RAFI-USA COVID-19 Policy Response Recommendations

RAFI-USA continues to monitor the evolving impacts of the coronavirus pandemic on farmers and farmworkers. The policy recommendations below are in response to what we have heard so far. This document will grow and change as the situation changes and as we continue to hear from those who keep us fed. If you work in agriculture and have feedback on the policy recommendations below or want to share how Coronavirus is impacting your farm business, please get in touch with us at [email protected], and thank you!

Last Updated: April 28, 2020

The COVID-19 pandemic has created unprecedented challenges for agriculture and the food industry. We believe that sustainable agriculture can be critical to the restoration of our nation’s physical and financial health. We also believe that this moment could mean only greater challenges for mid-scale family farms – many of whom were already struggling before – and an exacerbated concentration of farmland and other property across the country.

We are pleased to see the recently passed CARES Act beginning to address some of the threats to our food and agriculture system. This legislation includes $9.5 billion in direct aid to help specialty crop, livestock, and locally-marketing farmers overcome challenges caused by the pandemic; as well as a $14 billion boost to the Commodity Credit Corporation. Our primary concern following the passage of the bill is to ensure that the aid gets to the farmers who need it most. The bill contains almost no language directing USDA how funds should be distributed, and we do not want to see a repeat of the way the Market Facilitation Program was implemented, in which the largest 10% of the farmers received more than half the payments, and small farmers and farmers of color were left out.

Farmers and organizations are still trying to understand the immediate and long-term impacts of this viral outbreak. Even amid this uncertainty, there are clear opportunities for federal response that will alleviate the struggles of farmers, farmworkers, and consumers. The following includes RAFI-USA’s recommendations for federal and North Carolina policy responses including declaring an agricultural disaster, adjustments to the credit system, emergency payments, expanding SNAP markets, and support for farm labor.

Declare an Agricultural Disaster

We urge the Secretary of Agriculture, Sonny Perdue, to immediately declare an agricultural disaster across the country under the Discretionary Exemption (CFR 7 759.5 (3)(d)) authorizing the use of disaster assistance programs such as the Disaster Set-aside and Emergency Loans. As is true in Emergency Loans, allow USDA loan programs to value collateral, including production, as it would have been before the start of the crisis.

We also urge the USDA Farm Services Agency to suspend all foreclosures, evictions and actions such as Notices of Intent to Accelerate for all direct and guaranteed loan recipients, as has been done by the Rural Development Single Family Housing Direct Loan and Grant Program.

Credit

USDA must act quickly to facilitate loan and other program administration that maintains the agricultural credit and safety net upon which farmers rely. This could include increased temporary staffing, increased online administration of programs and document transfer with appropriate privacy protections. It is critical that, as USDA increases reliance on technology that allows program administration through online and virtual technologies, USDA continues to prioritize service to clients with limited or no access to online technology.

This rapidly changing situation catches farmers as they begin the 2020 planting season. As of March 12, in FY 2020, USDA had made less than half of the direct and guaranteed operating loans made in FY 2019. We have grave concerns that USDA programs, especially operating loans, be administered as quickly as possible while protecting the health and safety of both staff and clients. The viability of farms and the food supply rely on timely financing as never before. 

We are also concerned that USDA staff may have diminished capacity to work with farmers who have more time intensive applications either because of financial difficulties or unusual program requests. USDA must expand funding to ensure sufficient numbers of skilled professionals are available to provide farmers with technical assistance.

The most rapid way to ease the financial pressure on those farmers who are most at risk is forgiveness of USDA direct loan debt. We support efforts to forgive up to $250,000 in direct USDA debt per farmer, in particular as detailed in the Relief for America’s Small Farmers Act from Senator Gillibrand’s office.

The challenges of the current situation will last into the coming years, and USDA must take swift action to keep farmers on their land and in their homes. We recommend the following changes to USDA credit programs.

• Adjust USDA Direct Loan interest rates to 0, and use the Interest Assist program (7 CFR 762.150) to buy down the interest rate on guaranteed loans to 0.
• Broaden the opportunity for farmers to refinance existing debt with USDA direct loans. (7 CFR 764.252)
• Restore the farm loan program eligibility of farmers who have caused a loss to the agency for any direct or guaranteed loan, including debt write-downs, bankruptcy or farmers who have lost eligibility due to term limits. (7 CFR 764.252). This change was made in the 2018 Farm Bill in regards to Emergency Loans, but should be extended to all USDA loans.

