OKLAHOMA CITY—U.S. Secretary of Agriculture Sonny Perdue announced the $19 billion Coronavirus Food Assistance Program (CFAP) April 18, 2020. The program is intended to support America’s farmers and ranchers amid the COVID-19 pandemic. The agriculture industry, already reeling from trade war fallout, has lost billions due to plummeting prices, sudden drops in demand and supply chain weaknesses.
“I am very disappointed in USDA’s CFAP relief plan,” said AFR/OFU Cooperative President Scott Blubaugh. “Agricultural producers across the nation are suffering through unprecedented market upheaval. Amid record losses and incredible market turmoil, USDA’s plan is an ineffective mess.
“Congress must provide additional funding to the agriculture sector immediately to avoid irreparable harm to America’s farmers and ranchers. If lawmakers fail to act now, our nation’s producers and our food system is in certain jeopardy.”
CFAP provides two forms of assistance—$3 billion in purchases of agriculture products, including meat, dairy and produce, to provide for those in need through food banks, community programs and faith-based organizations and $16 billion in direct payments to farmers and ranchers, funded through the $9.5 billion CARES Act emergency provisions and $6.5 billion in Credit Commodity Corporation (CCC) funding.
The $16 billion in direct payments to farmers and ranchers will include $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 other crops. The payment limit is $125,000 per commodity, $250,000 total per individual or entity.
“These amounts will be woefully inadequate for all commodities,” said Blubaugh. “Oklahoma agricultural producers were hopeful, but this program provides no real relief. Secretary Perdue has proven he’s out of touch with producers; I fear we will lose a lot of farmers and ranchers because of it.”
The $5.1 billion allocated to cattle producers is especially concerning. Following years of market volatility, they have spent the last few months fighting large meatpacking companies over possible market manipulation and other antitrust violations. There is an open USDA investigation addressing the concerns.
“Agricultural economists across the country have shown losses to be three times that of the CFAP payments to cattle producers,” said Blubaugh. “$5.1 billion may not even keep producers on their farms and ranches, much less prop up an entire industry. At best, this ‘relief’ will pay a little bank interest. It’s merely a Band-Aid on a much larger wound.”
According to USDA, producers will be compensated with a single direct payment determined using two calculations: 85 percent of actual price loss from Jan. 1 to April 15 and 30 percent of expected losses from April 15 through the next two quarters. USDA expects to begin CFAP sign-up in early May, with producers receiving payments by early June.
AFR/OFU Cooperative is a membership services organization established in 1905 as Oklahoma Farmers Union. AFR/OFU provides educational, legislative and cooperative programs across the state and serves as a watchdog for Oklahoma’s family farmers and ranchers and rural communities. The organization is actively supportive of the state’s agricultural industry and rural population with membership consisting of farmers actively involved in production agriculture and non-farmers adding their voice in support of AFR/OFU principles.