Congressional and White House negotiators are under pressure to expand the agricultural aid proposed by Senate Republicans and to restrict how the Agriculture Department can spend the money.
A key senator involved in crafting the GOP proposal that was released on Monday said it was written broadly to ensure USDA could cover a wide array of needs, including ethanol producers who saw their market collapse because of the pandemic. The GOP plan would provide USDA with $20 billion to go with $14 billion that the department still has available for coronavirus relief from a previous aid bill.
“At the end of the day we’re going to probably be meeting with (Agriculture Secretary Sonny Perdue) again and get some reassurances that those dollars are going to go to the places we want them to go,” said Arkansas Sen. John Boozman, who is in line to become the top Republican on the Senate Agriculture Committee next year.
Ethanol producers are among those wanting Congress to provide more direction to USDA on how to spend the money, and state departments of agriculture are continuing to seek to have money included in the package for grants that the agencies can distribute.
Lawmakers could be several weeks away from a deal with the White House over the bill, and there are differences even among Republicans over their own plan, potentially even on the relatively noncontroversial ag provisions. But the release of the plan allowed for the start of negotiations between congressional Democrats and the White House.
The GOP legislation has a single paragraph describing how the additional $20 billion would be spent. It says USDA can use the money to help producers and processors of specialty crops, non-specialty crops, dairy, livestock and poultry to “prevent, prepare for, and respond to coronavirus."
The paragraph goes on to mention two groups of producers that were left out of USDA's current coronavirus aid program that would be specifically eligible for a share of the $20 billion: producers of livestock and poultry that had to be "depopulated due to insufficient processing access and growers who produce livestock or poultry under a contract for another entity.”
Boozman, pictured above, told Agri-Pulse on Tuesday the Trump administration wanted broad discretion on how to distribute the money.
“The administration and some others didn’t want us to be too prescriptive. We wrote the language in such a way that we’re going to be able to take care of people that certainly have been adversely impacted in this very difficult time,” he said.
Boozman said that making agricultural processors eligible for a share of the $20 billion would ensure that payments could go to ethanol producers to compensate them for the steep decline in sales that resulted from the stay-at-home orders and a lingering slowdown in travel.
The broad language would also cover U.S. textile mills that have lost business because of the worldwide slowdown in apparel sales. The National Cotton Council appealed to lawmakers to help that sector survive the crisis.
But some in the biofuel industry and their allies in Congress are seeking assurances that USDA will make payments to the ethanol industry.
Democrats led by House Agriculture Committee Chairman Collin Peterson, D-Minn., have said that they will insist on restricting how USDA can spend the money.
And a senior GOP member of the Senate Agriculture Appropriations Subcommittee, Kansas Sen. Jerry Moran, told Agri-Pulse on Tuesday he’s concerned about the open-ended authority that USDA would have under the Republican plan.
“My preference would be that we provide more guidance, direction, to the Department of Agriculture, and not just a sum of money to be spent. I’m looking for allies to provide more specificity,” Moran said.
Boozman also said GOP leaders would be willing to consider an increase in Supplemental Nutrition Assistance Program benefits. He suggested that could be a trade-off for reducing the $600 bonus unemployment benefit, which is set to expire on Friday. Democrats and anti-hunger groups have been demanding that Congress temporarily increase SNAP benefits by 15%.
"We have a lot of people now that are in difficult situations, record numbers as far as our food banks,” Boozman said. The SNAP increase is “definitely something we have to look at.”
The SNAP increase also was included in the $3.5 trillion HEROES Act the Democratic-controlled House passed in May. The GOP-controlled Senate never acted on it.
Republicans say the $600 federal unemployment benefit makes it harder for businesses to get furloughed employees to return to work. An analysis by the Congressional Budget Office said that the $600 benefit would exceed the expected pay for five of every six recipients, if the aid is extended.
The additional $20 billion in agricultural assistance would go a long way toward meeting the requests from major farm groups for assistance, even though Republicans aren’t proposing to increase USDA’s broad spending authority under its Commodity Credit Corp. account. In an appeal earlier this month, several groups asked lawmakers to increase the limit, now $30 billion, to $50 billion in order to cover additional coronavirus assistance.
The Senate GOP plan would leave the CCC limit at $30 billion, while providing the $20 billion as a direct appropriation to supplement the $14 billion USDA now has in the CCC account for COVID-19 aid as a result of the last major relief bill, the CARES Act, which was enacted in March.
The GOP senators’ plan is to replenish the CCC account again this fall at the $30 billion limit.
John Newton, chief economist for the American Farm Bureau Federation, said the GOP plan would mean Congress would provide a total of $50 billion in pandemic relief to farmers: the $20 billion in the GOP plan, plus the $14 billion now sitting in the CCC account, plus the money the department is currently distributing in direct payments under the Coronavirus Food Assistance Program. USDA has set aside $16 billion for CFAP payments, although it’s not clear farmers will apply for all of that; so far, USDA has distributed about $6.55 billion.
“Including the $16 billion in CFAP support, USDA would have annual appropriations totaling $50 billion to provide much-needed financial relief to agricultural producers, growers and processors impacted by coronavirus — in line with Farm Bureau’s recent requests to Capitol Hill,” Newton wrote in an analysis of the GOP plan.
John Newton, AFBF
Ethanol producers said they would continue to seek assurances that plants will qualify for assistance under a new bill.
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Brian Jennings, CEO of the American Coalition for Ethanol, said USDA “has so far failed to use the authority to support our industry,” so his group continues to support including language ensuring that the industry would get direct assistance.
Sen. Joni Ernst, R-Iowa, confirmed to Agri-Pulse on Tuesday that she is seeking a meeting with President Donald Trump to address the industry’s concerns. “I am trying to get it done as soon as possible,” she said.
Meanwhile, a bipartisan group of lawmakers led by Sens. Tammy Baldwin, D-Wis., and Susan Collins, R-Maine, sent a letter to congressional leaders on Tuesday appealing for them to include funding that state ag agencies could use to tailor additional relief to farmers.
North Dakota Ag Commissioner Doug Goehring, who is president of the National Association of State Departments of Agriculture, said the money is needed so state agencies “can leverage local solutions for local recovery of the food and agriculture supply chain.”
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