House, Senate differ on next round of COVID-19 aid

Take a deeper look at some agricultural provisions that ended up in $3 trillion House Democrat relief package.

Jacqui Fatka, Policy editor

May 14, 2020

5 Min Read

Ever since the passage of the $2 trillion Coronavirus, Aid, Relief & Economic Security (CARES) Act in March, many have looked for the next round of aid. The livestock and ethanol industries did see some of what they wanted in the $3 trillion package House Democrats released on Tuesday. However, there does not appear to be support in the Republican-controlled Senate to take up the bill.

While speaking on the Senate floor on May 14, Senate majority leader Mitch McConnell (R., Ky.) said, “This is a totally unserious effort. Even the mainstream media says, quote, ‘Neither this bill nor anything resembling it will ever become law. It’s a Democratic wish list.’

McConnell noted that the bill calls for “tax hikes on small business, giveaways to blue-state millionaires, government checks for illegal immigrants and sending diversity detectives to inspect the pot industry.”

He added, “What you’ve seen in the House … is not something designed to deal with reality but designed to deal with aspirations. This is not a time for aspirational legislation; this is a time for practical response to the coronavirus pandemic.”

McConnell said the Senate is going to insist on focusing only on narrowly targeted legislation. “If and when we do legislate again, and we may well, that addresses the problems, the needs and not the aspirations of the Democratic majority in the House,” he said in a press conference following release of the bill on May 12.

House majority leader Steny Hoyer (D., Md.) confirmed that the House will meet at 9 a.m. May 15 to consider the relief package. Votes will continue late into the evening due to safety precautions. House speaker Nancy Pelosi (D., Cal.) and other top Democrats will also push through a House rules change that will allow proxy voting and remote hearings. Meanwhile, senators are back in Washington, D.C., conducting hearings and taking health and safety precautions. 

Although it may be dead on arrival, there is a possibly that some of the agricultural provisions included in the House Democrats’ Health & Economic Recovery Omnibus Emergency Solutions (HEROES) Act could find their way into whatever future relief efforts emerge from Congress.

Such provisions include $16.5 billion for direct payments to agricultural producers, $100 million in Specialty Crop Block Grants to states to address supply chain issues and authorization for the U.S. Department of Agriculture to provide 45 cents/gal. of ethanol produced from Jan. 1 through May 1, 2020.

CCC replenishment left out

The House package specifically amends the Commodity Credit Corp. (CCC) Charter Act to give the secretary of agriculture the authority to deal with removal and disposal of livestock and poultry due to supply chain interruption during a public health emergency as well as the authority to provide assistance to agricultural processing plants in the event of a public health emergency in order to assure the continuation of markets for agricultural commodities. It also amends the CCC Charter Act to require that Congress be notified before any disbursement of CCC funding.

What is not in the CCC provisions is a proposal pushed by the American Farm Bureau Federation and some Republican lawmakers to significantly raise CCC borrowing authority from $30 billion to $68 billion.

Livestock provisions

The bill expanded direct payments to livestock farmers who have suffered severe losses as COVID-19-related market disruptions have caused the value of their livestock to plummet. It also offers a formula for 85% of the value of losses, as determined by the secretary of agriculture, to pay producers who have had to euthanize animals and excludes packer-owned animals.

A total of $300 million would be allocated to support improved animal health surveillance and laboratories, some of which are performing COVID­-19 tests in this public health emergency.

Another provision ensures that livestock producers are paid for their animals by requiring dealer trusts, for the benefit of all unpaid cash sellers of livestock. A dealer statutory trust would improve recovery when a producer or livestock auction market is not paid for livestock sold to a dealer.

Livestock Marketing Assn. (LMA) president Tom Frey said, “The volatile down market in cattle prices due to COVID-19 has increased the urgency of the establishment of a dealer statutory trust. The whole livestock sector is hurting, and unfortunately, this will lead to livestock payment defaults.”

LMA noted in a release that even in times of great disagreement, Congress and the cattle industry agree the dealer statutory trust is a no-cost, bipartisan solution that provides needed certainty to livestock sellers in troubling times. The dealer trust was introduced in the bipartisan Securing All Livestock Equitably (SALE) Act in both the House and Senate (H.R. 6067 / S. 3419) and is supported by a USDA feasibility study. In addition to LMA, the dealer trust is supported by the National Cattlemen’s Beef Assn., United States Cattlemen’s Assn., R-CALF USA, American Farm Bureau Federation, National Farmers Union and American Sheep Industry Assn.

Dairy provisions

The HEROES Act would provide supplemental margin coverage to small and midsize dairies based on the difference between the farms’ 2019 production and their production history under the Dairy Margin Coverage (DMC) program. The bill would encourage dairy farms to commit to participating in DMC for 2021-23 by providing a payment worth 15% of annual premium costs. 

It would also authorize a program for donating dairy products to feeding programs. Milk used for donated products would be reimbursed at fluid milk prices. In addition, it would authorize a recourse loan program for dairy processors, packagers, marketers, wholesalers and distributors. 

Ethanol help

The HEROES Act would authorize USDA to provide $45 cents/gal. of ethanol produced from Jan. 1 through May 1, 2020. Producers forced off line for one or more calendar months during this time would qualify for the same credit, based on half the volume produced during the corresponding month or months in 2019.

The aid reflects appeals submitted by farm and biofuel leaders as well as calls from bipartisan champions in the House and SenateMidwest governors and 70 mayors across 10 states.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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