As COVID-19-related losses mount in the U.S. farm economy, USDA Ag Secretary Sonny Perdue predicts the $16 billion in direct payments to producers through the Coronavirus Food Assistance Program won’t be enough.
“We’re looking at that right now, and our economist are working on those numbers, but we do believe that we were not able to sufficiently cover the indemnification from COVID-19 in the first tranche of the $16 billion program,” Perdue said during a one-day tour through Michigan on June 30.
Since opening for enrollment on May 26, Perdue estimates USDA has already disbursed $5 billion in direct CFAP payments to producers to compensate for market losses and disruptions. With two months remaining before the Aug. 28 deadline, more applications are expected.
Perdue said USDA is also reviewing disaster program options for an additional $14 billion, appropriated by Congress to replenish the Commodity Credit Corporation that will be available in July.
“We know that COVID-19 had some immediate impacts on agriculture, but we fear that it may have a longer tail going into the fall as well,” Perdue said. “We’re looking right now at what the effective damage was so we can create a program that could potentially use the $14 billion as well. There may be need for more, but we don’t know what the tale of the results of this COVID-19 will be going forward.”
According to Perdue, USDA’s $3 billion Farmers to Families Food Box Program has proven effective and popular, with an estimated 25 million food boxes now distributed to families in need. “Food Box is all about helping people who have need, and certainly those people who have lost their jobs and others can receive the food they need during this period of time in some sectors of the economy,” he said.
With restaurants, schools and institutional settings shutting down “almost overnight,” Perdue said the U.S. food supply chain experienced a major disruption due to COVID-19.
“We were eating about half of our food consumption outside of the home and there was a real misalignment that occurred from production that was going directly to that industry rather than the grocery chain side,” Perdue said. “It required us to really become nimble to realign that food supply.”
Source: Michigan Farm Bureau