Relief For The Fresh Produce Industry

There is no question that COVID-19 has had devastating ramifications on various parts of the economy. Due to these effects, over the course of the past few months, the government has rolled out and enacted legislation to support businesses that have suffered. Within this legislation, there are three main programs in focus for the fresh produce industry that can be valuable to agricultural businesses and producers.

On April 17, 2020, United States Department of Agriculture Secretary Sonny Perdue announced the Coronavirus Food Assistance Program, a $19 billion immediate relief program. This program, referred to as CFAP, uses funding from two COVID-19 relief packages — the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Families First Coronavirus Response Act — and other existing USDA funding. The program includes two main elements — direct payments and purchase and distribution.

The first of the programs within CFAP consists of Direct Payments to growers who have suffered due to the pandemic. Surplus product coupled with the shutdown of a large part of the foodservice industry have had a devastating impact on growers. While these direct payments will not make growers whole again, they will certainly help bear the burden caused by the coronavirus.

According to USDA, these direct payments will provide “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.”

USDA’s Farm Service Agency and Agricultural Marketing Service hosted a webinar on May 14, 2020, outlining some initial details for the Direct Payments program. USDA evaluated commodity-specific losses from January 2020 to April 2020 for immediate assistance. Where possible, they evaluated near-future losses as well. Administrators acknowledged that these payments will only cover a portion of losses experienced due to COVID-19. The program is open to producers of crops, livestock, dairy and specialty crops regardless of size if you suffered losses.

With help from Congress and the Administration, the fresh produce supply chain has overcome challenges, persevered despite economic losses, and continues to serve America.

Additionally, participating in the Paycheck Protection Program and Economic Injury Disaster Loan program does not exclude you from being eligible for direct payments. More details will be available soon, but in the meantime, USDA encouraged interested producers to contact their Farm Service Agency at their local USDA Service Center.

The second aspect of CFAP, called the Farmers to Families Food Box, was created to purchase surplus product from agricultural producers that have been significantly impacted and distribute that product to those in need. The Farmers to Families program serves to eliminate the complicated predicament created by the coronavirus – growers and producers of fresh produce have excess product while people in need struggle to get healthy and wholesome food in the midst of this national emergency. This box program will bridge the gap between producers and consumers, specifically the ones that need it most.

To begin this process, USDA issued a solicitation for proposals, where organizations could apply to become offerors and create a food box with specific commodities. These food boxes would then be purchased by USDA and distributed to non-profit organizations that were identified and agreed upon by the offeror. This creative and innovative solution will be the largest purchase of fresh produce by the Administration in history.

Lastly, another source of relief for the fresh produce industry has been the wildly popular Paycheck Protection Program. Rolled out in the CARES Act, the Paycheck Protection Program loan program was created by the Small Business Administration as an incentive for small businesses to keep their workers on payroll. Loans will be fully forgiven if employees are kept on payroll for eight weeks and the money is used for specific purposes, including payroll, rent, mortgage interest, or utilities.

The program was so popular that funds were depleted quickly. The initial round of funding of $350 billion was exhausted within two weeks. However, Congress took action to replenish the fund with additional money for small businesses – and an additional $310 billion was added in the Paycheck Protection Program and Health Care Enhancement Act. Although there were hurdles to overcome through the process, many small businesses, including agricultural entities, have benefited from this program.

With help from Congress and the Administration, the fresh produce supply chain has overcome challenges, persevered despite economic losses, and continues to serve America by providing healthy and nutritious food during a global disaster.