the food service industry virtually shut down overnight. Some produce growers said they will be forced to plow under crops because there are no buyers. Dairy farmers have dumped milk because of oversupply. The National Milk Producers Federation, in calling for elimination of the $125,000 payment limit, pointed to a Texas A&M study that estimated a 1,000-cow dairy farm in Wisconsin would see a decline of $500,000 in net cash income.
Along with the $16 billion in payments for producers, the USDA’s coronavirus package would spend $3 billion on the food box program at a rate of $300 million a month. Contractors would buy fresh produce, dairy products, and pre-cooked chicken and pork to assemble in packages ready for distribution upon delivery to food banks and other nonprofit organizations.
Early this week, a panel of economists said the food box was an inefficient way for the government to help the hungry compared to the more direct approach of giving money to food banks or donating food to charities. The USDA said the food box initiative “is to allow producers to sell food previously destined for restaurants and bulk purchasers to distributors, preventing waste and helping Americans in need in response to the Covid-19 pandemic.”
USDA officials hoped to award Food Box contracts by Sunday. There was abundant interest, it said, among “offerors,” who had a May 1 deadline to submit proposals.