Share

Newhouse Leads 126 Colleagues in Urging Elimination of Payment Limits for Livestock, Dairy, Produce

April 23, 2020
Press Release

WASHINGTON, D.C. – Today, Rep. Dan Newhouse (R-WA) led 126 colleagues in a bipartisan letter to President Trump urging the elimination of payment limits for livestock, dairy, and produce farmers in the Coronavirus Food Assistance Program (CFAP).

The letter – spearheaded by Reps. Dan Newhouse (R-WA), Jimmy Panetta (D-CA), Mike Simpson (R-ID), Jim Costa (D-CA), Henry Cuellar (D-TX), Fred Upton (R-MI), Xochitl Torres Small (D-NM), and Roger Marshall (R-KS) – outlines the severe losses facing producers in the livestock, dairy, and produce industries during the United States’ response to the COVID-19 pandemic and requests that payments to farmers be responsive to the disaster situations they are facing.

“Our nation's food producers have and will continue to face significant losses this spring and beyond due to COVID-19,” said Rep. Newhouse. “I sincerely appreciate President Trump and Secretary Perdue for making our agriculture industry a top priority and working to provide relief to American farmers and ranchers through these unprecedented times. We must make sure this relief is proportionate with the losses producers face. I will continue to work with the Administration and my colleagues in both the House and Senate to ensure Central Washington’s farmers receive the aid they need.”

Full text of the letter can be found here and below.

Dear President Trump,

Thank you for your announcement of the Coronavirus Food Assistance Program (CFAP). For many family agricultural operations, this support will mean they are able to stay in business and pass farms and ranches on to the next generation of producers in spite of these challenging times.

However, we are concerned about the $125,000 per commodity and $250,000 per individual or entity payment limits as it relates to assistance for the livestock, dairy and specialty crop sectors. This limitation would severely restrict the program’s effectiveness for many family-owned farms and ranches across the nation. We strongly urge you to eliminate payment limits for livestock, dairy and specialty crop producers before the final CFAP program details are announced.

The COVID-19 crisis has caused unprecedented damage to the livestock, dairy and specialty crop industries. Agricultural economists have estimated over $13 billion in harm to the cattle industry and $5 billion to the pork industry due to the pandemic, with many billions more in injury to dairies, fruit, nut, and vegetable producers, and the horticulture and floriculture industry. As is true for many other small businesses across the country, this financial harm comes through no fault of these farmers and ranchers, nor is it the result of typical market forces. As such, these relief payments should aim to indemnify as much loss as possible without restrictive payment limitations.

While some farmers and ranchers produce multiple commodities, and therefore will be eligible for up to the $250,000 total payment limit per individual or entity, many cattle, pork and dairy operations are solely invested in livestock. This common business practice within the cattle, pork and dairy industries of being invested in a single commodity means this payment limit structure will be even more severe for these producers compared to other commodities. Fruit and vegetable producers by comparison can have very high costs of production—strawberry producers can invest $30,000 an acre for example—and thus payment limits of this level are too restrictive to meaningfully address the losses many producers are facing.

It is critical for USDA to provide a level of support that is responsive to the disaster situation producers are currently facing. As you know, Congress approved $14 billion in the CARES Act to partially replenish the Commodity Credit Corporation and we believe that a significant portion of these dollars should be used to ensure that needs are met, even if the payments must be paid in tranches.

We appreciate the support you and Secretary Perdue have provided farmers and ranchers, and we look forward to working with you make certain agricultural producers receive the level of assistance necessary in response to COVID-19.

Background:

The CFAP uses funds allocated by the Coronavirus Aid, Relief, and Economic Stability (CARES) Act, the Families First Coronavirus Response Act, and existing USDA authorities to provide relief to farmers and ranchers across the country during the COVID-19 response.

USDA designed the program to provide $16 billion in direct payments to farmers, with $9.6 billion allocated for livestock, $3.9 billion for row crops, $2.1 billion for specialty crops, and $500 million for other agriculture products.

Under the current guidelines, payment limits are set at $125,000 per commodity with an overall limit of $250,000 per individual or entity.

Issues: