Perdue gets $20 billion blank check for ag aid in GOP coronavirus plan

Senate Republicans proposed $20 billion in additional aid to agriculture in their new coronavirus package on Monday, leaving it to Agriculture Secretary Sonny Perdue to allot the money. At the same time, Republicans decided against an increase in food stamp benefits, a goal of House Democrats.

The proposed increase in farm aid came as the USDA released figures showing that it has only spent a little more than 40 percent of the $16 billion that was earmarked for farmers and ranchers for coronavirus relief in the so-called CARES act passed in March. Pat Westhoff, head of the FAPRI think tank, said there is reason to doubt all the money in that first round of aid will be spent, a dramatic change from predictions last spring that farm-country needs would overwhelm the fund.

Nevertheless, another $20 billion will be added if the Republican bill becomes law. North Dakota Sen. John Hoeven, who oversees USDA funding on the Senate Appropriations Committee, said the $20 billion “will help to mitigate the impacts of Covid-19 on farm country.”

“It’s complete flexibility for the secretary of Agriculture to help agriculture in any way he wants to,” said Senate Finance chairman Chuck Grassley of Iowa during the “Adams on Agriculture” program. Grassley also is a member of the Senate Agriculture Committee.

If the GOP plan prevails, Perdue would be empowered for the fourth time in three years to write a multibillion-dollar stop-gap plan to bolster the ag sector. He has overseen two sets of trade payments and in April announced the $19 billion Coronavirus Food Assistance Program, with $16 billion earmarked for producers and $3 billion for a first-of-its-kind food-box giveaway through food banks, churches and other nonprofit organizations.

Grassley, a longtime supporter of biofuels, said “I can’t get a commitment” from Perdue on assistance for ethanol producers; $3 billion would be appropriate, he said. The trade group Growth Energy said the Republican package would make biofuel producers eligible for aid through the USDA. “This is a good first step but falls short of providing the necessary clarity,” said chief executive Emily Skor.

Senate Majority Leader Mitch McConnell said the $1 trillion package, which has White House backing, “is a starting point” for negotiations with Democrats in the House and Senate. “We cannot pass a bill in the Senate without the Democrats,” said McConnell. He insisted that a liability shield to protect business from coronavirus lawsuits must be part of the final package. “There won’t be a bill that passes the Senate that doesn’t have this in it.”

The House passed a $3 trillion package in May that included $16.5 billion in cash payments to farmers and ranchers, a requirement for USDA to notify Congress in advance of any large expenditures, a temporary 15 percent increase in SNAP benefits and extension of the so-called P-EBT program that helps low-income parents buy food for their children during school closures. The White House rejected earlier proposals for a boost in SNAP.

“The opposition of Congressional Republicans and President Trump to increasing domestic food support during the worst health and hunger crises in modern times is not only morally outrageous and economically self-defeating, but it is also, frankly, dumb politics,” said Joel Berg of Hunger Free America.

As for the $16 billion aid package now underway, 60 percent remains unspent. “I do expect a lot of additional payments to be made in the weeks ahead,” said Westhoff of FAPRI. “However, I’m no longer convinced the full $16 billion will be spent.” Some producers may face difficulties in filing paperwork during the coronavirus or applicants may be snagged by eligibility and payment limit rules, he said.

As of Monday, $6.6 billion was disbursed to 473,124 applicants, said the USDA. The maximum payment is $250,000 per individual or entity under the program’s rules. People with more than $900,000 in adjusted gross income are eligible for payments if at least 75 percent of their income comes from farming, ranching or forestry. Signup ends in five weeks, on Aug. 28.

The Senate Appropriations Committee summary of the USDA portion of the new proposed package is available here.