July 30, 2020

Gillibrand, Wyden, Booker, And Sanders Urge Senate Leadership To Prioritize Direct Relief For Small Farmers In Response To Ongoing Economic Crisis

Family Farms Have Received Minimal Small Business Relief Under The CARES Act And Struggle to Access Emergency Federal Farm Aid Allocated to USDA; The Relief for America’s Small Farmers Act Would Provide Critical Support For Small Farmers Suffering From Reduced Operations Due to the COVID-19 Pandemic

U.S. Senator Kirsten Gillibrand (D-NY), member of the Senate Agriculture Committee, and U.S. Senator Ron Wyden (D-OR), Ranking Member of the Finance Committee, U.S. Senator Cory Booker (D-NJ), and U.S. Senator Bernie Sanders (I-VT) are calling for direct relief for small farmers who have been hit hard by months of closed restaurants, schools, and farmers markets. In a letter sent to Senate leadership, the senators urged the Senate to include the Relief for America’s Small Farmers Act in the next coronavirus response package. The comprehensive legislation would provide economic relief for small farmers suffering from massive financial losses due to reduced demand and supply chain disruptions during the pandemic. Currently, farm bankruptcies are at an eight year high and family farmers are carrying historical high debt. The financial struggles of more than 30,000 New York farmers has only been exacerbated by the current crisis and many will be unable to sustain their operations without federal relief. The Relief for America’s Small Farmers Act will support the nation’s most vulnerable farmers by alleviating debt, keeping farms open, and fortifying the nation’s food supply. 

“The CARES Act does not go far enough to sustain small farms through this difficult time; they need urgent and direct loan forgiveness so they can continue maintaining operations, paying their workers, and keeping food on Americans’ tables,” said Senator Gillibrand“This legislation will not only strengthen family farms but also bolster rural economies that have been devastated by this crisis. We must pass this legislation now so that we can keep small farmers in their homes and on their land. I will continue working with my colleagues to include the Relief for America’s Small Farmers Act in an upcoming relief package to ensure our farmers are not left behind.” 

"Like other small businesses, family farmers in Oregon and nationwide are struggling to stay afloat during this challenging time. These small farms are the backbone of rural economies, supporting jobs that are desperately needed during this time of historically high unemployment," Senator Wyden said. "Congress must step up and do more to help family farms weather this storm and keep rural communities strong."

“Family farmers are the backbone of our rural economy, but many small farms were left out of recent relief funding,” said Senator Sanders. We need to ensure that any COVID-relief package going forward includes help for the small, diversified farmers who are feeding their local communities.”

Family farms received minimal benefits through the SBA under the CARES Act and have struggled to access emergency federal farm aid allocated to USDA in the same coronavirus response package. Additional measures are needed to support small farms and keep them operating throughout the coronavirus pandemic and beyond. 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: Direct Farm Operating, Direct Farm Ownership, and Emergency Loans. All small farms with an average adjusted gross income of up to $300,000 for the previous five years will be eligible, regardless of their commodities. 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.

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. Now, the coronavirus pandemic has become the bad season they feared, as closed schools, restaurants, farmers markets, have disrupted the nation’s food supply and devastated revenue streams for farmers in New York State. The Relief for America’s Small Farmer’s Act 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.

As a member of the Senate Agriculture Committee, Senator Gillibrand has prioritized support for farmers throughout the COVID-19 crisis. In addition to introducing the Relief for America’s Small Farmer’s Act, she has called on the administration to support dairy producers and provide assistance under the CARES Act for local food producers who have experienced losses due to the coronavirus outbreak. Gillibrand also introduced the Food Bank Access to Farm Fresh Produce Act which would support struggling farmers who lack buyers for their produce by giving food banks the power to purchase excess specialty crops directly from farmers. 

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

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Dear Leader McConnell, Leader Schumer, Chairman Hoeven, and Ranking Member Merkley,

As the United States continues to grapple with the economic and public health effects of COVID-19, our small farmers are feeling the brunt of the hardship as critical marketing channels like restaurants, schools, and farmers markets have been closed for months and may remain shuttered for the foreseeable future due to the pandemic. That is why we ask that you include the Relief for America’s Small Farmers Act in the next COVID-19 relief package.

