August 26, 2020

Following Alarming Reports Of Small Farmers Being Disadvantaged By Farm Relief Program, Gillibrand Demands USDA Answer For Inequitable Distribution Of Benefits And Urges Agency To Provide Direct Relief For New York’s Small Farmers

Recent NBC Report Uncovered Striking Disparities In Payouts To Farms: Corporate Agribusinesses And Larger-scale Foreign-owned Farms Received Millions Of Dollars Through CFAP, While Nearly 7,000 Small Farms Nationwide Received Less Than $200, And Nearly 200 Received Less Than $20; Gillibrand To Renew Call For Relief For America’s Small Farmers Act To Provide Crucial Support For Small Farmers Suffering From Limited Operations Due To The COVID-19 Pandemic

Following an alarming NBC report detailing striking disparities in the distribution of Coronavirus Food Assistance Program (CFAP) benefits, U.S. Senator Kirsten Gillibrand, member of the Senate Agriculture Committee, is demanding that the U.S. Department of Agriculture (USDA) answer for the inequitable distribution of CFAP benefits and is urging USDA Secretary Perdue to provide direct relief for New York’s small farmers, who have been financially devastated by the COVID-19 pandemic. The CFAP program was created in response to the massive losses that farmers faced at the beginning of the pandemic and was designed to create a lifeline of direct payments to farmers of all sizes. However, the report uncovered that not only have corporate agribusinesses been favored in the distribution of benefits, but large-scale foreign-owned farms have received millions of dollars in relief through CFAP. Meanwhile, small farmers — including specialty crop growers across New York State — have not received nearly enough funding to cover their losses. 

“The disparities in federal farm relief are unfair to our small farmers who are facing insurmountable debt and are struggling to stay afloat due to the pandemic — I am calling on Secretary Perdue to immediately address the unacceptable disparity in relief between our small farmers and corporate agribusinesses and foreign-owned farms,” said Senator Gillibrand. “Furthermore, the CARES Act and CFAP simply did not go far enough to sustain small farms through this difficult time; they need urgent and direct loan forgiveness to continue maintaining operations, paying their workers, and keeping Americans fed. Including legislation like the Relief for Small Farmers Act in the next coronavirus relief package is absolutely crucial to standing up for the family farmers who put food on our tables and keep rural economies strong.”

New York is home to one of the most diverse agricultural industries in the country and is largely composed of small and medium-sized family operations. However, even before the coronavirus outbreak, farmers across New York and the country faced economic hardship caused by tight margins, growing debt, natural disasters, and an unstable trade market. Over the years, farm bankruptcies have continued to rise, with many small farms just one natural disaster or bad farm season away from bankruptcy. The financial struggles of more than 30,000 New York farmers have been exacerbated by the coronavirus crisis and many will be unable to sustain their operations without federal relief. Unfortunately, family farms received minimal benefits through SBA under the CARES Act and have struggled to access and receive funding through CFAP emergency federal farm aid. 

In a letter to Secretary Perdue, Gillibrand is calling on the USDA to address gaps in CFAP that have left small farmers in crisis. Specifically, Gillibrand is urging USDA to make the program more equitable for small farmers and ranchers, collect data on farm size and demographics for CFAP applications, and set aside at least 50% of all assistance funds specifically for small and mid-scale operations, with payment amounts calculated the same for all producers, based on revenue losses. 

Additionally, to address the shortcomings of CFAP, Gillibrand is renewing her call to include the Relief For America’s Small Farmers Act in the next coronavirus relief package. With no end of the pandemic in sight and continued disruption of the nation’s food supply chain, the legislation would help put farms back on the path to economic stability, while ensuring that relief is provided directly to the farmers that need it most. The Relief for America’s Small Farmers Act would directly address this crisis by providing a one-time debt forgiveness of up to $250,000, across three types of USDA FSA loans. All small farms with an average adjusted gross income of up to $300,000 for the previous five years will be eligible. Additionally, while many debt relief programs exclude farmers from future benefits, the legislation would ensure that farmers who receive debt forgiveness or write-downs maintain their eligibility for further USDA Direct and Guaranteed loans. The Relief for America’s Small Farmers Act will help get farmers back on their feet by providing a one year window to apply for debt relief and will keep them farming for at least two years after receiving loan forgiveness. 

