Soy staff interpret USDA’s assistance program; encourages continued engagement04/23/2020 | Soybean News, Economics, Covid-19 Updates
By Bethany Baratta, ISA senior writer
There are a lot of questions surrounding the $19 billion Coronavirus Food Assistance Program (CFAP) recently announced by the U.S. Department of Agriculture. We asked Christy Seyfert, executive director of government affairs for the American Soybean Association and Michael Dolch, public affairs director for the Iowa Soybean Association (ISA) to weigh in on some of these questions.
Q: The USDA announced the $19 billion Coronavirus Food Assistance Program (CFAP) to support farmers and ranchers during the COVID-19 pandemic. What does it mean for soybean farmers?
Christy: In short, it means that assistance is ahead. USDA has indicated that details beyond its recent announcement are not yet final because the package is in the federal approval process. What we do know from that announcement is that $16 billion will be directed to ag producers in the near-term due to COVID-related price losses in early 2020. USDA has shared in discussions with us that soybeans will be eligible for this program and that the program will not be tied to 2020 production so as not to incentivize plantings.
Q: What does this mean for Iowa’s farmers, many of whom raise both crops and livestock?
Michael: We understand farmers are facing unprecedented market drops and supply chain disruptions. The USDA’s recently announced Coronavirus Food Assistance Program (CFAP) takes important steps to help stabilize markets, keep farms afloat, and protect the agricultural supply chain. The first $16 billion of the program will provide direct support based on actual losses resulting from lost demand and short-term oversupply. The remaining $3 billion will be used to purchase and distribute fresh produce, dairy and meat products in areas significantly impacted by the outbreak. Coming at a critical time, this direct assistance and product purchase will extend a helping hand to farm families that have already been hit by trade wars and severe weather.
Even though the CFAP will provide direct support to those who have experienced significant losses during the pandemic, the massive demand destruction remains the underlying problem. Creating a demand for both crops and livestock, even if artificial, should strengthen commodities prices. USDA has also made it clear that farmers and ranchers may apply for assistance regardless of their operation size or market outlet.
ISA will continue to monitor and share key developments as the program moves through an expedited rulemaking process that should yield more details in the coming days. To that end, it’s clear the $16 billion in direct support to farmers and ranchers will help offset COVID-19 related losses, as well as the $3 billion in commodity purchases.
Q: Any indication this will take the place of a Market Facilitation Program (MFP) payment? How do you see that playing out?
Christy: Before USDA announced the CFAP package, ASA sent a letter to Secretary Perdue requesting an assistance payment to soybean growers based on the lack of price recovery due to China tariffs and the COVID-19 price effect. While we were encouraged by the signing of the Phase I U.S.-China agreement in January, the soybean market has not yet rebounded and COVID compounded the difficult market situation.
Our understanding is that requests received by USDA exceeded available resources, and USDA crafted the CFAP package in a way that would address a variety of needs in production agriculture due to COVID-19. Congress will likely need to consider providing additional resources to USDA for future rounds of assistance, whatever form that may take.
Q: With planting underway in the state for some farmers, will this announcement have any impact on what crops are planted in the state?
Michael: No, farmers shouldn’t make planting decisions based on the CFAP and other relief programs when entering the field this spring. Instead, folks should plant for the factors that are normally considered – seeding mechanics, cropping systems, weather, etc. With this in mind, USDA has disclosed the payments will be determined using two calculations. One part of the payment will be determined from price losses that occurred January 1 through April 15. The other part will be derived from losses from April 15 through the next two quarters.
Here at ISA, we’re working with federal partners to help guide implementation and ensure CFAP payments aren’t limited by insurance indemnities. Since face-to-face interaction at local FSA offices will remain limited going forward, the USDA is working to implement an online self-application and certification process.
Q: How are you and your staff staying engaged in issues important to U.S. soybean farmers in the midst of this global pandemic?
Christy: I am so proud of the ASA team across the board for their commitment during these uncertain times. As for the DC team, in addition to advocating, communicating, and responding to soybean growers on a multitude of COVID-related issues, we remain focused on ASA’s priority issues, including trade, biodiesel, infrastructure, and a variety of farm policy needs such as biotechnology and crop protection. Highlights of recent weeks – beyond COVID activity – include discussing China’s trade commitments with USTR, engaging on biotech and crop protection issues with Mexico, filing comments regarding trade opportunities with Kenya, tracking litigation activity related to RFS as well as crop protection products, working with the communications team to issue action alerts on inland waterways funding, and hiring new DC lobbyists to build out ASA’s in-house, dedicated team.
Our ability to represent ASA well in our nation’s capital is possible thanks to regular interactions with board members, information shared by state staff, involvement with coalitions, and strong relationships with industry partners and policymakers. We appreciate that our contacts in the Administration and on Capitol Hill are providing a high level of responsiveness on issues of importance to ASA.
Q: How can Iowa farmers engage with their local and state leaders on important issues during this time of social distancing and government closures?
Michael: Just as commodity markets have been disrupted, so have many aspects of traditional engagement with thought leaders and Iowa’s elected officials. Yes, the preferred tabletop conversation with policymakers has challenged the way business is done, but we see this as an opportunity disguised as a challenge. Farmers should continue to engage and share issues, concerns and personal stories with state and local leaders via email or by phone. If we’ve learned anything since the virus took hold and social distancing guidelines were implemented, it’s the true power and reach of social media and virtual connectivity.
While COVID-19 is front-and-center, we continue priority work on the periphery. ISA Advocates members are having foundational conversations and laying the groundwork for when we return to some semblance of normalcy. The actions being taken today will ensure that we stay nimble and are able to shift quickly from emergency relief and funding to trade, biodiesel, transportation and infrastructure, and other policy issues impacting soybean farmers.
Contact Bethany Baratta at email@example.com.
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