President, USDA Announce COVID-19 Aid for Agriculture
On Friday night, President Trump and USDA Secretary Sonny Perdue announced the Coronavirus Food Assistance Program (CFAP), a $19 billion economic aid package for the nation’s farmers and ranchers impacted by the COVID-19 emergency. The aid will include $16 billion in direct payments to farmers and ranchers as compensation for economic losses suffered as a result of the COVID-19 crisis, as well as $3 billion in purchases of agricultural products which will be directed to food banks and other organizations working to feed those in need during the pandemic.
The $16 billion in direct payments will be funded by a combination of the $9.5 billion appropriated to USDA under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and $6.5 billion in Credit Commodity Corporation funding.
Cattle producers will receive the largest share of relief of any commodity, at $5.1 billion. A press release issued by Senator John Hoeven (R-ND), chairman of the Senate Agriculture Appropriations Committee, clarified how the $16 billion in direct aid will be apportioned:
- $9.6 billion for the livestock industry, including $5.1 billion for the cattle industry, $2.9 billion for dairy, and $1.6 billion for pork
- $3.9 billion for producers of row crops
- $2.1 billion for producers of specialty crops
- $500 million for producers of other crops
According to the press release from Sen. Hoeven’s office, producers will receive a single payment that incorporates two calculations: (1) compensation for 85% of price losses incurred between January 1 and April 15, and (2) compensation for 30% of expected losses from April 15 through the next two quarters. A producer’s compensation for any given commodity will be capped at $125,000, and any producer’s overall compensation will be capped at $250,000.
USDA is expediting the rulemaking process to facilitate the direct payments. The agency anticipates that the program will be open for applications in early May and hopes to disburse payments in late May or early June. CCA will provide members with additional details about the direct payments as they become available.
As CCA detailed in an email to members last Tuesday, the National Cattlemen’s Beef Association (NCBA) provided USDA an economic analysis which demonstrates that the cattle industry stands to lose $13.6 billion from the present crisis. On Friday night, NCBA issued a press release praising USDA for their quick action to provide relief to ranchers reeling from market impacts related to COVID-19, but noted that “While the relief funds…represent a start to stabilizing the industry, there is much more work to be done to protect the cattle producers who are an essential component of the agriculture industry and the anchor for rural America.”
Regarding the planned $3 billion in commodity purchases, USDA announced that it will begin procuring about $100 million per month each of meat, dairy and fresh produce products which distributors and wholesalers will then send to food banks and other nonprofits feeding those in need during the COVID-19 pandemic. According to NCBA, however, it is not anticipated that beef products will be included within these purchases.
Specific details of the CFAP are still forthcoming; CCA will keep members apprised of details regarding the $19 billion relief package, as well as any future relief efforts from the federal government.
SBA’s Paycheck Protection Program Exhausts Funding—for Now
On Thursday morning, the Small Business Administration (SBA) announced that it had exhausted the $349 billion in loan funding that had been allocated by Congress for the Paycheck Protection Program (PPP). While Democrats and Republicans were unable to reach a deal last week to infuse the program with additional funding, a deal is likely to be struck early this week to reinvigorate the program. According to Secretary of the Treasury Steven Mnuchin, the legislation is likely to include $300 billion in additional funding for the PPP as well as $50 billion in additional funding for the SBA’s Economic Injury Disaster Loan (EIDL) program.
While lenders are unable to process PPP loans until the program’s funding is replenished, CCA recommends that members interested in applying for the high-demand program have their loan applications and relevant documents prepared so they may file without delay once the program is again funded.
Under the PPP, any small business with under 500 employees—including an agricultural producer—is eligible for a loan of up to $10 million. The program is retroactive to February 15, and loans are available through June 30 on a first-come, first-served basis. Loans are 100% forgivable so long as funds are used for approved expenses and employers do not terminate or cut the pay of employees.
SBA has clarified that the PPP is available even to ranchers who do not have employees. The USDA has provided guidance for sole proprietors, independent contractors and other self-employed individuals under the “Paycheck Protection Program” drop-down menu here.
