Will COVID-19 stimulus reach all farmers?

The COVID-19 crisis is unsettling well beyond the immediate health threat. It is evolving day-to-day with an uncertain future, destabilizing the economy at large and pushing more farmers close to the edge. As details trickle out from the $2 trillion stimulus package agreed to last night by the Senate and White House, there are growing concerns that many family farmers and food system workers will be left out.    

Farmers were already struggling to make ends meet prior to the COVID-19 crisis. For more than six years, farmers have been managing low incomes, rising costs, increasing debt and bankruptcy, volatile export markets (exacerbated by President Trump’s tariff fights) and a series of extreme weather events tied to climate change. Now, the fast-moving, unprecedented COVID-19 situation is creating new disruptive challenges for farmers and our food system. Here is some of the fall-out from COVID-19 that we are seeing so far: 

• Dairy — The closing of schools (which accounted for 7% of the fluid milk consumed in the U.S.) and restaurants (major cheese purchasers) eliminated two important markets. Co-ops are considering milk dumps to deal with excess supply. Dairy farmers are already caught in a multi-year price slump. The US saw the loss of 3,200 mostly small to mid-sized dairy farms last year.  

• Beef — Beef prices have dropped between $250 and $300 per head as companies and investors respond to a dramatic drop in people eating out. Cattle ranchers were already calling for a federal investigation into the widening gap between prices paid to producers and the costs consumers pay in the supermarket for beef. In a tacit acknowledgement that meat industry profits at a time of COVID-19 are bad optics, Tyson Foods and Cargill are temporarily lifting their prices to farmers and increasing wages to workers.  

• Corn — Corn futures dropped 11% in the six weeks preceding March 17. Those prices are partially affected by Saudi Arabia’s recent ramp up of oil production, leading to lower fuel prices that undercut the corn ethanol market. Domestic ethanol producers are losing an estimated 25 to 45 cents per gallon. Commodity crops (particularly soy) that are part of global markets have been adversely affected by the trade fights with China and other major export markets.  

• Local markets — Farmers selling domestically and locally through farmers markets, local restaurants and institutions like schools and hospitals have already been affected by COVID-19 and social distancing. Researchers estimate that across key local and regional markets there will be up to a $688.7 million decline in sales and a total loss to the economy of up to $1.32 billion from March to May 2020. Many of these farmers, often beginning farmers, deeply rely on off-farm jobs to stay afloat — jobs that are also being threatened by the economic slowdown. Farmers selling into these markets were not eligible for the massive trade aid payments over the last two years.  

• Farmworkers — Farmworkers face a daunting series of threats related to COVID-19, according to a number of farmworker organizations. These include lack of access to health care and the closing of borders and suspension of new applicants for the H2 agricultural worker program, viewed as essential for the produce industry. Many farmworkers are not eligible for unemployment benefits, and while disaster and trade-related aid has gone to farmers, it has not gone to farmworkers who are also directly affected.  

Prior to the COVID-19 outbreak, the USDA took the unprecedented step of providing $26 billion in so-called trade aid to farmers through the Commodity Credit Corporation (CCC). The Farm Bureau and National Cattlemen Beef Association called for Congress to expand the CCC’s credit limit from $30 billion to $50 billion in the COVID-19 stimulus package. The Trump administration’s use of the CCC to provide aid has been highly controversial. A portion of the aid has also ended up going to global agribusiness firms like JBS instead of farmers. A disproportionate amount of the aid has favored only certain crops (virtually none for fruits and vegetables, those selling into domestic markets and farmworkers), while sending the bulk of the aid to the largest farms. 

Initial reports are that the Senate would replenish the CCC’s coffers by $14 billion and provide an additional $9.5 billion specifically for producers of livestock, dairy and those focused on produce and local markets. If ultimately passed by the House, Agriculture Secretary Sonny Perdue would set the rules on how that money would be allocated. While this is a good first step, based on Perdue’s past administration of trade aid through the CCC, there are concerns that once again the bulk of the dollars allocated will go to the largest producers. Perdue notoriously told a group of struggling dairy farmers that “In America, the big get bigger and the small go out.” 

Family farm groups and IATP have been pushing for a different approach to aid including measures that help farmers manage debt (including a two-year moratorium on farm foreclosures), increasing access to credit and creating a distinct program targeting aid to farmers selling into local markets. Increasing access to food aid programs for all of those in need and ensuring unemployment benefits for food system workers are also priorities. Rural-focused groups have also highlighted the need for deeper rural-focused investments in healthcare, housing, schools, workers and small businesses.  

It’s critical that COVID-19 aid gets to all farmers and food workers that most need it. A slush fund type bailout for global corporations and Wall Street won’t cut it.