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New aid bill would open SBA economic injury funds to farmers

Senate action follows farm group complaints

The economic aid bill the Senate passed Tuesday would give farmers another pool of federal loans and grants to tap by ending restrictions on agricultural eligibility for the Small Business Administration’s economic injury disaster program.

By voice vote, the Senate sent the $483.4 billion bill, the latest COVID-19 economic rescue measure, to the House, which could act on the legislation as early as Thursday.

Farm groups had complained that although Congress pumped $10 billion into the program in March legislation, it left unchanged language that shut out much of agriculture. Aquaculture, plant nurseries and small agricultural cooperatives could apply for up to $2 million in low-interest loans, but farms and ranches with 500 or fewer employees were ineligible.

COVID-19 has caused a domino effect in the agriculture and food supply chains as public health closures and service restrictions have hit farmers markets, restaurants, food service suppliers and other customers for small farmers as well as larger beef, poultry and pork operations.

The new bill says the loan and emergency grant programs are to use language from an SBA statute that defines agricultural enterprises as “those small business concerns engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural-related industries.”

Senate Majority Leader Mitch McConnell said that thanks to the efforts of Senate Agriculture Chairman Pat Roberts, R-Kan., Sen. Steve Daines, R-Mont., “and our other colleagues from rural states, it will be clear that farmers and ranchers are eligible.”

Sen. Benjamin L. Cardin, D-Md., called the economic injury program important for small businesses because it “gives them working capital … so businesses can stay afloat.” 

More than 30 organizations joined in an April 1 letter to the SBA saying that the previous economic rescue package did not explicitly exclude farms and that the agency should follow congressional intent.

“While agricultural enterprises had not previously been able to participate in the underlying EIDL program, there is every reason to believe Congress intended for agricultural producers to be able to participate during the COVID-19 emergency,” the letter said, referring to the Economic Injury Disaster Loans program.

“Many agricultural producers need access to this critical source of financing to help preserve their businesses and avoid further disruptions to our economy and food systems,” the groups wrote.

The agency told the groups that Congress would have to clearly indicate that farms with 500 or fewer employees were eligible.  

The bill text released Tuesday would increase funding authorization for the loan program to $50 billion, up from $10 billion in the March economic relief package. The legislation would add $10 billion to the emergency economic injury disaster grants created by the earlier relief law. 

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