CCA has heard from numerous ranchers concerned that they are not eligible for SBA’s EIDL program. While there was clear Congressional intent in the Coronavirus Aid, Relief and Economic Security (CARES) Act that farmers and ranchers should be eligible for the EIDL program, SBA has required businesses to certify that “Applicant is not an agricultural enterprise (e.g., farm), other than an aquaculture enterprise, agricultural cooperative, or nursery.”
CCA, NCBA and numerous other agricultural associations and Congresspeople are aware of the problem and are actively working to ensure that SBA opens up the EIDL program to farmers and ranchers.
CCA also encourages members to explore loan options outside of SBA. For instance, the California Infrastructure and Economic Development Bank has been allocated $50 million to provide loan guarantees to small California businesses that do not qualify for federal loan funding. Additionally, many cities and counties have implemented local loan guarantee programs for small businesses.
Should you require assistance in navigating available federal, state and local loan programs, please do not hesitate to reach out to the CCA office.
Governor Newsom Mandates COVID-19 Sick Leave for Food Industry Employees
On Thursday, Governor Gavin Newsom issued an Executive Order mandating that food industry employers provide two weeks’ worth of supplemental paid sick leave to employees who have contracted COVID-19 or been exposed to the virus. The Executive Order applies to employers with 500 or more employees, supplementing the federal Families First Coronavirus Response Act—signed into law March 18—which requires employers with fewer than 500 employees to provide two weeks’ worth of paid sick leave to employees impacted by COVID-19.
The order applies to employers and employees engaged in “agricultural operations” including “The raising, feeding and management of livestock.”
Full details regarding calculation of the paid sick leave benefit are available in the Governor’s executive order, here. Should you have any questions regarding the supplemental COVID-19 paid sick leave, please contact the CCA office.
CalEPA Suggests Openness to Limited Regulatory Relief
On Wednesday, the California Environmental Protection Agency—which includes the California Air Resources Board, State Water Resources Control Board and Department of Pesticide Regulation, among other boards—issued a press release regarding its enforcement of environmental regulations during the COVID-19 crisis.
CalEPA asserted that the agency “will continue to respond, investigate, and – when necessary – take action on complaints related to environmental non-compliance.” The agency also promised to “fill any enforcement gaps left by the U.S. EPA’s decision to reduce environmental oversight,” a reference to the federal EPA’s March 26 enforcement discretion policy adopted in recognition of COVID-19 impacting “the ability of regulated facilities to meet all federal regulatory requirements,” such as those relating to routine monitoring and reporting.
CalEPA did suggest, however, that it may be open to easing some regulatory burdens for a limited time in response to COVID-19. The agency wrote that “CalEPA also recognizes that some regulated entities may need additional compliance assistance as a result of the COVID-19 pandemic. Specific time-delimited remedies, such as the extension of deadlines, may be warranted under clearly articulated circumstances, but regulated entities that cannot meet a specific regulatory requirement due to emergency government directives or a specific hardship must contact the appropriate CalEPA board, department or office before falling out of compliance.”
CalEPA’s statement came the same day as dozens of industry groups, headed by the California Chamber of Commerce, requested that Governor Newsom “issue an Executive Order temporarily suspending all pending new rulemaking, as well as any rules or amendments first taking effect after your stay-at-home order of March 19, 2020, not urgently needed to protect public health, for all state agencies and commissions for at least six months.” While it is not clear that the Administration would be willing to take such sweeping action, the coalition also outlined 16 specific regulatory initiatives which it suggested could be delayed.
CCA urges members interested in seeking targeted regulatory relief from CalEPA to contact CCA staff to discuss specific requests.
Caltrans Authorizes Overweight Vehicles to Transport Essential Goods
On Monday, the California Department of Transportation (Caltrans) issued a news release announcing that it is issuing special permits authorizing overweight trucks to deliver emergency COVID-19 supplies. The permits increase the maximum allowable gross vehicle weight from 80,000 pounds to 88,000 pounds and are valid until further notice from the agency.
On Friday, in response to requests for clarification from CCA and other organizations, Caltrans clarified that livestock are among the “essential goods” for which the special permits would be issued.
For more information, see Caltrans’ news release.