Full text of the  Relief For America’s Small Farmers Act can be found here

Full text of the letter to Secretary Perdue can be found here and below. 

 

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August 26, 2020

 

The Honorable Sonny Perdue 

Secretary of Agriculture

U.S. Department of Agriculture 

1280 Maryland Avenue S.W. 

Washington, D.C. 20250

 

Dear Secretary Perdue,

I write today to express my deep concern about the unequitable distribution of direct payments to farmers under the Coronavirus Food Assistance Program (CFAP). There have been recent reports detailing the fact that many farms have not received adequate relief under the Program. In a NBC report titled “Small farmers left behind in Trump administration's COVID-19 relief package”, it was found through a Freedom of Information Act (FOIA) request, “almost 7,000 farms got less than $200, and nearly 200 got less than $20. The lowest payout was 7 cents.”[1] This disparity among relief is not only unacceptable, but unfair to our small farmers who are also facing devastating losses due to coronavirus. Many small farmers are facing economic devastation as markets shuttered and they were left with millions of pounds of crops rotting in their fields. The low payouts from CFAP, coupled with having to apply crop by crop, have put a significant strain on small farmers when trying to benefit from the Program. 

Future CFAP payments need to be more equitable for smaller and historically underserved producers to more accurately address their market losses. One way to do this would be to set aside at least 50 percent of all assistance funds specifically for small and mid-scale operations, with payment amounts calculated the same for all producers, based on revenue losses. While I certainly appreciate the intention of CFAP, and understand that not everyone can be made whole in regards to their losses due to the pandemic, the relief that we can provide to farmers can be more equitable and accessible.

Corporate agribusinesses have consistently reaped the largest share of benefits from USDA’s agricultural relief efforts in recent years compared to smaller farms, even though 91 percent of farms in the United States are classified as “small” by USDA.[2] For example, data compiled by the American Enterprise Institute revealed that the top 20 percent of farms, as measured by crop sales, received 73 percent of all Market Facilitation Program payments in 2018 and 69 percent in 2019.[3] Another separate, but equally alarming fact that was released as part of the NBC FOIA request, is that larger-scale foreign-owned farms have received millions of dollars through CFAP.1 Federal relief money, particularly in time of crisis, should prioritize American family farmers, our rural communities, and our local food systems, not foreign corporations.

Due to the documented struggles of CFAP in providing adequate relief to small producers, I request responses to the following: 

  • Is USDA considering options to retool CFAP to make it more equitable for small farmer’s ranchers and local system producers? If so, what are those options?
  • Is USDA collecting data on the farm size and demographics of farmer applications and USDA approvals and denials for CFAP? If so, does USDA plan on releasing an aggregation of that data?
  • Explain why USDA has not established set asides for small and mid-size operations and historically underserved producers with money allocated for CFAP.
  • Publish details on the allocation of payments by farm size and commodity in order to be transparent with taxpayers about who is being helped by this program, and who is not.
  • Explain if USDA will continue to allow foreign-owned corporations to benefit from CFAP.
  • Provide information on the number of farm foreclosures and loan defaults on loans under USDA’s jurisdiction since March 1, 2020, and how much debt is held by small-scale and historically underserved producers under USDA’s jurisdiction.

With no end in sight for coronavirus, and given the results of how CFAP has been implemented so far, immediate action is needed to not only save small farms and homes, but the rural way of life. According to a 2019 USDA National Agricultural Statistics Service report, America lost 5,800 farms from 2018-2019.[4] This decrease in farms has been happening for decades, and the coronavirus has potentially only exacerbated that problem. We must do everything we can to ensure that our current, and next generation of farmers are able to stay in business both during and after this pandemic.

In this time of national crisis we must support the agricultural industry nationwide rather than just the corporate agribusinesses that dominate this sector. Small farms are essential to the economic health of both the citizens and economy at large of the United States as they provide jobs, food, and economic support to their local communities. While thousands of new, beginning, and small-scale farmers are struggling to keep their farms afloat, it is our duty to give them the support they deserve. We must not forget them as we attempt to relieve the economic burden this pandemic has caused. Thank you for your consideration and I look forward to your response.

Sincerely,