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1/ I've received countless calls from cattle producers concerned about headlines they've read over the past few days w/ regard to COVID relief payments & the Biden Administration. Here's a thread of facts to help counter the ever-present speculative opinion.
2/ We know that CFAP 1 & 2 were provided funding through the CARES Act & the CCC. The "Additional Assistance" payments, announced on Jan. 15, were to come from remaining CFAP 1 & 2 funds. Those payments are frozen for the time being.
3/ The "Additional Assistance" payments were directed to swine & poultry contract growers, as well as a few other commodities. Cattle payments were NOT included as part of this announcement from USDA. Source: https://farmers.gov/cfap
4/ In Dec., Congress passed the Consolidated Approps Act of 2021. This was signed into law by the former POTUS. The bill reimbursed the CCC for net realized losses. This is standard. By law, the CCC receives annual approps = to the amt of the previous year's net realized losses.
5/ The CCC has a permanent indefinite borrowing authority of $30B from the U.S. Treasury.
6/ USDA can use administrative discretion to authorize CCC funding for various operations that are authorized by Congress, such as: disaster payments, financial & technical assist. for EQIP, CRP, etc., commodity & income support, export assist., & more.
7/ In 2020, USDA created CFAP 1 & 2 in response to disruptions caused by the COVID pandemic.
CFAP 1 - $19B ($16B direct payments, $3B commodity purchases)
CFAP 2 - $14B (direct payments)
CFAP 1 - $19B ($16B direct payments, $3B commodity purchases)
CFAP 2 - $14B (direct payments)
8/ USDA's use of discretionary authority btwn FY18 - FY20 has brought the CCC close to its borrowing authority limit of $30B. Source: CRS, https://fas.org/sgp/crs/misc/R44606.pdf
9/ Today, the Senate Ag Committee met w/ Tom Vilsack, nominee for Secretary of Agriculture. A question was asked by Sen. Hoeven (R-ND) related to the CCC & its use for "some type of carbon program." Source: https://www.c-span.org/video/?508411-1/agriculture-secretary-nominee-tom-vilsack-confirmation-hearing&live&vod&start=3606
10/ Mr. Vilsack responded by stating the first responsibility of the CCC is to ensure that farm bill programs are adequately funded. He then indicated that the CCC could be utilized to inform future farm bills & encourage better agriculture practices.
11/ Mr. Vilsack then proceeds to say, "I would hope that you all would provide me the opportunity to utilize that in a way that, again, doesn't compromise farm bill programs, but advances & creates additional markets." You all = Congress
12/ This is an important distinction to note, as Congress can alter USDA's discretionary use by amending the CCC Charter Act.
13/ I'm providing these facts to prevent heartburn for producers. Don't read between the lines too much. Don't take every word written in an article as fact, or "this will happen." There's a lot of "this could happen" w/ a new Administration. This is par for the course.
14/ Now, here's my hot take: Eliminating COVID relief for producers would be a PR nightmare for a new Administration & Secretary of Ag. Mr. Vilsack knows how he got to where he is, & a lot of that had to do w/ his experiences right here in Iowa.
15/ If confirmed, he's going to lean on relationships he's built over decades w/ agencies, elected officials, & commodity groups. He knows those same entities will hold his feet to the fire to ensure that producers recover from the economic losses caused by the COVID pandemic.
16/ That being said, expect change. USDA could very well use CCC $ in the future to support soil health, conservation programs, & maybe even a carbon bank. However, getting buy-in from farmers is going to be paramount to achieving any measurable success.
If you made it through the entire thread, congrats. I’ll end this by saying there are people way smarter than me that know way more than I do. Make of that what you will.