Governor Outlines Six Key Indicators Before Stay-at-Home Will be Lifted
On Tuesday, Governor Gavin Newsom released California’s roadmap to modify the stay-at-home order. The document outlines the conditions needed to be achieved before the state can begin to ease up on some of the COVID-19 restrictions put in place early last month. The six indicators outlined in the roadmap are:
- “The ability to monitor and protect our communities through testing, contact tracing, isolating, and supporting those who are positive or exposed”;
- “The ability to prevent infection in people who are at risk for more severe COVID-19,” including older Californians and immunocompromised individuals, and the ability to prevent disease spread in facilities such as assisted living homes and prisons;
- “The ability of the hospital and health systems to handle surges,” including sufficient supply of hospital beds, ventilators and personal protective equipment;
- “The ability to develop therapeutics to meet the demand” to treat COVID-19 patients;
- “The ability for businesses, schools, and child care facilities to support physical distancing”; and
- “The ability to determine when to reinstitute certain measures, such as the stay-at-home orders, if necessary,” such as in the event of a ‘second-wave’ outbreak.
The Governor emphasized that there is no set timeline for when the stay-at-home order will be lifted and suggested that life will be different once the economy is opened again, with lingering precautions such as fewer tables at dining establishments and face-coverings remaining commonplace in public spaces.
USDA to Investigate Cattle Markets at Request of NCBA
On April 8, CCA affiliate the National Cattlemen’s Beef Association called on President Donald Trump to order an investigation into irregularities in the cattle markets in the days and weeks following the outbreak of the COVID-19 pandemic.
In a letter to President Trump, NCBA President Marty Smith asked for the President’s “immediate attention in addressing the market volatility and damages experienced in the cattle production sectors of the U.S. beef supply chain.”
Specifically, Smith asked that the President direct USDA to expand its existing investigation into market activity after the Holcomb fire to include market volatility during the COVID-19 crisis with the aim of “identifying whether inappropriate influence occurred in the markets, and to provide our industry with recommendations on how we can update cattle markets to ensure they are equipped to function within today’s market realities.” Smith added that USDA should work closely with the Department of Justice should the investigation uncover any wrongdoing.
Additionally, NCBA requested that the President direct the Commodity Futures Trading Commission to study the influence of speculators on futures contracts “to determine whether the contracts remain a useful risk-management tool for cattle producers.”
Within hours of NCBA’s request, Secretary of Agriculture Sonny Perdue announced via Twitter that the “USDA’s Packers and Stockyards Division will be extending our oversight to determine the cause of divergence between box and live beef prices, beginning with the Holcomb Fire in KS last summer and now with COVID-19.”
Smith was quick to praise Secretary Perdue’s announcement, issuing a press release thanking “President Donald Trump and Agriculture Secretary Sonny Perdue for their quick response to NCBA’s request to expand the agency’s investigation into the cattle markets.”
CCA will keep you apprised of any developments in USDA’s investigation and any results or advisories resulting from the probe.
Assemblymen Announce California Farmworker COVID-19 Relief Package
On April 8, Assemblymen Robert Rivas (D-Hollister) and Eduardo Garcia (D-Coachella) announced a five-bill “California Farmworker COVID-19 Relief Package.”
The cornerstone of this package is AB 2915, the “Farmworker COVID-19 Health and Safety Act.” While the “gut-and-amend” language of the Farmworker COVID-19 Health and Safety Act was not in print as of press time (and thus many details of the proposal remain unclear), according to Assemblyman Rivas the bill will, among other things:
- Expand paid sick leave for farmworkers from 3 days to 2 weeks;
- Provide an additional $3 per hour in ‘hazard pay’ during the coronavirus emergency to compensate farmworkers for increased health and child care costs;
- Provide subsidies to counties, employers and others who provide childcare to the children of farmworkers;
- Codify guidance on COVID-19 protections (such as personal protective equipment) for farmworkers; and
- Provide temporary housing to farmworkers to allow for appropriate social distancing;
The package also includes AB 2956, which provides tax credits for agricultural employers to offset mandatory ag overtime expenses.
The package of bills also seeks to enhance telehealth and e-consult services for rural hospitals, streamline approvals for small-unit housing developments and expand electronic filing in the state’s trial courts, all to improve accessibility to farmworkers.
Details of this legislation will emerge as the Legislature returns to business in Sacramento. CCA is tracking these bills and will continue to keep you informed as more information is released about the proposed legislative package.