Bloomberg Government subscribers get the stories like this first. Act now and gain unlimited access to everything you need to know. Learn more.
Livestock ranchers and produce growers are fighting for survival as they compete with other industries for billions of dollars in relief in what could be the last massive economic stimulus package lawmakers move this year.
“This is the most intense effort we’ve ever been engaged in,” National Potato Council CEO Kam Quarles said. “We’ve dealt with disaster relief programs before, but the breadth and scope of this and the numbers that go along with it are eye-popping.”
The agriculture industry produces roughly $389 billion worth of commodities annually. Much of that is sold to commercial buyers such as restaurants, hotels, schools and amusement parks, which have largely shuttered during the coronavirus pandemic.
Legislators are debating the next round of aid, and the industry has requested billions of dollars in relief and additional government loan programs. It has also pushed to lift the borrowing cap for the Commodity Credit Corp., a government-run financial institution established during the Great Depression to support and protect farm income and prices, and to replenish its funding.
Producers have been unable to divert the supply chain, resulting in farmers dumping unsold milk and growers burying rotting vegetables in ditches. Hog farmers fear they’ll have to euthanize millions of pigs because there’s nowhere to market them.
“Without rapid government intervention, thousands of pork producers, the vast majority of which are family-run farming operations, will go out of business,” Rachel Gantz, a spokeswoman for the National Pork Producers Council, said in an email. The pork industry stands to lose $5 billion this year.
The $4 billion-per-year potato industry is sitting on $300 million in excess spuds. Its farmers, who are planting their 2020 crop now, have been told to either limit how much they plant or refrain entirely.
There are “non-stop conference calls and email chains” with an agriculture industry coalition to coordinate advocacy efforts, Quarles said. He’s spent some Sunday mornings chatting up congressional offices—weekend work he said is “reflective of how much people are committed to getting this thing right.”
Congress provided relief to producers in previous coronavirus stimulus packages, including allotting $19 billion to the Agriculture Department for direct payments to farmers and purchases of commodities. Industry leaders say it isn’t enough.
Robert Guenther, the senior vice president of public policy at the United Fresh Produce Association, said he’s working with USDA officials and lawmakers on Capitol Hill to make sure certain segments aren’t overlooked.
“Just giving payments to growers doesn’t work well for our industry. It’s not a one-size-fits-all,” he said. For example, farmers in states like Florida, whose growing seasons are finished, wouldn’t benefit. Guenther said he’s advocating for expanded loan guarantees and streamlining the government purchasing programs.
House Democrats unveiled a $3 trillion economic stimulus bill (H.R. 6800) on Tuesday. While President Donald Trump made clear Wednesday he doesn’t support it, the proposal sets up a fight with Republicans over key issues and provides a marker for the agriculture industry.
The industry provisions include $16.5 billion in direct payments to farmers and gives the USDA the go-ahead to compensate poultry and hog producers forced to cull their herds due to scarce demand—a major request from the pork industry that it hailed when the bill was released.
The dairy industry scored a prospective win by securing $500 million in recourse loans for dairy processors, distributors and others in the supply chain, for which it petitioned. The legislation also supplies $500 million for a Dairy Direct Donation program, which will reimburse the some of the costs of milk products that are donated to non-profits.
The industry has also successfully lobbied to ease the cap on how much farmers are able to receive in direct payments already allocated by Congress originally set at $125,000 per product or $250,000 per farmer, but the specifics haven’t been released yet. Many industry groups told Bloomberg Government that it’s difficult to know how much extra they’ll need in new legislation until the full details come out.
Meat producers are among the industries that are pressing for liability protections for businesses as the economy begins to re-open.
“There needs to be some assurance there that you’re not going to just be bombarded with lawsuits,” said Ethan Lane, vice president of government affairs at the National Cattlemen’s Beef Association, which is estimating more than $13 billion in losses for its industry this year. “We also want to make sure that this is done in a way that doesn’t reward bad actors.”
Although the issue is a main priority for Republicans, Democrats remain wary of extending such protections as states begin to reopen.
The United Food and Commercial Workers International Union, which represents employees at meat-packing plants, says at least 30 workers in those jobs have died from the coronavirus, and more than 10,000 others have either tested positive or been exposed to it.