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USDA implements Coronavirus Food Assistance Program

Apr 20, 2020

On Friday, April 17, 2020, U.S. Secretary of Agriculture Sonny Perdue announced a new program to assist farmers, ranchers and other Americans in need: the Coronavirus Food Assistance Program (CFAP).

This program has been funded with $19 billion to provide immediate relief and critical support for farmers and ranchers. In addition, it will provide food to foodbanks for distribution to the needy and will help to maintain the integrity of the food supply chain.

How the program directly benefits farmers and ranchers

CFAP provides $16 billion in direct support for producers who suffered losses through drops in market pricing and pressure on the supply chain. It also provides assistance for producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19.

This program also partners the USDA with regional and local distributors, whose workforce has been impacted by the effects of COVID-19 by the closure of restaurants, hotels and other food service entities, to purchase $3 billion in fresh produce, dairy and meat. Distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy and meat products to food banks, community and faith-based organizations, and other nonprofits serving Americans in need.

More provisions for the program

In addition to this immediate targeted effort, the USDA has other resources available for funding the purchase of food for Americans in need:

  • Up to $873.3 million is available through Section 32 funding.
  • The FFCRA and CARES Act also provided at least $850 million for food bank administrative costs and USDA food purchases, of which a minimum of $600 million is designated for food purchases. The use of these funds will be determined by food bank need and product availability.

The USDA will release further details at a later date regarding eligibility and rates. For additional information, please visit the USDA website.

Wipfli can help

If you need help calculating the impact of the 2020 market losses and your additional marketing costs, contact your Wipfli relationship executive or a member of the ag practice team.

Additional information related to COVID-19

Wipfli has created a COVID-19 resource center to help businesses and individuals weather the crisis and emerge strong. New insights are added daily, so we encourage you to check it often. In addition, you can find recent blogs here:

How the COVID-19 coronavirus is impacting the ag industry

COVID-19’s impact on agricultural prices and cash flow

Author(s)

Cook_Brad
Bradley Cook, CPA
Agribusiness Practice Leader
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