Farmers won’t see coronavirus money until June as bankruptcies soar

Struggling farmers and ranchers, many of whom have seen their markets collapse as the pandemic upended supply chains, won’t see coronavirus relief money until June – about two months after Congress appropriated the funds.

The US Department of Agriculture said this week that farmers can begin applying for the money next Tuesday. Secretary Sonny Perdue said he expects the checks to be sent a week to 10 days after a farmer signs up.

Farmers who saw at least a 5% drop in price loss due to the pandemic will be eligible for payments worth up to $250,000.

As demand from restaurants and schools disappeared, farmers have already had to dump milk, euthanize hogs and destroy fresh produce as suppliers try to reconfigure the supply chain and get more food to grocery stores and food banks.

“This aid can’t arrive soon enough as many farmers file for bankruptcy, facing unprecedented losses,” said American Farm Bureau Federation President Zippy Duvall in a statement.

Rising bankruptcies

Farm bankruptcies are up 23% over the past year and are likely to keep rising because of the pandemic, according to the group.

Farmers were already suffering before the coronavirus outbreak. They became a specific target of President Donald Trump’s trade war with China, which has been ongoing for two years. The Trump administration gave $28 billion in direct payments to farmers hurt by China’s tariffs, but it didn’t make them whole.

New agricultural purchase commitments made by Beijing in February in a preliminary trade deal have mostly failed to come to fruition as the pandemic slowed global trade.

“After several difficult years of trade disputes, depressed prices, and extreme weather, the agricultural economy was finally starting to recover,” said National Farmers Union President Rob Larew in a statement sent to CNN.

But he added that now “it’s clear that this is going to be yet another bad year for family farmers and ranchers.”

The timing of the aid program launch is in line with what the Department of Agriculture said last month when it first announced that it would be sending direct payments worth $16 billion to farmers hurt by the pandemic. While Congress authorized most of the funds, the agency had to decide how the money should be allocated.

The USDA released details on how to apply and who is eligible on Tuesday. Since the current funding is limited, farmers will receive 80% of their payment upon submitting their application. The rest will be paid at a later date if funds remain available.

The package includes money for dairy farmers, some fruit, vegetable and nut growers, and farmers of crops like soybeans and corn, as well as cattle, hog and sheep ranchers.

But according to the National Farmers Union, it excludes poultry farmers and contract pork producers who raise hogs for other farmers. Meanwhile, both of those groups have struggled financially as production plants have shut down for safety reasons.

More money might be on the way

On Tuesday at a news conference at the White House, Perdue said these payments are not meant to directly help ranchers and farmers who have had to euthanize their animals. He said that separate money would be coming to address those issues at a later time.

Many in the industry are already saying that more money will be needed.

“The financial impact has already hit farm families and the forecast is dismal for June, July, and August with estimated milk prices hitting historic lows. It could well extend into the fall,” Vermont Secretary of Agriculture, Food, and Markets Anson Tebbetts said at a news conference with Gov. Phil Scott on Wednesday.

Last week, the USDA started spending $3 billion that Congress had authorized for purchasing surplus food and sending it to food banks across the country.

Known as the Farmers to Families Food Box Program, the USDA is partnering with private distributors who will buy a variety of food and package it into boxes that it will deliver to food banks. It will spend $100 million a month on fruits and vegetables, $100 million on dairy products and $100 million on meat products.