Legislative Update: New developments in COVID-19 relief programs
By Amanda Bilek, senior public policy director for the Minnesota Corn Growers Association
Since Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act, there have been a number of aid program announcements and developments that are important to corn farmers. This week’s update goes over the latest on three CARES Act-related programs.
Business & Industry CARES Act Program
In the CARES act, USDA Rural Development was appropriated up to $1 billion in loan guarantees to help rural small businesses meet their working capital needs during the Coronavirus pandemic. USDA Rural Development has operated an existing Business & Industry (B&I) loan guarantee program, and the B&I CARES Act program is able to assist farmers in production agriculture.
Farmers are eligible for the Rural Development B&I Program if the loan guarantee request exceeds financing that could be secured through a Farm Service Agency (FSA) loan—$1.75 million—or if the request is otherwise ineligible for FSA financing. For a farm operation looking for another option to access working capital, you can learn more about the USDA Rural Development B&I CARES Act program here.
Paycheck Protection Program
In May, Congress approved and President Trump signed into law, the Paycheck Protection Program (PPP) Flexibility Act. This legislation makes several tweaks to the PPP, which was first authorized in April, to make the program more workable for a variety of small businesses.
The changes increase the covered period of the loan from eight to 24 weeks, eliminates the restriction on non-payroll expenses to 25 percent of loan proceeds, and the two-year loan term ensures full access to payroll tax deferment for recipients of PPP loans and provides a safe harbor provisions for companies that are unable to rehire employees due to the enhanced unemployment insurance.
According to analysis released by the Small Business Administration at the end of May on the PPP, 4,475,599 loans had been approved for a total of $510 billion in loans. Of that total, Agriculture, Forestry, Fishing and Hunting accounts for 127,465 of approved loans representing $7.6 billion in total loan amounts, which represent 1.5 percent of the total loan volume for the program.
Coronavirus Food Assistance Program
On May 28, USDA opened up sign-up for the Coronavirus Food Assistance Program (CFAP) and farmers can sign up, by appointment, at their local FSA office through August 28. USDA has been releasing weekly data on program sign-ups.
As of June 8, a total of $1.4 billion direct payments have been made, with approximately 48 percent of total payments to livestock producers. In Minnesota, there have been a total of 6,051 applications in the non-specialty crop category, which includes corn, for a total of approximately $28 million in payments. Also in Minnesota, there have been 2,731 applications in the livestock category for a total of approximately $27 million in payments. Dairy is a separate category from livestock.
If you are looking for additional information on CFAP, please use any of the links below.
- Payment calculator – download from USDA CFAP webpage under “CFAP Application”
- CFAP website
- Non-specialty crop program details
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