Producer Assistance Announced But Few Details Available

A lot of concern has been raised about the Agricultural relief program that was announced late last week. There are not many details about the program available but rest assured your organizations are positioned to work with USDA when opportunities arise. Please see the article below directly from this weeks Cotton’s Week from the National Cotton Council.


Broad-Based Producer Assistance Outlined 

Late on April 17 Agriculture Secretary Sonny Perdue announced during the White House coronavirus briefing the general parameters of USDA’s initial relief to producers suffering losses from the COVID-19 impacts. The $19 billion package includes $3 billion in food purchases for donation to food banks and other feeding programs. These purchases will consist primarily of fruits and vegetables, dairy products, and meat products. The remaining $16 billion will be used for direct payments to producers of row crops, specialty crops, dairy and livestock. The overall funding allocation among these categories is not finalized, but the initial indication is approximately $4 billion for row crops, including cotton. 

For a commodity to qualify for support it must have suffered at least a 5% price decline between January 1 and mid-April of 2020. At this time, it is the NCC’s understanding that the payments will be determined based on two calculations: 1) 85% of the price decline between January 1 and mid-April and 2) 30% of the projected price decline through the next two quarters of 2020. Production eligible for support will be determined based on the quantity of the commodity that is still “at risk” as of January 1. At this time, determining payments to a producer is not possible given the lack of available details for the relevant prices and eligible quantities. USDA also announced a payment limit of $125,000 per commodity will apply with a total, overall maximum payment limit per person or entity of $250,000 if the farm has multiple commodities that qualify for payment. There also is an adjusted gross income test. 

The NCC is in regular communication with Congressional offices and the Administration about the remaining details and unanswered questions from USDA’s announcement. 

USDA is in the process of developing the regulation to implement the program and then must get the regulation approved by the White House Office of Management and Budget. USDA plans to begin the signup process sometime in May with the goal of issuing payments beginning in late May or June. 

The expectation is that USDA will utilize the $14 billion in additional Commodity Credit Corporation funding available in July for additional assistance. The NCC already is working with Congress on what needs to be included for multiple U.S. cotton industry segments in the next round of relief provided by Congress and the Administration.