Farmers who were facing a steep drop in government payments in 2021 will instead see a third round of coronavirus relief payments, while other producers and ag processors left out of previous aid programs this year will get help this time, under a massive stimulus package and government funding bill.
The 5,593-page bill includes $900 billion in coronavirus relief, plus $1.4 trillion in fiscal 2021 funding for the government.
And there’s even more: Wrapped into the year-end legislation are extensions of tax incentives for biofuels and renewable biofuels, new benefits for rural health providers, and a two-year water resources authorization bill that could accelerate reconstruction of waterway projects.
The House and then the Senate easily passed the bill Monday night, sending it to President Donald Trump for his signature.
Here is a look at the legislation’s provisions.
COVID aid to farmers. The bill provides farmers what is essentially a third round of payments under the Coronavirus Food Assistance Program. Row crop farmers will receive new payments worth $20 an acre. Eligible crops include those that qualified for CFAP-2 on either the price-trigger or flat-rate basis. Payments to corn growers will likely total $1.8 billion and nearly $1.7 billion to soybean producers, according to an analysis by the American Farm Bureau Federation. Wheat growers will share another $886 million.
Cattle producers will receive supplemental payments under a separate formula. USDA has paid farmers more than $23 billion through the first two CFAP rounds. Those payments will amount to about $63 a head for fed cattle and $25.50 for feeder cattle, the Farm Bureau estimates.
There also is a pot of money that USDA can use to make payments to producers who were affected by payment limits in previous CFAP rounds.
Livestock and poultry farmers who had to depopulate herds or flocks because of processing disruptions will be compensated based on 80 percent of the animals' fair market value. The payments won't cover costs already compensated under the Environmental Quality Incentives Program.
The bill provides $1 billion to make payments to contract poultry and livestock producers to cover 80% of their revenue losses due to processing disruptions. Contract producers weren’t eligible for previous CFAP payments if they don’t own their animals.
In calculating assistance to farmers the bill directs USDA to take into account differences in commodity prices in cases where crops are certified organic are of specialized varieties, or sold into local markets.
The package also earmarks $100 million to the Specialty Crop Block Grant program, which funds state assistance to fruit, vegetable and nut producers, and another $100 million to the Local Agriculture Market Program, which assists producers selling into local markets. The required applicant match under LAMP will be cut to 10% during the pandemic, and that can be an in-kind contribution.
Aid to ag markets, workers. Domestic users of U.S. cotton will get a payment based on their average monthly consumption ahead of the pandemic-generated disruptions in the apparel market. USDA also will be allowed to make payments to producers of ethanol and other biofuels.
The bill includes provisions based on Sen. Debbie Stabenow’s Food Supply Protection Act. Some $1.5 billion is earmarked for several purposes, including purchasing and distributing food and agricultural products such as seafood, to individuals in need, including through delivery to nonprofit organizations that can receive, store, and distribute food items. Small or midsized food processors or distributors, seafood processing facilities and processing vessels, farmers markets and producers could get grants and loans to respond to the pandemic, including measures to protect workers against COVID-19.
Biofuel assistance. The bill authorizes USDA to make COVID-relief payments to biofuel producers hurt by the sharp drop in travel.
The bill also extends through 2021 the $1.01-per-gallon tax credit for cellulosic biofuels and the $30,000-per-location tax credit for alternative refueling infrastructure, including ethanol blender pumps.
Dairy industry support. The bill includes $400 million for a new Dairy Donation Program that will reimburse companies for the processing costs of donated products as well as the cost of the milk. Processors must submit donation plans for USDA approval, but companies can get retroactive reimbursement for projects that they’re already implemented. USDA also is authorized make recourse loans to dairy product processors, packagers, or merchandisers.
Small and medium-sized dairy producers will be eligible to sign up for supplemental payments under the 2018 farm bill’s Dairy Margin Coverage program based on the difference between a farm's 2019 actual production and DMC production history.
Meat processing. The bill provides $60 million in grants to small-scale meat processors to help them qualify for federal inspection and begin to sell their product across state lines. The legislation also requires a report on the availability of financing for new processing capacity.
The legislation also will extend regulations for mandatory livestock price reporting through Sept. 30, giving Congress more time to agree on a longer-term reauthorization.
Paycheck Protection Program. Farmers and other small businesses will be allowed to deduct the expenses covered by PPP loans. The Internal Revenue Service has taken the position that the expenses couldn’t be deducted on tax returns. The legislation also sets a specific loan calculation for farmers and ranchers who operate as a sole proprietor, independent contractor, or self-employed individual and report income and expenses on Schedule F. Farms also can use their Schedule F gross income for 2019, and lenders may recalculate farmers' PPP loans if it would result in a larger loan.
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Rural broadband. The bill includes $635 million in FY21 funding for USDA ReConnect program, which provides grants and loans for broadband expansion. That is an increase of $80 million over FY20. The bill’s COVID provisions provide another $7 billion to expand broadband access, including $300 million for rural broadband and $250 million for teleheatlh. The bill authorizes a new emergency broadband benefit to help students, families and unemployed workers afford high-speed internet service during the pandemic.
The Federal Communications Commission, National Telecommunications and Information Administration and USDA will be required to enter into an interagency agreement to coordinate distribution of funding for broadband programs.
The legislation also provides $65 million to improve the FCC's broadband availability maps under provisions of the Broadband Deployment Accuracy and Technological Availability (DATA) Act, enacted earlier this year.
Rural health care. Health care provisions included in the massive bill are intended to help rural providers. Rural hospitals with fewer than 50 beds could be designated as a “rural emergency hospital.” They will be eligible to be reimbursed under all applicable Medicare prospective payment systems and will be eligible for a monthly facility payment and an add-on payment for hospital outpatient services.
The bill also provides for additional Medicare-funded resident doctors in rural hospitals.
Environmental regulation and cleanup. The bill provides $9.24 billion for EPA, a 29% increase from the administration’s budget request, which was the fourth in a row to attempt to slash EPA’s budget despite bipartisan opposition. Among the areas where money was funded in excess of the administration’s request was for regional programs.
The bill provides $330 million to the Great Lakes Restoration Initiative and $87.5 million to the Chesapeake Bay Program, $80 million above the president’s request. Of that amount, $19.25 million is for nutrient and sediment removal grants and small watershed grants to control polluted runoff from urban, suburban and agricultural lands. Another $7.25 million is for “state-based implementation” in the most affected basins in the bay watershed, where the states have committed to nutrient reduction goals.
Nutrition assistance. The bill provides a 15% increase in Supplemental Nutrition Assistance Program benefits for six months and exclude jobless benefits from counting as income when determining SNAP eligibility and benefits.
Another $400 million is earmarked for the Emergency Food Assistance Program, known as TEFAP, which funds the distribution of commodities through food banks.
International food aid. The bill provides USDA with record funding for food aid programs that the Trump administration proposed repeatedly to kill. Some $1.7 billion is provided for Food for Peace grants and $230 million for the McGovern-Dole international school feeding program.
Steve Davies contributed to this report.
