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Bill would add food aid, give ethanol, livestock loss relief

Bill calls for $16.5B in direct payments to farmers and ranchers hurt by COVID-19

The bill would provide compensation to farmers who had to kill livestock because the COVID-19 pandemic had sickened workers and closed meat packing plants.
The bill would provide compensation to farmers who had to kill livestock because the COVID-19 pandemic had sickened workers and closed meat packing plants. (Chen Bin/VCG via Getty)

Farmers struggling with lost markets because of COVID-19 would receive more federal aid under a Democratic draft economic relief bill released Tuesday and food stamp beneficiaries would see a 15 percent temporary boost in monthly benefits.

The bill also would provide more than $14 billion in additional funds for programs to provide food for the poor. The measure would also provide supplemental payments to dairy farmers with small to mid-sized operations enrolled in a dairy insurance program and commercial dairy processors would be eligible for recourse loans to help them with their operations. To move surplus milk and other dairy products out of the market, the bill would create a dairy donation program.

The bill calls for $16.5 billion in direct payments to farmers and ranchers hurt by COVID-19 with a focus on those who do not qualify for payments out of the $16 billion in direct payments the Agriculture Department announced in April for economic losses and that is expected to be distributed in June. The proposed payments would come from unspent Treasury funding and could serve as a second-chance fund for hog farmers and other livestock producers who say payment limits that apply to the USDA money mean inadequate payments to cover their losses.

The legislation would give the USDA authority to reimburse beef, pork and poultry farmers for euthanization of healthy market-ready animals they have been unable to send to slaughter because processing plants closed or reduced operating levels as hundreds of workers tested positive for the virus that causes COVID-19, became ill or stayed away out of fear of becoming infected. The USDA can currently pay indemnities for depopulation of herds or flocks but not for killing healthy cattle, hogs or poultry because markets have collapsed. The bill would allow payments to cover up to 85 percent of the value of animals killed.  

Lawmakers also included language to allow the USDA to use funds in the Commodity Credit Corporation to provide aid “to agricultural processing plants in the event of a public health emergency in order to assure the continuation of markets for agricultural commodities.” The bill would amend the charter of the CCC to allow the expanded authority.  

Biofuel producers, particularly ethanol makers, would get an economic lifeline with a proposal to pay 45 cents a gallon to qualifying fuel produced between Jan. 1 and May 1. The renewable fuels industry has been battered as demand for transportation fuels sharply declined because millions of people remained home rather than commuting to work. The decline in demand sent a ripple through parts of the Midwest where a third of corn production goes into ethanol.

Zippy Duvall, president of the American Farm Bureau Federation, said ethanol plants have idled or closed, weakening local economies.

“Ethanol is a big part of rural America. Now those plants are closing down. That’s going to affect corn prices. Corn is really facing a difficult time,” Duvall said, noting that corn farmers also may lose animal feed sales as livestock producers reduce their herds. He spoke at a Bipartisan Policy Center session on the U.S. food supply chain.

House Democrats included the agriculture and food provisions as they try to address economic disruptions that worsened conditions for many farmers already coping with nearly six years of low market prices and two years of trade conflict between the U.S. and China, the European Union and other trading partners.

The rapid increase in unemployment from 3.5 percent in February to 14.7 percent in April means more people in need and increased demand at food banks and for the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps.

Katie Fitzgerald, executive vice president and chief operating officer of Feeding America, said member food banks have seen on average a 70 percent increase in demand. Fitzgerald told a Bipartisan Policy Center digital forum Tuesday that about 40 percent of people now coming to food banks are new.  

SNAP increase

The bill would provide $10 billion for SNAP to handle increased administrative costs and an expected enrollment increase. Supporters of SNAP have called for increased benefits to help low-income families expand their buying power during the economic downturn. The bill’s proposed increase in SNAP aid would be similar to a short-term bump in monthly benefits under the Obama administration in the aftermath of the Great Recession.

People receiving the minimum food stamp benefit of $16 a month would see the amount set at $30 per month under the bill. The legislation also would direct the USDA to allow people to use their food stamp benefits at approved retailers to buy hot foods. States currently must submit requests for waivers to the USDA to enable SNAP recipients to make such purchases.  

The bill would continue prohibitions on the USDA using funds to move forward with proposed rules that would reshape SNAP with several pending regulatory changes that would toughen work requirements for able-bodied adults without dependents, tighten eligibility requirements and change the way monthly benefits are calculated. 

Other food and agriculture provisions in the bill include:

  • $3 billion in emergency funding for child nutrition programs, including reimbursements to school meal providers.
  • $1.1 billion for the Women, Infants and Children program for pregnant women or mothers with children 5 years old and younger.    
  • $150 million for The Emergency Food Assistance Program to purchase agricultural products that are donated to food banks and other nonprofit groups.
  • $20 million for the Farm and Ranch Stress Assistance Network to connect farmers, ranchers and others in agriculture to mental health or support services. 

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