Emergency Payments for Farmers

In recent years, USDA has provided massive payments to farmers suffering revenue losses due to the loss of foreign markets. These payments have kept thousands of farmers on their land. Now we are seeing farmers who sell into direct or other high-value domestic markets facing the same devastating revenue losses due to local market disruptions. 

We applaud the inclusion of $9.5 billion of emergency funding in the CARES Act for specialty crop, livestock, and producers selling into local and regional markets in the CARES Act.  We urge USDA to make sure this funding quickly gets to the family farmers and local and regional producers whose survival may depend on it. And in that process, the USDA should take into account the different sales channels and price points for those farm businesses, since the business model of a farmer selling into a direct market or to an institution is very different from a farmer selling into commodities markets.  

Emergency funds are a crucial stopgap measure to keep farmers on the land and feeding us all; but given the scope and duration of this crisis, farmers will also need a long-term recovery program.  Our recommendations for such a program are as follows:

Farmers selling into local, regional, or high-value markets have often been difficult for USDA to serve because they frequently have highly diverse production, market channels and price points. The farmers facing devastating losses in this crisis are those who are often least likely to have historically participated in USDA commodity or disaster programs, and are therefore the least likely to have revenue histories on file with USDA.

Devastating losses could include farmers who:

• Sell direct to consumer or direct to restaurant markets that have been closed or severely reduced due to social distancing restrictions,
• Provide meat or produce for regional distribution into value-added markets impacted by social distancing,
• Provide agro-tourism opportunities for consumers, including school tours, farm stays, farm events and others,
• Sell to institutions such as schools, universities or businesses that have now been shut down, or
• Raise poultry or other livestock on contract and have had less frequent placement, lower placement densities, or extended layout times from their contracting integrator companies

Current disaster programming provides benefits based on production losses. This is inappropriate in addressing the current situation. With funding from Congress, USDA must initiate payments to farmers based on lost revenue rather than production losses, as well as provide incentives that allow farmers to maintain production even as markets are restored, in order to maintain the nation’s agricultural economy and its supply of fresh, healthy food.

Our most effective program at addressing risk to farm revenue through varying-price markets is Whole Farm Revenue Protection crop insurance (WFRP).

We therefore recommend the creation of an emergency disaster program that provides benefits for revenue losses as determined by the parameters established by WFRP crop insurance. We also acknowledge that the creation of such a program would place additional burden on USDA staff and require commensurate increases in staffing.

The program would have the following attributes:

• Farmers apply using WFRP documentation to establish revenue history and 2020 potential revenue based on prices as they were on January 1.
• Farmers maintain production in line with the potential revenue plan unless that production is documented to be not feasible (i.e. if the market value of the product is less than the cost of production and harvest).
• Existing crop insurance or NAP benefits would be nested into the program as is true with WFRP.
• Farmers complete a mid-season preliminary revenue loss report which includes losses to date and estimates of their annual losses, corresponding with the crop insurance production report. Farmers receive compensation for ½ of the estimated annual revenue losses. If there is sufficient documentation, the preliminary report could be filled out with the application.
• At the end of the production season and following the filing of taxes, the farmer fills out a final revenue loss report and the remainder of losses are compensated.

We acknowledge that this program would require extensive administration by USDA staff at a time when USDA offices are understaffed and are following social distancing guidelines. We therefore recommend the following adaptations to WFRP to streamline the process.

• Eliminate the requirement for the reporting of expenses.
• Allow for a “miscellaneous crops” category that includes less than 10% of total revenue.
• Allow production documentation required under certification programs to serve as program documentation, including the Organic Systems Plan.

Keep SNAP Shoppers Connected with Local Farmers

In the past, the transition of SNAP benefits from food stamps to EBT was devastating to direct market participation in the program. As USDA extends SNAP benefit use to online food purchases, and as more consumers move to online grocery purchases, USDA must prioritize the participation of local and direct markets in the program and not allow this transition to provide a market-distorting advantage to large-scale retailers. 

