After seven straight years of rural recession, compounded in recent years by unjustified retaliatory tariffs by China, U.S. farmers and ranchers were already standing on a precipice. Now, without immediate action by Washington, the economic impacts of the COVID-19 pandemic may well push them over the edge.
Facing unprecedented challenges, farmers and ranchers are reeling due to collapsing commodity prices from already depressed levels and tragic supply chain disruptions, including shuttered processing facilities that leave producers with no place to go and no option but to plow crops under, dump milk, or depopulate herds.
Producers need immediate and effective relief under the Coronavirus Food Assistance Program (CFAP) and decisive action to safely reopen processing facilities and mend the current break in the supply chain.
We greatly appreciate the efforts of the Administration to meet these enormous challenges head-on and offer our suggestions to build on this crucial work.
First, House Agriculture Committee Chairman Collin Peterson recently wrote to Vice President Mike Pence setting out a road map for reopening meat processing facilities and restoring the supply chain. We urge the Administration to implement this plan to the benefit of producers, workers, and the U.S. food supply and we applaud the Administration for invoking the Defense Production Act for the purpose of achieving many of the goals laid out in the plan.
Second, Senators Jerry Moran and Dianne Feinstein and Reps. Jimmy Panetta and Mike Simpson led bipartisan, bicameral letters to the President last week, signed by more than 150 Members of Congress, seeking to ensure that the success of CFAP is not totally frustrated by unworkable payment limitations for specialty crop producers, cattle and other livestock producers, or dairy farmers.
Producers are financially hemorrhaging and the CFAP will not come close to covering producer losses. Producers should not be asked to suffer even further losses in order to meet arbitrary pay limits if the goal is to save these family operations.
Producers are rightly regarded as critical infrastructure and, as such, are expected to carry on their work during this global pandemic. Work which they are doing even though each morning when they walk into their fields, pastures, and dairy parlors they know they are going to lose a lot of money – and perhaps their operations.
Third, House Minority Leader Kevin McCarthy, Minority Whip Steve Scalise, House Agriculture Committee Ranking Member Mike Conaway, along with Reps. Rick Crawford, Austin Scott, Tom Emmer, and Rodney Davis led a letter to the President from more than 120 House Members echoing opposition to pay limits under this package for any farmer or rancher, but also stressing that the CFAP itself must be retooled in a few key respects including:
- Not punishing producers who marketed or hedged their commodity;
- Not excluding producers of any commodity given the current volatility
- Providing relief beyond the farm gate to help maintain value-added agriculture infrastructure; and
- Tapping into the $14 billion already provided by Congress in the CARES Act, funding that may not be available at the moment but will be very shortly.
With Members of Congress on both sides of the aisle discussing $50 billion to $68 billion in new CCC authority, USDA can deploy at least some of the $14 billion Congress has already agreed to in order to strengthen the pending relief package.
Both of these letters are spot on and reflect the view on the ground of farmers, ranchers, and dairy producers from across the country producing every commodity and who are on the front lines of the fight to protect the American food, fiber, feed, and fuel supply. We urge the Administration to adopt these principles as the CFAP moves through the rulemaking process.
Concerning pay limits, Joseph Kerns, writing at National Hog Farmer, put it into perspective for livestock producers: “if you are a 2,500-sow producer, the payment limit ($250,000) represents about $4 per pig of your annualized production … at a time when you are losing in excess of $40 per head with the prospects of the same indefinitely into the future.”
This simply does not pencil out if the goal is to keep U.S. critical infrastructure – the American farmer and rancher – intact through absolutely devastating times. Nor does a plowed down crop, dumped milk, or forced depopulation of herds.
Fortunately, the Administration is determined to help producers get through these wrenching times, and key Members of Congress – on a bipartisan, bicameral basis – have offered ideas and support that can ensure the help to U.S. agriculture is both effective and timely.