Legislative Update: Key relief offered to ag in COVID-19 bill
By Amanda Bilek, senior public policy director for the Minnesota Corn Growers Association
After months of closed door negotiations, traded offers, partisan gridlock and communication breakdowns Congress passed a $900 million COVID-19 relief package and funding for federal government operations for the 2021 fiscal year. There are several provisions included in the spending and aid package of interest to corn farmers, here are a few key highlights.
Agriculture Support
A total of $13 billion to address COVID-related impacts on farmers, ranchers, growers and fisheries. Included is a specific $20 per acre Coronavirus Food Assistance Program (CFAP) plus up for all price triggered and flat rate crops. Corn is a price triggered commodity under the program.
Language was added to the bill that allows USDA to make payments to biofuel facilities who have experienced economic loses during the COVID-19 pandemic, but no amount of payment calculation was specifically included. In the annual appropriations section of the package, two biofuels industry tax credits received short-term extensions; the Second Generation Biofuel Production Tax Credit and the Alternative Vehicle Refueling Property Credit.
There was also relief support for livestock producers. The USDA Secretary is directed to make payments to livestock producers for losses included due to the depopulation of livestock and poultry due to lack of processing capacity. Relief will be provided equal to 80 percent of fair market value plus cost of depopulation offset by any federal or state program payment. Payments to contract growers of livestock and poultry is capped at $1 billion and will not cover more than 80 percent of revenue losses. Additionally, the package provides $20 million for animal disease prevention and response capacity.
For other agricultural specific assistance provisions that might be of interest, you can reference this summary put together by the U.S. House Agriculture Committee.
Business, Rural Community and Other Key Provisions
Other items were included that have benefit for a broad spectrum of businesses, including the agriculture-related business and rural communities of interest to corn farmers include:
- Paycheck Protection Program – $284.5 billion to reopen the program for first time and second time borrowers. Maximum loan amounts are limited to $2 million and there is preference given for businesses with less than 300 employees that experience a 25 percent loss in revenue and includes a specific calculation for farm business. Additional detail is available here.
- Economic Injury Disaster Loan – authorize $20 billion to reopen and extend the program. If a business that previously applied but received a loan of less than $10,000, the business can reply to receive the maximum loan amount.
- Water Resources Development Act – includes a cost-sharing change in the construction account from 50 percent general revenue/50 percent inland waterway trust fund to a 65/35 split through 2031. After 2031, the cost-share change reverts back to 50/50 but any projects that start within the 10-year timeframe finish with the 65/35 cost-share. This was a priority for MCGA and the National Corn Growers Association.
- Broadband – the COVID-19 relief portion of the bill includes $7 billion in broadband funding, including $300 million to build out rural broadband and $250 million for telehealth. Annual agricultural appropriations included $730 million for broadband expansion of which $635 million for ReConnect Program and $35 million for Community Connect Grant Program.
Details on all these different funding programs and other provisions included in the bill are likely to emerge after the first of the year. We will be sure to keep you updated on major developments.
Be sure to follow the MCGA blog and its social channels (Facebook, Twitter) for updates. You can also follow me on Twitter (@AjBilek).
