Knowledge Exchange

Ag Provisions of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021

Nearly nine months have passed since the passage of the Coronavirus Aid Relief and Economic Security (CARES) Act by Congress in late March. 

As COVID-19 continues to impact the nation, Congress has been debating additional relief funding, and included about $900 billion in COVID-19 relief as part of an omnibus bill passed on December 21, 2020. The 5,593-page bill both funds general government operations for the next year as well as COVID-19 relief. Many tax-related provisions relevant to Northeast farm, fishing and forestry producers are detailed here. The following focuses on the major agriculture provisions of the bill. 

In the bill, $26 billion was set aside for USDA funding and $13 billion of which is designated for nutrition assistance. The remaining $13 billion is designated for agricultural assistance and other programs, including $300 million designated for fisheries assistance. 

Many of the details regarding how the funds will be dispersed have yet to be finalized. However, there are a few things we do know, as follows. 

Just over $11 billion is allocated to replenish funding for USDA programs including the Coronavirus Food Assistance Program (CFAP) for the 2020 crop year. This will likely take the form of a CFAP-3 program in 2021. While levels for certain crops, such as corn, soybeans and wheat, will be eligible to receive $20/acre, it is not known how a new round of dairy payments will be determined.  

For specialty crop producers, the bill modified the sales-based rules from CFAP 2 to allow specialty crop producers to include crop insurance indemnities and disaster payments in their 2019 sales, which was the basis for determining the amount of support under CFAP 2, or by substituting 2018 sales. This provision is seen as beneficial for apple producers.  

At least $1.5 billion of agricultural assistance funds will be used to purchase food and other agricultural products, including seafood, as well as making loans and grants available to small and midsized food processors or distributors, seafood processing facilities or vessels, farmers markets, and producers. These funds could be used to continue the Farmers to Food Box program, or in some other way. 

Additionally, up to $200 million will be used to support timber harvesting and hauling businesses impacted by COVID-19. 

The bill provides:

  • $100 million in additional funding to the Specialty Crop Block Grant Program.
  • $100 million in funding for the Local Agriculture Market Program, which supports local farmers, farmers markets and value-added production.
  • $75 million is set aside for the Farming Opportunities Training and Outreach Program to support groups providing beginning, socially disadvantaged and veteran farmers with financial and marketing assistance.
  • $75 million will go to the Gus Schumacher Nutrition Incentive Program, which helps improve the health and nutrition status of participating households by incentivizing the purchase of fruits and vegetables.

Dairy

The bill will provide assistance to small- and mid-sized dairy farms that have grown over the last seven years by establishing supplemental margin coverage based on the difference between their 2019 actual production and their Dairy Margin Coverage (DMC) production history, up to 5 million pounds annually. It will also provide $400 million to pay for milk to be processed into various dairy products for donation to non-profits.

It will provide $60 million to make facility upgrades and planning grants for existing meat and poultry processors to help them move to federal inspection and be able to sell their products across state lines, as well as improving the existing Cooperative Interstate Shipment Program.

$28 million will be distributed in block grants to state departments of agriculture to support farm stress relief programs.

The bill provides $3.9 billion for rural development programs, including water and wastewater improvements, electric and telephone infrastructure, and rural broadband internet.

Click here for a summary of the agriculture provisions from the House Agriculture Committee.

Or a summary from the American Farm Bureau Federation.