Pandemic tops trade war in USDA payments to farmers

In less than nine months, U.S. farmers and ranchers have collected a mammoth $23.5 billion in pandemic relief payments, said the USDA on Monday, more than matching the $23 billion spent by the Trump administration to mitigate the impact on agriculture of trade war with China. Meanwhile, Agriculture Undersecretary Bill Northey called on Congress to increase the spending limit on what he likened to USDA’s checking account.

“I think it would make sense to raise that cap,” said Northey, referring to the $30 billion limit on outlays through the Commodity Credit Corp, created during the Depression era to support farm income and commodity prices. The administration made unprecedented use of the agency to pour money onto the farm sector since the trade war deepened in 2018.

“Certainly, USDA advocated for that. There’s some in Congress that would do that,” said Northey during an “Open Mic” interview. Farm groups such as the American Farm Bureau Federation have backed a doubling of the CCC authority. However, former House Agriculture chairman Collin Peterson opposed the creation of a large fund that USDA could spend without congressional oversight.

“It sure would be nice to have some standing authority within the farm bill” for stopgap relief programs, outside of traditional crop subsidies, to respond to catastrophic “black swans” such as the pandemic, said Northey. Lawmakers are expected to begin work soon on the 2023 farm bill and Northey said there was interest on both points that he raised.

Congress usually replenishes the CCC account each fall. “The money that we need now to be able to respond to agriculture the size that it is, I can get to the place where you’re stretching up against the cap,” said Northey.

The USDA was allotted $13 billion for agricultural aid under the $900 billion coronavirus bill signed by President Trump a week ago. The USDA has yet to announce payment details. The aid would include payments of $20 an acre to row-crop farmers, totaling around $5 billion, along with aid to livestock and poultry producers.

In a weekly tally, the USDA said a combined $23.5 billion has been sent to producers under the two versions of its Coronavirus Food Assistance Program since payments began in late May. Some $10.5 billion was disbursed under the initial iteration and $13 billion under the second. The deadline for applications for CFAP1 was Sept. 11 and for CFAP2, Dec. 11.

Nearly a quarter of the money went to three states: Iowa with $2.1 billion, California with $1.8 billion and Nebraska with $1.6 billion. Among commodities, cattle producers received $7.1 billion and corn farmers $5.1 billion, followed by dairy farmers with nearly $3 billion. More than 884,000 applications were approved for payment in CFAP2 and more than 652,000 for CFAP1.

“CFAP2 probably is the broadest program we’ve ever had at USDA,” said Northey. “Nearly every agricultural producer out there, from farmers market folks and folks with small specialty livestock to  all the commodities and larger livestock operations; nearly everybody qualified to receive some support for the impact that Covid had on their operations.”