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Policy Update: New Relief Package & Food Assistance Program

Policy Update: New Relief Package & Food Assistance Program

$484 Billion Relief Bill

Good news! Congress has passed and the President is expected to sign a $484 billion relief bill, which includes some important items for Maine farms.

The new aid package:

  • Provides $60 billion to replenish the Small Business Administration’s Economic Injury Disaster Loan (EIDL) Program, and now allows agricultural operations with fewer than 500 employees to qualify for EIDL, which offers emergency grants of up to $10,000 in cash to businesses that are losing revenue amid the coronavirus pandemic. However, we are hearing reports that EIDL might not be accepting new applications because of the backlog they had from the first round of funding.
  • Provides $310 billion to replenish the now-depleted Paycheck Protection Program (PPP), which provides forgivable loans to small businesses (including farmers) to keep their workers on the payroll. Of the funding provided, $60 billion is dedicated for small businesses lacking access to large financial institutions. The bill also includes $30 billion in set-asides for Community Development Financial Institutions (CDFIs), minority depository institutions and smaller lenders.

Coronavirus Food Assistance Program

At the end of March, Congress passed and the President signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which included $9.5 billion for agricultural producers impacted by COVID-19, including producers of specialty crops, producers that supply local food systems, and livestock producers. The CARES Act also provided an additional $14 billion for the Commodity Credit Corporation (CCC), which Congress has previously used to provide trade mitigation payments to commodity growers. The additional CCC funding will be available later this year.

On April 17th, the USDA announced its plan for distributing the funding that Congress has provided to aid farmers impacted by the COVID-19 pandemic. This plan, called the Coronavirus Food Assistance Program, includes $19 billion in funding ($9.5 billion from the CARES Act, $6.5 billion in already existing funding for the CCC, and $3 billion from a prior aid package called the Families First Coronavirus Response Act). The plan consists of two components:

  • Direct payments: $16 billion in direct payments for commodity growers, specialty crop farmers, and livestock and dairy producers. These direct payments will be administered through the USDA’s Farm Service Agency (FSA). Unfortunately, there was no mention of local food or direct market farmers in the description of this direct payment plan, which is contrary to the language provided by Congress in the CARES Act. We will continue to provide more information about the direct payment program as it becomes available.
  • Direct purchases: $3 billion in direct purchases of meat, dairy and specialty crops. These direct purchases will be administered through the USDA’s Agricultural Marketing Service (AMS) through a new “Food Box Program.” As part of this program, AMS will partner with local and regional distributors to procure and provide boxes of fresh produce, dairy, and meat products to food banks and other non-profits serving Americans in need. Many of the details about how this program will work are still unknown, but applicants will need to provide information about how they plan to work with small and local or regional farms as part of their proposed projects. So, this could be an opportunity for food hubs, community kitchens, and local food producers. More information about the program can be found HERE.

MFT will continue to work with farmers and partners across the state, Maine’s congressional delegation, and the Maine Department of Agriculture, Conservation and Forestry to ensure that funding is available for the producers in Maine who need it, and that there is support for Maine farmers and food businesses to address market disruptions, labor issues, safety needs, local food access for low-income community members, and all of the other issues that have resulted from this pandemic.

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