US to pay farmers another $14bn of aid

The US today allocated an additional $14bn of aid to farmers coping with market disruptions and losses spurred by the ongoing Covid-19 pandemic.

The new layer of federal payments adds to more than $30bn of coronavirus aid announced earlier this year from the CARES Act and the US Department of Agriculture's (USDA) first relief package, further extending the federal government's role in offsetting virus-related market losses this year.

"America's agriculture communities are resilient, but still face many challenges due to the Covid-19 pandemic," secretary of agriculture Sonny Perdue said today. "We developed a program to better meet the needs of those impacted."

The USDA will draw from the Commodity Credit Corporation (CCC) and CARES Act to fund the added aid, which is designated as the second installment of the agency's Coronavirus Food Assistance Program (CFAP 2).

Payments under CFAP 2 will be distributed under three categories that are determined by crop and livestock type and payment rates. Applications for CFAP 2 open on 21 September and close on 11 December.

Livestock, corn, wheat, soybeans, cotton, barley and sunflower farmers are eligible for payments under the Price Trigger Commodities category. Non-livestock farmers must prove a minimum 5pc price loss during a specific period, and payments will be calculated based on 2020 acreage.

Payments to poultry and egg farmers will be based on 75pc of the producer's 2019 production, while dairy payments will be based on milk production between 1 April and 31 August. Payments to beef, hogs and pigs, lambs and sheep farmers will be determined on inventory levels on a date selected by the farmer between 16 April and 31 August.

Today's announcement drew praise from various agricultural advocacy groups, after the first layer of CFAP payments attracted industry criticism.

The National Cattlemen's Beef Association (NCBA) today said the deadline and timing of the first round of CFAP payments "left many producers out in the cold," and the second wave of aid will help relieve prevailing economic stress.

"The initial CFAP payments served as an important stopgap in the immediate wake of the coronavirus," NCBA vice president of government affairs Ethan Lane said. "Unfortunately, many in our industry are still reeling from abnormal marketing decisions they were forced to make in the spring, unprecedented supply chain disruptions and an overall tumultuous farm economy."

American Farm Bureau president Zippy Duvall echoed the sentiment from the NCBA, adding farmers "are still feeling the effects of trade imbalances and severe weather".

"This lifeline will keep farmers and ranchers afloat as they continue to keep America's pantries stocked," Duvall said.

By Connor Hyde