USDA should accelerate the 2014 Farm Bill pilot program to conduct and evaluate online SNAP purchasing. This program should be expanded nationwide and allow other e-commerce platforms to accept EBT payments. These e-commerce platforms must then be accessible to farmers and farmers market retailers with SNAP retailer status.

Support Farmworker & Food Processing Worker Health & Safety

While the majority of these recommendations are concerned specifically with farmers, we are also extremely concerned about the health and welfare of farmworkers and food processing workers. While the designation may be recent, farmworkers and food processing workers have of course always been essential workers, and should be supported as such. In this pandemic, many experience working, transportation, or housing conditions that put them at particular risk for infection. We support the initiatives of our partners who work directly with farmworkers and food processing workers. Many kinds of support are needed:

• Help farmers protect farmworker health by providing resources for additional transportation costs (to enable social distancing on the way to/from work and to get farmworkers to medical care), and by offering a forgivable loan program for the construction of additional housing to enable social distancing and quarantine housing as needed.
• Increase funding to local health services and health departments which provide services to farmworkers and food processing workers.
• Ensure food processing workers and farmworkers receive paid sick leave – without the threat of losing their job. This must apply to both permanent and temporary workers. 
• Provide all farmworkers and food processing workers with sufficient PPE and opportunities for social distancing as well as education on workplace safety and health standards in their primary language.
• Offer premium pay to farmworkers and food processing workers that more adequately compensates those who continue to work in risky conditions in order to maintain a secure food supply for the nation. Offer family farmers who employ farmworkers additional funding to provide support for this premium pay.

RAFI-USA COVID-19 North Carolina Response Recommendations

• We echo the state’s affirmation that farmers markets are essential services just as grocery stores are and, when implementing appropriate measures for social distancing, should stay open.
• We encourage the state to document agricultural losses based on revenue losses (rather than crop losses), and for the governor to request a USDA Secretarial disaster declaration on that basis.
• Given the uncertainty of all farmers in need being able to access federal emergency/disaster funds as well as the uncertainty of federal funding timelines, we encourage the state to use rainy day funds to implement a Disaster Loss Program similar to the one proposed above
  • Emergency payments to be based on documentation of revenue (like a Schedule F), for farms who don’t have crop reports on file with FSA. This would make those funds available to a wider range of farmers (such as agritourism farms, diversified produce farms, etc) who are experiencing disastrous market disruption.
  • An NC Disaster Loss Program would first take into account any payments the farmer has received from federal disaster or coronavirus programs.
  • For ease of administration and in order to implement the program quickly, the initial payment could be a flat payment to any farmer applying, with the difference to be made up at the end of the season – OR – Farmers complete a preliminary revenue loss report which includes losses to date and estimates of their annual losses prior to July 15. Farmers receive compensation for ½ of the estimated annual revenue losses.
  • At the end of the production season and following the filing of taxes, the farmer fills out a final revenue loss report and the remainder of losses are compensated.
• We recommend that the state allocate additional resources to support farmworker and food processing worker health and help farmers comply with DHHS recommendations, by:
  • Providing growers with forgivable loans to construct new housing in order to comply with social distancing guidelines and to house workers who test positive for COVID-19 who need to quarantine
  • Providing growers with a central resource hub that includes all recommendations and guidance from Department of Labor, the Department of Health and Human Services, the Department of Agriculture & Consumer Services, and other relevant agencies
  • Increasing funding for health services provided by local health departments and other health providers
  • Providing resources for expenses related to additional transportation, both to and from work to maintain social distancing, and so that workers have a way to get to the doctor without exposing others
  • Providing financial assistance to ensure that all farmworkers and food processing workers, regardless of legal status, are provided with paid sick leave and unemployment insurance
  • Ensure food processing workers and farmworkers receive paid sick leave and unemployment insurance – without the threat of losing their job. This must apply to both permanent and temporary workers.  The state must also provide support to workers without legal status who are not eligible for unemployment insurance
  • Provide all farmworkers and food processing workers with sufficient PPE and opportunities for social distancing as well as timely education on workplace safety and health standards in their primary language.