Agriculture Secretary Tom Vilsack on Friday announced $2.7 billion in total funding from USDA's Commodity Credit Corp. account to build domestic fertilizer capacity, support school meal providers and fund emergency commodity purchases by states.
Vilsack is pulling an additional $400 million from the CCC to fund domestic fertilizer expansion projects, to go with $500 million announced last year for the initiative.
The first round of funding focused on immediate assistance with 21 potential viable projects identified earlier this year. On Friday, the department announced $30 million in grants to seven of those projects to benefit farmers in Florida, Iowa, Louisiana, Minnesota, Montana, Texas and Wisconsin. Some projects will build or expand new dry fertilizer production.
Vilsack told reporters USDA has received 350 applications during the last several months for nearly $3 billion to help with longer-term projects. The agency is now seeking 66 of those proposals that are potentially worthy to take to the next level. Comments are due by July 22.
Vilsack said the "these 66 worthy projects" showed that the additional CCC funding would be needed.
“We see the benefit of this investment will provide over time a much more resilient supply chain, lower costs for farmers, rural job growth as part of this administration's effort to encourage manufacturing processing in rural places," he said.
USDA will provide nearly $1 billion through The Emergency Food Assistance Program – TEFAP – for states to order commodities from USDA to provide to food banks or community kitchens. This is in addition to $1 billion previously provided in September 2022.
Vilsack said food banks and community kitchens have seen increased demand, in large part because of the ending of the emergency allotments, which provided nearly $3 billion of additional benefits, in the Supplemental Nutrition Assistance Program. These food assistance entities also have been affected by supply chain disruptions and high food costs.
USDA is providing nearly $1.3 billion to purchase domestic foods to be distributed to schools. Since December 2021, USDA has provided nearly $3.8 billion to help schools manage higher food and labor costs.
School meal programs benefited from higher reimbursement rates during the pandemic that have also now been lowered, Vilsack said. Program directors "are expressing concerns about how they’re going to meet the needs of millions of children who will start school later this summer,” Vilsack said.
He said the funding is likely to eventually benefit local and regional producers of those products. “The reality is wherever food is purchased, it ultimately results in some increased opportunity for the farmers who are producing whether it’s fruits and vegetables or other commodities,” Vilsack said.
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Vilsack defended his latest use of the CCC funds. The House Appropriations Committee recently advanced a fiscal 2024 Agriculture spending bill that would restrict his ability to manage CCC funds as he sees fit. The CCC was created to “stabilize, support and protect farm income and prices” but CCC use came under fire in recent years with Vilsack’s decision to use $3 billion to fund the climate-smart partnerships that provide farmers and partnering companies with assistance to implement climate smart practices.
“We don’t want to do what previous administrations have done which is to overcommit, then requiring Congress to refill the CCC, as was done in the Trump administration,” Vilsack said.
The Trump administration “essentially drained the entire CCC account, which then compromised or put in jeopardy the ability of the Department of Agriculture to meet its farm bill mandated requirements," Vilsack said. “We’re not doing that. We will not do that. We haven’t done that. And we won’t do it.”
Vilsack said what he is doing is “proper utilization of the CCC,” and “there’s universal engagement among groups for the work that we’re doing with the CCC."
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