The $2 trillion CARES Act sets aside a little over $23 billion directed to support farmers and ranchers. The move to soften the financial impacts of convid-19 is welcomed, but questions remain. With little oversight and direction, how will Sonny Perdue and the USDA distribute the relief? We cannot let recent history repeat itself.
There was unprecedented federal aid to farmers over the past two years. Two separate trade aid payments (MFP) were distributed in an attempt to offset the loss of markets in the trade war with China. $14 billion was paid to producers in 2018. A year later in 2019, that payment inched up to $16 billion. The approximate $30 billion came from the Commodity Credit Corporation (CCC).
In the CARES Act, Congress sent $14 billion to replenish the CCC in the covid-19 relief bill. The CCC has few restraints on how that money can be spent. The 2018-2019 MFP came under scrutiny because of how Secretary Perdue rolled out that cash. Those payments went disproportionately to larger farming operations versus family farmers. “In America the big get bigger and the small go out.” Perdue said. Additionally, reports questioned the geographic and commodity distribution of the payments. For example, was Perdue sending more money to his home state? How would he be held accountable? NDx wrote about these questions earlier.
Listen: ND Farmers Union President Mark Watne talks about CARES Act on “Afternoons Live with Tyler Axness”
The CARES Act also provides $9.5 billion to support farmers and livestock producers. Commodities have been uniquely impacted by the pandemic. One tough example is corn. Less travel along with foreign oil fights have dropped oil prices. That has impacted ethanol and corn which was already taking it on the chin from the Trump EPA waivers.
Another example is cattle. Dairy products and cattle prices have seen an impact. Major costumers have been forced closed to flatten the curve. Live cattle prices dropped dramatically in March. Yet, boxed beef prices and packer margins continued to rise. Why? North Dakota Senators Kevin Cramer and John Hoeven have signed a letter urging the U.S. Department of Justice to investigate the situation.
At the same time, people are stocking freezers and pantries. Consumers are clearing the shelves of bread, pasta, and meats. How will the $9.5 billion be distributed to family farmers and ranchers along with the commodities where it is needed most? As outlined in our interview above, North Dakota Farmers Union is leading the charge to find answers.
Additionally, $25 billion was appropriated for food aid programs. Incomes for many Americans have been impacted. Unemployment claims surpassed 3 million last week. North Dakota saw unemployment claims in the last twelve days higher than all of 2019. Over 20,000 claims in twelve days. While other spending habits can be drawn back, everyone needs to eat. This is an important provision in CARES. Just a couple of weeks ago, the USDA was looking to make stringent changes to SNAP and other food aid programs. The timing would not have been worse.
The reality is, the economic impacts on farmers from covid-19 could be larger than the trade war with China. The overall $2 trillion relief package was unprecedented. It was also necessary. We don’t know if it will be enough to bridge the divide back to “normal.” We don’t even know when “normal” returns.
The passage of the CARES Act was only the beginning. Now that we’ve gotten beyond congratulatory press releases from politicians and signing ceremonies, it’s time to administer the programs. We need to keep a watchful eye on how Perdue issues that relief in a way that isn’t about election-year political handouts, but rather to benefit the hardworking ND family farmers.
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