By, Patty Lovera, Policy Director

The response to the Covid-19 pandemic is essentially the only topic being discussed by elected officials and policymakers in Washington, DC. The response has a lot of moving parts, some more clear than others at this point.

At the end of March, Congress passed its third bill to respond to the pandemic, called the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). It includes an estimated $2 trillion in federal spending, spread among different programs including unemployment insurance, payments to individuals, industry specific assistance (like airlines), and several provisions that cover agriculture. Here is what we know at this point about how organic farmers will be affected.

US Department of Agriculture – Aid for Farmers

The CARES Act includes funding for several divisions of the USDA to maintain operations and cover extra expenses created by the disruption of the pandemic response, some limited increases for the Supplemental Nutrition Assistance Program (SNAP-formerly known as food stamps), and some increased funding for rural broadband and rural business loans.

The bill also provides almost $24 billion dollars to USDA, without very detailed instructions, to use to aid farmers affected by the pandemic. Some of that funding will be used to purchase food to distribute it to emergency feeding or other nutrition programs. The CARES Act also instructs USDA to provide aid to impacted farmers, including specialty crop producers, livestock producers (including dairy), and producers selling into local food systems.

The USDA has not yet released any plans for how they will distribute this aid or make food purchases. OFA has been working to let USDA and Congress know that organic producers need to be included in any response, including direct aid to producers or food purchases, and we are also urging the department to find other ways to help such as technical assistance for direct marketers to transition to online sales, speeding up organic certification cost share payments and helping ensure that farmers markets are declared essential services.

National Organic Program and Organic Inspections

We are waiting for more details from the National Organic Program and organic certifiers about what the public health response to Covid-19 means for organic inspections. Limitations on inspectors’ ability to visit farms are causing inspectors and certifiers to experiment with using phone calls or video in place of on-site visits, or may lead some certifiers to do records reviews first and delay farm visits until public health restrictions are lifted. We hope that the NOP will soon be releasing some uniform guidelines for how certifiers are supposed to handle inspections during this disruption, and will be working to get more information from the agency about how they are handling ongoing enforcement priorities like pasture rule compliance at high risk dairy operations.

Small Business Administration Loans

The CARES Act sets up two main programs for small businesses, administered by the Small Business Administration (SBA). Here is a flow chart from the House Small Business Committee that shows the difference between the two programs.

One program is Economic Injury Disaster Loans. This is a loan that has to be paid back, and as of April 9th, it is not open to farms. Many groups, including OFA, are working to try to refine the requirements for this program so that farms can apply and many members of Congress have called on the SBA to allow farms to access this program. A new bill from the Democratic minority in the Senate would change this program to allow farmers to access these loans.

The other SBA program is the Paycheck Protection Program. This starts out as a loan, but if businesses keep people on the payroll for 8 weeks and the money is used for payroll, rent, mortgage interest, or utilities, the loan can be forgiven (or partially forgiven based on how long people stay on the payroll). Farms can apply to this program.

Food-related businesses should be able to apply to either program (if they meet all the criteria).

Banks approved by the SBA (including some in the farm credit system) are supposed to start processing Paycheck Protection Program applications on Friday, April 3rd and demand for the program is expected to be extremely high.

If you are considering applying for this program, contact your bank as soon as possible. (Or you can find a qualified lender on the SBA website).

Useful Links:

• How to get a small business loan under the $349 billion aid bill (Washington Post)
• The Small Business Owner’s Guide to the CARES Act (Rep. Delgado)
• Paycheck Protection Program (Small Business Admin.)
• Small Business Administration Covid-19 Relief Options

There are also other programs that the SBA uses for disaster lending (like micro loans and bridge loans), sometimes in cooperation with the states. Getting in touch with a SBA regional office or a Small Business Development Center is also a good idea to see if there are other programs that might work for you.

WHAT’S NEXT?

At some point this spring, Congress will consider other spending bills in response to the pandemic. It still isn’t clear if the next package will more specifically dictate how departments, like the USDA, spend money or if it will just be a repeat of the broad strokes provided in the CARES Act.  We have been sharing our specific requests for USDA program funding with members of Congress in case they have some flexibility in how the money is distributed.

TAKE ACTION

If you want to tell your members of Congress to support organic farmers and direct market farms, the best way to reach them is likely to be email, since many congressional offices have shifted their staff to working remotely. You can find contact information for your Representative at www.house.gov (use the “Find Your Representative” box at the top right and then go to your member’s website and look for a Contact tab) and your two Senators at www.senate.gov (go to the “Senators” tab and then “Contact” to find the Senators from your state.)

Tell them you want any response to the pandemic to:

• Make sure that organic farmers are included in USDA’s aid payments and commodity purchases
• Include organic farmers in emergency disaster payments, emergency farm loans and loan forgiveness at the USDA and Small Business Administration, especially the Economic Injury Disaster Loan program of the SBA
• Ensure that farms, farmers markets, farm stands, and CSAs are deemed essential services and have the same status as retail stores when it comes to social gathering and loss of income
• Increase certification cost-share assistance for certified organic farms and handlers and provide immediate payment