Direct Payments By Commodity Under CARES
Economic Tidbits

CARES Agricultural Assistance

The CARES Act directed $9.5 billion to the USDA for assistance to agricultural producers and replenished to coffers of the Commodity Credit Corporation with $14 billion.

On April 17, the USDA released details of an assistance package under the Act for agriculture which includes $16 billion in direct payments to farmers and ranchers and $3 billion in food product purchases for distribution. American Farm Bureau Economists, Michael Nepveux and John Newton, in a recent Market Intel, reported, “Of the $16 billion provided for direct payments to producers, it’s been reported that $9.6 billion is directed toward the livestock industry, e.g., cattle, dairy and hogs; $3.9 billion is for producers of row crops, such as cotton; $2.1 billion is for specialty crop producers; and $500 million is for other crops.”

Nepveux and Newton also wrote, “The payments will be coupled to actual production and based on actual losses agricultural producers experienced in response to price declines and supply chain disruptions, i.e., sales of commodities impacted by COVID-19. To qualify for a payment, a commodity must have declined in price by at least 5% between January and April.” The USDA hopes to distribute the payments yet this month. Payment limits apply, $125,000 per commodity and an overall limit of $250,000 per individual or entity. However, the limits under this program are separate from the limits under other farm programs.

Figure 2. Direct Payments By Commodity Under CARES (Million $)

Direct Payments By Commodity Under CARES

Source: What’s in USDA’s New Coronavirus Food Assistance Program, AFBF Market Intel, Michael Nepveux and Dr. John Newton, April 23, 2020.

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