U.S. Agricultural Aid in Response to COVID-19

Introduction COVID-19 was first confirmed in the United States in mid-January 2020. In addition to the catastrophic health crisis it created, the COVID-19 pandemic has contributed to substantial economic upheaval across the U.S. economy, including the agricultural sector. This In Focus summarizes the major COVID-19-related agricultural programs, the types of support they provide (Table 2), and their implementation period, funding levels, outlays to date, and underlying authorities (Table 3). Relevant CRS reports on COVID-19-related programs for agriculture and other areas, such as for nutrition assistance programs, are identified in Table 1. Impact of COVID-19 on U.S. Agriculture The COVID-19 pandemic reduced domestic economic activity and disrupted domestic and international supply chains for goods and services, including food and agricultural products. Initial supply chain disruptions resulted in declines in producer prices of many agricultural commodities between January and July 2020. In addition, COVID-19-related shutdowns resulted in unexpected higher marketing costs of unsold agricultural products. The shutdowns’ impacts were most severe for perishable commodities, such as fruits, vegetables, and milk, as well as for some market-ready livestock that could not be timely processed (see Table 1, R46347). Congressional and USDA Responses to COVID-19 In response to agricultural supply chain disruptions, Congress appropriated funds that the U.S. Department of Agriculture (USDA) used to provide direct payments to affected U.S. agricultural producers (Table 2 and Table 3). USDA also used the general authority under the Commodity Credit Corporation (CCC) Charter Act (P.L. 80-806; 15 U.S.C. §§714 et seq.) to provide additional funding. Programs funded included the Coronavirus Food Assistance Program (CFAP-1, CFAP-2, and CFAP-AA) (see Table 1, R46395 and R46645), plus a new USDA Pandemic Assistance for Producers (USDA-PAP) program that includes new funding and a follow-up effort to use unspent CFAP dollars. Congress also appropriated funds for USDA’s nutrition and food purchase and distribution programs, including the Farmers to Families Food Box program (F2F Food Box) (see Table 1, R46432 and R46681), and for USDA loan forgiveness to socially disadvantaged producers. Additionally, Congress appropriated funds for the Small Business Administration (SBA) to create the Paycheck Protection Program (PPP) to provide forgivable loans and an emergency Economic Injury Disaster Loan (EIDL) program to provide grants to small businesses, including agricultural businesses (Table 1, IN11357 and R46284). Table 1. CRS Reports on COVID-19-Related Agricultural Support Programs USDA Programs CRS In Focus IF11491, Supplemental Appropriations for Agriculture and Related Agencies Due to COVID-19 CRS Report R46347, COVID-19, U.S. Agriculture, and USDA’s Coronavirus Food Assistance Program (CFAP) CRS Report R46395, USDA’s Coronavirus Food Assistance Program: Round One (CFAP-1) CRS Report R46645, USDA’s Coronavirus Food Assistance Program: Round Two (CFAP-2) CRS Report R46432, Food Banks and Other Emergency Feeding Organizations: Federal Aid and the Response to COVID-19 CRS Report R46681, USDA Nutrition Assistance Programs: Response to the COVID-19 Pandemic SBA Loans and Grants CRS Insight IN11357, COVID-19-Related Loan Assistance for Agricultural Enterprises CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options Source: CRS. SBA = Small Business Administration. Notes: For all other CRS reports on COVID-19 and related issues, see https://www.crs.gov/resources/coronavirus-disease-2019. Table 2. COVID-19-Related Agricultural Support Programs: Implementing Agency and Type of Support Program Implementing Agency Support Provided CFAP-1 USDA-FSA Direct Payments CFAP-2 USDA-FSA Direct Payments CFAP-AA USDA-FSA Direct Payments USDA-PAP USDA-FSA Direct Payments and Grants PPP SBA Forgivable Loans EIDL SBA Grants and Loans F2F Food Box USDA-AMS Commodity Purchases Source: Compiled by CRS. See Table 3 for program details. Notes: CFAP = Coronavirus Food Assistance Program; PPP = Paycheck Protection Program; EIDL = Economic Injury Disaster Loan; F2F = Farmers to Families; FSA = Farm Service Agency; AMS = Agricultural Marketing Service; PAP = Pandemic Assistance for Producers; SBA = Small Business Administration. Table 3. COVID-19-Related Agricultural Support Programs: Sign-up Period, Funding, and Authorities Name Coverage Period Announced Funding Outlays Source USDA Programs CFAP-1a May 26, 2020, to Sept. 11, 2020 $16.0B $10.6B (A) CARES Act, CCC CFAP-2b Sept. 21, 2020, to Dec. 11, 2020 $14.0B $13.6B (A) CARES Act, CCC CFAP-AAc Subsumed under USDA-PAP [$3.1B] $2.3B (P) Unspent CFAP-1 and CFAP-2 