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Inside Washington

House's scaled-back COVID aid still includes ag priorities

sborisov/iStock/Thinkstock US capitol building in Washington DC against bright blue sky
RURAL MENTAL HEALTH FUNDING: Legislation honors Sgt. Ketchum, who lost his own battle with PTSD after not getting the care he needed when he returned home.
Detailed look at what the latest $2.2 trillion entails for livestock, dairy and ethanol industries.

House Democrats approved on a party-line vote late Thursday a scaled-down version of the COVID-19 relief package initially introduced in May, reducing the price tag from more than $3 trillion to $2.2 trillion but including an increase in the Supplemental Nutrition Assistance Program and farm aid provisions. The Senate has been reluctant to approve that level of support, because its July package and another one weeks later were substantially smaller.

Ahead of the vote, House speaker Nancy Pelosi (D., Cal.) said Democrats were still trading proposals with the White House. Not all Democrats supported the House package, including Agriculture Committee chairman Collin Peterson (D., Minn.) and other farm-state Democrats who are in narrow re-election races and joined Republicans in voting against the revised Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which passed 214-207. The bill includes provisions targeting help to certain farm sectors and expanding food assistance.

The House Agriculture Committee outlined agricultural provisions included in the updated HEROES Act that offered a detailed look at funding and legislative riders in the bill.

The bill provides payments for livestock and poultry that are depopulated due to processing plant shutdowns and back-ups because of the COVID-19 health emergency. Payments may not exceed the average market value of the market-ready livestock or poultry on the date of depopulation. Packer-owned animals are not eligible for coverage. The bill also amends the Commodity Credit Corp. (CCC) Charter Act to add authority for the secretary of agriculture to deal with removal and disposal of livestock and poultry due to supply chain interruption during a public health emergency.

The bill amends the CCC Charter Act to require congressional notification before disbursement of CCC funding. It clarifies the CCC reporting requirements to Congress. Democratic legislators especially have been critical of the U.S. Department of Agriculture’s handling of the CCC authorization and distribution of funds under the latest COVID-aid passed in March, as well as this Administration’s distribution of the Market Facilitation Program payments for trade mitigation.

The bill provides $1.25 billion to assist contract poultry growers and livestock growers who face revenue losses due to reduced placements related to COVID-19.

The bill also provides $300 million to support improved animal health surveillance and laboratory capacity in this public health emergency.

“We are similarly pleased by the inclusion of several measures that would protect food chain workers, food businesses and food security. For one, the bill allocates $120 billion to assist the restaurant industry, which has been especially hard hit. It also would strengthen safety standards for slaughterhouses, poultry processing plants and agricultural workplaces, where there is a higher risk of contracting COVID-19,” National Farmers Union president Rob Larew said.

Larew added that an important addition is the Requiring Assistance to Meat Processors for Upgrading Plants (RAMP-UP) Act, "which will help small- and midsized meat processing plants cover the cost of federal inspection. Farmers and ranchers have long experienced a severe shortage of meat processing facilities – and it has only gotten worse during the pandemic, when several large plants shut down or slowed production. By expanding alternative processing options, this important provision would establish greater resilience in our meat supply chain.”

The bill includes funding for multiple National Association of State Departments of Agriculture (NASDA) priorities, including $350 million for the Agricultural Quarantine Inspection Program and $20 million for the Farm & Ranch Stress Assistance Network. NASDA continues to press Congress to provide funding specifically for state agriculture departments' response to COVID-19, the organization said.

Dairy support

Dairy producers also could get an extra boost under the House plan. The bill provides $500 million to pay for milk to be processed into dairy products and donated to nonprofit entities (food banks, feeding programs, etc.). Under the framework of the program, the dairy processor and the nonprofit develop a plan for donation and distribution, that plan is reviewed by USDA and then USDA pays for the milk associated with the donated products at the current appropriate class value. The bill allows USDA to adjust the existing Milk Donation Program payments to match the level of payment provided by this new emergency program.

The bill supports also supports the Dairy Margin Coverage (DMC) as an effective risk management tool, reducing the cost of DMC premiums for operations that commit to participating in the program for 2021-23 by providing a payment worth 15% of annual premium costs. The bill provides necessary cash flow assistance to small- and midsized dairies that have grown over the last seven years by establishing supplemental margin coverage based on the difference between 2019 actual production and DMC production history.

The bill also provides $500 million for USDA to carry out a recourse loan program for dairy processors, packagers and merchandisers.

International Dairy Foods Assn. president and chief executive officer Dr. Michael Dykes said the group "applauds House Democratic leaders for introducing a new COVID-19 relief bill that delivers critical financial support for the dairy industry, including authorization for a dairy recourse loan program for processors, packagers and merchandisers of all dairy products that was added thanks to the leadership of chairman Collin Peterson and Congressman Jim Costa. We encourage Congress and the Administration to come together and enact a COVID-19 relief bill that includes the dairy recourse loan program as well as targeted payroll and income tax relief for essential workers who have been working to keep the nation’s food supply safe and available during the pandemic.”

Ethanol assistance

The House once again prioritized assistance for the renewable fuels industry as part of its economic relief package. If it were to become law, the Renewable Fuel Reimbursement Program provision would provide a 45 cents/gal. payment for qualified fuel produced by eligible producers from Jan. 1 through May 1, 2020.

“The Renewable Fuel Reimbursement Program included in the original HEROES Act, and now part of the new legislation, represents a potential lifeline for the 350,000 men and women whose jobs depend on a healthy and vibrant ethanol industry,” Renewable Fuels Assn. president and CEO Geoff Cooper said. “We greatly appreciate the efforts and leadership of all those in the House who understand that rural communities across the nation depend on the renewable fuels industry for job creation, economic vitality and new market opportunities for farmers.”

Cooper added, “Just recently, a study by university economists found that ethanol producers will experience roughly $8 billion in losses this year due to the pandemic’s impact on world fuel markets. While market conditions have improved since the spring, the ethanol industry is still struggling to fully recover from the pandemic, and ethanol producers across the country remain under financial stress.”

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