Last week, USDA Secretary Sonny Perdue announced a $19 billion Coronavirus Food Assistance Program (CFAP) that aims to support farmers, ranchers, and dairymen through the COVID-19 pandemic.
CFAP will use the funding and authorities provided in the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Families First Coronavirus Response Act (FFCRA), and other USDA existing authorities. The program includes two major elements:
- Direct Support to Farmers and Ranchers ($16 billion):The program will provide $16 billion in direct support based on actual losses for 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 caused by COVID-19.
What’s in it for Citrus Growers: Of the $16 billion, $2.1 billion will be paid to specialty crop producers for demonstrated losses caused by the COVID-19 pandemic. Producers will receive a single payment determined using two calculations:
- Price losses that occurred January 1-April 15, 2020. Producers will be compensated for 85% of price loss during that period.
- Second part of the payment will be expected losses from April 15 through the next two quarters, and will cover 30% of expected losses.
Resources provided under this program are an important start but only serve as a down payment. The payment limit, capped at $250,000 per entity, will not suffice for an agriculture sector that invests more per acre in the production, harvesting, handling and transportation than most other commodities. CCM and industry association partners across the Country are in constant contact with USDA, Congress, and the White House about these issues and are pushing for the payment limitation to be eliminated.
- USDA Purchase and Distribution ($3 billion):USDA will fund a “Food Box Distribution Program” that includes the procurement of an estimated $100 million per month in fresh fruits and vegetables, $100 million per month in a variety of dairy products, and $100 million per month in meat products. Under this program, contracted entities will provide a pre-approved box of fresh produce, dairy, and meat products to food banks, schools, community and faith based organizations, and other non-profits serving Americans in need.
The program requires all products to be 100% domestically grown and/or processed. Only fresh fruit and vegetables are eligible. There are no size, quality, or grade requirements so long as they are agreed upon by the contractor and the distributor (non-profit).
Unlike other government purchase programs, the Food Box Program will be implemented by distributors who submit a bid and are awarded a federal contract. The contractor will be 100% responsible for the full supply chain including procurement of product, assembly of boxes, transportation, and distribution to non-profit organizations that can receive, store and distribute food items. Contracts will be awarded in early May with shipments beginning in mid-May.
What’s in it for Citrus Growers: Citrus growers may benefit by the creation of this new market. The Box Distribution Program could be an alternative market for displaced product that would otherwise go to the food service sector. This program relies on existing relationships between suppliers and the contracted entities. We encourage citrus packers and marketers to seek out opportunities to supply those entities who will be submitting a bid for federal contract under this program.
Details of CFAP are still being released. CCM is working tirelessly to ensure the citrus industry benefits from the federal stimulus packages and the programs being created at USDA to assist producers who are and will incur losses due to the COVID-19 pandemic.
We will continue to provide information as we receive it. If you have questions about the stimulus packages or CFAP, do not hesitate to contact CCM President Casey Creamer or CCM Director of Government Affairs Alyssa Houtby at (559) 592-2790.