USDA-PAPd Varies by targeted programs $14.7B $6.5B (P) CAA 2021, Unspent CFAP, CCC F2F Food Box 1-4e May 15, 2020, to Dec. 31, 2020 $4.5B $4.5B (A) FFCRA, CARES Act F2F Food Box 5f Dec. 21, 2020, to Apr. 30, 2021 $1.5B $1.5B (P) CAA 2021 ARPA Packageg TBD $4.0B $4.0B (P) ARPA 2021 Subtotal $57.8B $43.0B SBA Programs PPP-1h Feb. 15, 2020, to June 30, 2020 — $7.3B (agr.) CARES Act PPP-2i Jan. 11, 2021, to Mar. 31, 2021 — TBD CAA 2021 EIDLj Jan. 31, 2020, to Dec. 31, 2020 — TBD CARES Act Source: Compiled by CRS from the Families First Coronavirus Response Act (FFCRA; P.L. 116-127); Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136); Commodity Credit Corporation (CCC) Charter Act (P.L. 80-806; 15 U.S.C. §§714 et seq.); Consolidated Appropriations Act, 2021 (CAA 2021; P.L. 116-260); and American Rescue Plan Act of 2021 (ARPA 2021; P.L. 117-2). Notes: (A) = Actual outlays as of 5/16/2021; (P) = projected. TBD = to be determined; B = billion; M = million; F2F = Farmers to Families. Totals under the “Announced Funding” do not add since CFAP-AA funds are from unspent CFAP-1 and CFAP-2. First round of the Coronavirus Food Assistance Program (CFAP-1) was funded with $9.5B of emergency spending authorized by the CARES Act and $6.5B of borrowing authority available to USDA under the CCC Charter Act (see Table 1, R46395). CAA 2021, §799C(b), allocated $1B of unspent CARES Act funds to additional disaster relief under WHIP+ (FY2019 Supplemental; P.L. 116-20). Second round of CFAP (CFAP-2) was funded with $13.9B of CCC borrowing authority supplemented by up to $100M from CFAP-1 CARES Act funds for tobacco producers (Table 1, R46645). CCC appropriations were made possible by a $14B early CCC reimbursement authorized in the CARES Act. CFAP additional assistance (CFAP-AA) for producers of swine, poultry, and other livestock and commodities was announced by USDA on January 15, 2021, as a rule (86 Federal Register 4877). CFAP-AA is to be funded with unspent CFAP funds estimated by USDA (CFAP-AA Cost Benefit Analysis, January 11, 2021) at $3.1B, with estimated net outlays of $2.3B after payment limits. USDA Pandemic Assistance for Producers (USDA-PAP) subsumes the CFAP and CAA programs, including $3.5B of unspent CFAP funds after CFAP-AA outlays and $11.2B of unallocated funds from the CAA 2021 (P.L. 116-260, Division N). CFAP-PAP targets a more diverse set of producers—including renewable fuel producers, specialty crop and organic farmers, timber harvesters, and support for the food chain—via four parts: parts 1 and 2—$6.5B for new COVID-19-response and other USDA programs; part 3—additional payments mandated by formula under CFAP1, CFAP2, and CFAP-AA; and part 4—reopening CFAP-2 sign-up for underserved producers, including socially disadvantaged communities, small and medium sized producers, and producers of less traditional crops, with $2.5M for outreach efforts. USDA initiated the Farmer to Families (F2F) Food Box program using authority of FFCRA (P.L. 116-127, §1101(g)), which authorized the Secretary of Agriculture to “purchase commodities for emergency distribution in any area of the United States during a public health emergency designation” during FY2020. USDA used $4B to fund the first three rounds of program activity. USDA funded a fourth round with $0.5B in unspent CFAP funds from the CARES Act (Table 1; R46395, R46432, and R46681). The F2F Food Box program was extended to a fifth round with funding of $1.5B (from within the $11.2B) by the CAA 2021. A package of relief authorized by ARPA 2021, which includes appropriations of “such sums as may be necessary” for payments to certain socially disadvantaged farmers and ranchers for the purpose of debt relief (P.L. 117-2, §1005). CBO estimated this provision at $4B (CBO, Estimated Budgetary Effects of H.R. 1319, American Rescue Plan Act of 2021, March 10, 2021). Paycheck Protection Program round one (PPP-1), authorized by CARES Act (P.L. 116-136, §1102), provided $349B for SBA’s Section 7(a) lending programs—of this amount, $7.3B in loans went to agricultural businesses. USDA estimates $5.9B was converted to grants. Initial funding was enhanced in subsequent supplemental appropriations acts (Table 1, IN11357 and R46284). Appropriations of $284B for a second round of PPP loans (PPP-2) to qualifying businesses under CAA 2021 (P.L. 116-260; Division N, Title III); portion of new funding for agriculture is TBD—there was no specific carve-out for agriculture. Emergency Economic Injury Disaster Loan (EIDL) program, authorized by CARES Act (P.L. 116-136, §1110), provided $10B in grants for small businesses and nonprofits (i.e., fewer than 500 employees) (Table 1, IN11357 and R46284). Program data are not yet available to determine the share provided to agricultural businesses.