Prior to the economic fallout of COVID-19, family farmers carried historically high levels of farm debt (more than $415 billion in 2019)[1] due to a variety factors outside of their control, including international trade disputes, frequent and intense natural disasters, and levels of market concentration that have depressed farm gate prices for producers and increased their costs of production. These trends contributed to the loss of more than 38,000 farms from 2016 to 2018 according to USDA [2], and left droves of other farms on the financial brink. COVID-19 has only exacerbated these challenging economic conditions. Without support, many farmers and ranchers across the country will not be able to sustain their livelihoods for much longer, with ripple effects that will further depress rural economies. A report released by the American FarmBureau Federation reports that “data released in March 2020 shows that farm bankruptcies in a 12 month period increased 23 percent compared to the 12 months prior.”[3] Although current circumstances are especially dire, there has been an upward trend of family farm bankruptcies for the past 5 years with a 46 percent increase in Chapter 12 filings from 2015-2019 [4]. And these numbers do not reflect farm foreclosures that have prematurely ended the farming careers of so many in our rural communities. Small-scale farmers are the foundation of our local food systems and rural economies, but they are facing a crisis and it is our duty to provide them with the support they require. I believe this support can be achieved through my legislation S.3602 the Relief for America’s Small Farmers Act.

The Relief for America’s Small Farmers Act is a comprehensive bill that would help alleviate crippling debt for our most vulnerable farmers. According to USDA’s Farm Service Agency (FSA), farmers across the country received more than $2.6 billion in Direct Farm Operating and Direct Farm Ownership Loans in FY19 alone. The Relief for America’s Small Farmers Act would provide a one-time debt forgiveness of up to $250,000 across three types of USDA FSA loans: Direct Farm Operating Loans, Direct Farm Ownership Loans, and Emergency Loans. Relief can be applied to shared loans and loans of any price tag, even those in default, and the legislation ensures that farmers who receive this debt forgiveness maintain their eligibility for further USDA Direct and Guaranteed loans. While farmers of all sizes are struggling, it is small- scale farmers who are operating on the thinnest margins that have been hit hardest by this epidemic. Farmers with an average adjusted gross income of $300,000 or less over the previous five years will be eligible for this debt relief. The bill further extends eligibility for debt relief to farmers who have had to sit out farm seasons over the previous five years. This legislation is not another yearly entitlement program, but a one-time debt forgiveness to help our farmers regain their footing in the middle of a global public health emergency. By easing the debt burden for eligible small-scale farmers, farm families can prioritize urgent household and business expenses, such as groceries, medical bills, and pressing farm operating costs during peak harvest season for many.

There is currently no other legislation that focuses specifically on debt forgiveness for small farmers. The recently passed CARES Act provided relief to small businesses in myriad ways including forgivable loans, but small farms have mostly been excluded and are just minimally benefitting from the Small Business Administration programs aimed to help keep affected industries afloat during this time of economic burden. The impact of the direct assistance provided through the Coronavirus Food Assistance Program on small farms is yet to be seen, but preliminary reporting [5] and USDA’s own CFAP data indicates that small-scale and diversified operations are not the primary beneficiaries of this federal support, which only addresses price loss during the first quarter of 2020. The Relief for America’s Small Farmers Act will provide the support our small farmers need during this time as they see their operations severely impacted by the COVID-19 pandemic.

The Relief for America’s Small Farmers Act is a critical tool for assisting small farms and rural communities in weathering this current economic crisis. With over 60 endorsements from various organizations across the agriculture sector, and throughout the United States, the Relief for America’s Small Farmers Act is seen as the way forward for our family farms. Farms across the United States are suffering and their relief should be a shared concern irrespective of region or party. This is a way to help farm families from across our country stay in business, in their homes, and on their land. We cannot afford to lose a single additional farm in rural America; the urgency of this moment cannot be stressed enough. 

Sincerely,