How will the CARES Act help small farms and local food?
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As of March 27, the House and Senate have unanimously passed The Coronavirus Aid, Relief, and Economic Security (CARES) Act (S.3548), which is a $2.2 trillion aid bill as part of the ongoing response to the coronavirus pandemic. The president signed the bill into law the same day.
The CARES Act contains major provisions, including: direct payments to most Americans; expanded unemployment insurance; assistance to hospitals; lending programs to support states, cities, and businesses; changes to payroll taxes; and a fund to prevent small business layoffs. The bill also includes a provision for farmers, food insecurity and local food systems. This is a good first step to make sure the small farms and community food systems don’t get left behind in federal aid.
Farmers’ Guide to COVID-19 Relief – Farmers Legal Action Group is a nonprofit law center dedicated to providing legal services and support to family farmers and their communities in order to help keep family farmers on the land. They recently published, the Farmers’ Guide to COVID-19 Relief. This guide focuses on how the various CARES Act programs can provide relief to farmers.
At a Glance – The following programs offer relief to farmers, ranchers, and other agribusinesses:
- Coronavirus Food Assistance Program (CFAP)- Includes direct farmer aid through USDA FSA and the Farmers to Families Food Box Program.
- The Paycheck Protection Program and Economic Injury Disaster Loan program – Farmers, ranchers, and other agribusinesses are now eligible to apply.
- Business and Industry CARES Act Program – Loan guarantees to rural businesses and agricultural producers that are not eligible for USDA Farm Service Agency loans.
Coronavirus Food Assistance Program
As reported by NSAC on March 26 responding to the Senate version of the bill, the most significant agricultural provision is the creation of a new $9.5 billion disaster relief program to provide “support for producers impacted by the coronavirus.” The funding is reserved for:
- Specialty crop producers
- Livestock producers (including dairy)
- Producers that supply local food systems (including farmers markets, restaurants, and schools)
This funding is separate from the Commodity Credit Corporation, which has historically left out local and regional markets, specialty crop producers, or smaller-scale farmers who have fewer resources to draw on in times of economic stress or uncertainty.
Coronavirus Food Assistance Program (CFAP). CFAP will consist of two components: $16 billion in direct payments for commodity growers, specialty crop farmers, and livestock and dairy producers, and $3 billion in direct purchases of meat, dairy and specialty crops.
CFAP Direct Farmer Aid – USDA announced they will begin accepting applications for farmer direct payments on May 26. Farmers who produce specialty crops, livestock, dairy, wool, and commodity crops are eligible to apply. Visit https://www.farmers.gov/cfap for more information on eligibility and application process.
USDA Farmers to Families Food Box Program– The $3 Billion used to purchase fresh products is called the “Food Box Program” and is administered by the USDA Agriculture Marketing Service. AMS plans to partner with local and regional distributors — whose workforce has been significantly impacted by the closure of restaurants, hotels, schools and other food service entities — to procure and provide boxes of fresh produce, dairy, and meat products to food banks and other non-profits serving Americans in need.
For more information and resources on the two programs above, visit KRC’s FAQ – What is the Coronavirus Food Assistance Program (CFAP)? How do farmers receive this aid?
The Paycheck Protection Program is administered by the US department of Treasury. It provides small businesses (less than 500 employees) with funds to pay up to 8 weeks of payroll costs including benefits.
For more information on these two programs, visit KRC’s FAQ section, What is the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan Application (EIDL)? Are farmers/ranchers eligible to apply?
Business and Industry CARES Act Program
This program provides loan guarantees to rural businesses and agricultural producers that are not eligible for USDA Farm Service Agency loans.
It appears that lenders must first apply to participate in the program to make funds available to businesses. Interested borrowers should inquire about the program with their lender.
For more information visit – https://www.rd.usda.gov/programs-services/business-and-industry-cares-act-program
An economic analysis developed for NSAC found that farmers who have lost access to direct markets as a result of the ongoing COVID-19 crisis and “social distancing” restrictions stand to lose more than $1 billion in sales this year. The CARES Act is critical to ensuring that damage to small farm and local food systems is mitigated.
For ways to take action as the CARES Act impacts farms and rural communities, tune in to KRC and NSAC action alerts. For more information and analysis of the CARES Act as it relates to agriculture, food, and nutrition visit: https://sustainableagriculture.net/blog/closer-look-farmer-relief-senate-pandemic-package/Back to Farm & Local Food FAQs