USDA's $19 Billion in COVID-19 Relief for Farmers and Food Banks Sparks Questions About Who Will Benefit

While some industry trade associations, hunger relief organizations, and federal lawmakers welcomed the Trump administration's new pledge to provide $19 billion in relief from the coronavirus pandemic to farmers and food banks nationwide, policy groups, and reporters highlighted that the announcement lacked critical details about who will benefit.

U.S. Agriculture Secretary Sonny Perdue announced the plan at a Friday night press briefing with President Donald Trump. The president said that "the program will include direct payments to farmers as well as mass purchases of dairy, meat, and agricultural produce to get that food to the people in need."

The National Sustainable Agriculture Coalition (NSAC), which joined with over 750 groups earlier this month in pressuring Perdue to directly help farmers who rely on local and regional markets, tweeted Friday that the plan was "progress" but still "lacks critical details to confirm whether it will actually reach all who need it."

Perdue, at the briefing, acknowledged the food supply chain problems caused by local and state coronavirus lockdowns, which have shuttered schools and businesses and imposed restrictions on restaurants. The closures have left some farmers and food producers with nowhere to send their products as unemployment soars and food banks face unprecedented demand.

"Having to dump milk or plow under vegetables ready to market is not only financially distressing," Perdue said, "but it's heartbreaking as well to those who produce them."

A U.S. Department of Agriculture (USDA) statement described how the $19 billion will be spent:

1. Direct Support to Farmers and Ranchers: The program will provide $16 billion in direct support based on actual losses for agricultural producers where prices and market supply chains have been impacted and will assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19.
2. USDA Purchase and Distribution: USDA will partner with regional and local distributors, whose workforce has been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase $3 billion in fresh produce, dairy, and meat. We will begin with the procurement of an estimated $100 million per month in fresh fruits, and vegetables, $100 million per month in a variety of dairy products, and $100 million per month in meat products. The distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy, and meat products to food banks, community, and faith based organizations, and other non-profits serving Americans in need.

The statement also noted that USDA "has up to an additional $873.3 million available in Section 32 funding to purchase a variety of agricultural products for distribution to food banks," and the recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act and Families First Coronavirus Response (FFCRA) Act provide the agency with "at least $850 million for food bank administrative costs and USDA food purchases, of which a minimum of $600 million will be designated for food purchases."

Reporting on the boxes for hunger relief groups, Mother Jones correspondent Tom Philpott pointed out that "it's unclear whether the administration plans use this new program to test out the idea of replacing cash food aid with pre-packed 'harvest boxes'--a concept widely reviled by anti-hunger advocates as inefficient and disrespectful of recipients."

Perdue didn't provide any clarity in a call with journalists, according toABC News:

"If you don't mind the pun, this is an out of the box example of what we're trying to do. It is new and different. We've never done this before but in realigning the supply. Much of the conversation you've heard about milk dumping has been to do with the dual processing system we have in this country," he told reporters on a call Friday night.

He did not directly answer if this was a version of the harvest box program the department has proposed in previous budgets, to significant scrutiny from lawmakers, advocates, and food bank operators, and if that will slow down the process.

As for the aid to farmers and ranchers, Sen. John Hoeven (R-N.D.) said in a statement Friday that the breakdown will be $9.6 billion for the livestock industry ($5.1 billion for cattle, $2.9 billion for dairy, and $1.6 billion for hogs); $3.9 billion for row crop producers; $2.1 billion for specialty crops producers; and $500 million for others crops.

Hoeven--who chairs the Senate Appropriations Committee's Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Subcommittee--said that producers will receive single payments capped at $125,000 per commodity and $250,000 per individual or entity to cover 85% of price loss from this year through April 15 and 30% of expected losses through the next two quarters.

Modern Farmerreported that during the call with journalists, Perdue didn't give a date for when producers will see payments but said that "I'm hoping we can get checks by the end of May." The secretary also confirmed there will an application process. As he put it: "I don't want to be facetious, but does anything happen in the federal government without paperwork?"

In a series of tweets Saturday morning, the advocacy group Food Policy Action noted that the USDA plan offers "nothing to protect farmworkers." The coronavirus outbreak has spurred fresh demands for greater efforts to improve conditions for these essential workers who often face barriers to fair wages, occupational safety, and healthcare even when there isn't a global health crisis.

Food Policy Action on Saturday also highlighted concerns that federal COVID-19 relief efforts could repeat "the mistakes of USDA's Market Facilitation Program (MFP), President Trump's bailout of farmers harmed by his trade war with China."

As Philpott explained at Mother Jones:

During Trump's trade wars in 2018 and 2019, the administration handed a total of $8.6 billion in direct payments, mainly to soybean growers who had seen exports to China plunge because of high tariffs imposed by China. An analysis by Environmental Working Group found that 10% of recipients--many of them wealthy owners of large farms--received more than half of the allotted funds.

USDA's announcement Friday came after both Republicans and Democrats in Congress sent letters to Perdue calling on his agency to provide relief to their constituents, from dairy farmers in the Northeast to pork and beef producers in the Midwest. It also followed a call from the hunger relief group Feeding America and the industry trade group American Farm Bureau Federation for Perdue to establish "a voucher program that would deepen the relationships between farmers and food banks."

American Farm Bureau Federation president Zippy Duvall--a newly announced member of the White House economic advisory board--expressed gratitude for the USDA's plan in a statement, saying that "this $16 billion in aid will help keep food on Americans' tables by providing a lifeline to farm families that were already hit by trade wars and severe weather."

"The plan to purchase $3 billion in meat, dairy products, fruits and vegetables will help to stabilize markets and keep farms afloat so they can go about the business of feeding America," Duvall added. "We also appreciate the additional funding from other sources to help deliver food from farms to food banks. We look forward to additional details about how the aid will be distributed."

ABC News reported that Feeding America CEO Claire Babineaux-Fontenot--whose group has a network of 200 food banks nationwide--also applauded the plan.

"We are still examining the details, but this effort has the potential to be a significant food resource for people facing hunger," she said. "This program is designed to ensure nutritious food from growers and producers makes it on to the tables of our neighbors now when they need it most. We look forward to working closely with USDA on how to most efficiently operationalize the plan in the coming days."