Late last week, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the President signed it into law. There are many benefits to all individuals and businesses, but this summary will focus on those that will benefit farmers and agriculture. For additional information, you can listen to our latest podcast, which also discussed the CARES Act and its impact on agriculture.
Direct payments to individuals
Single Americans will receive $1,200, married couples will get $2,400 and parents will see $500 for each child under age 17. However, the payments will start to phase out for individuals with adjusted gross incomes of more than $75,000, and those making more than $99,000 would not qualify at all. The thresholds are doubled for couples.
Student loan payments suspended
The Department of Education will suspend payments and interest on certain types of student loans through September 30. More information can be found here.
Boost for unemployment benefits
In an expansion of unemployment insurance, the federal government will give jobless workers an extra $600 a week for four months on top of their state benefits, which range from $200 to $600 a week, on average, depending on the state.
Paycheck Protection Program
This is a forgivable loan program administered by the Small Business Administration (SBA). It includes loans for up to two and a half months of payroll and payroll expenses. The loan and interest can be forgiven at the end of the term if used for payroll, rent, utilities and other qualifying expenses, and the number of employees is not reduced. This program is available to small businesses, sole proprietors and independent contractors. We’re waiting on clarification if farmers are eligible and can be used for their own personal income. In a conference call on Monday, Senator Hoeven stated that he believes farmers will be eligible for this program. More information will be provided as we learn more about this new program.
AgCountry is in the process of registering to be a lender for this program and putting together as efficient an application process as possible. We think most farmers will be able to utilize this program to some extent. We will share more information in the next couple days. Please continue to check back here on AgCountry.com.
Commodity Credit Corporation (CCC)
$14 billion was provided to replenish the CCC borrowing authority, giving USDA resources to assist producers. The 2018 and 2019 MFP 1.0 and MFP 2.0 were paid using CCC funding.
Funding for livestock producers and specialty crops
The bill provides $9.5 billion in separate funding to USDA to help livestock and specialty crop producers. There is not a program developed for these funds at this time. Senator Hoeven stated on Monday that he will be working with USDA and livestock producers to develop a program.
Hospitals get billions
The stimulus package would provide about $117 billion for hospitals, according to an estimate from the American Hospital Association, which called it an important first step. The bill creates a $100 billion public health and social emergency fund to reimburse providers for expenses and lost revenues related to the coronavirus pandemic. About $65 billion will go to hospitals with the rest funneled to doctors, nurses, suppliers and others, the association said. As an example, Senator Hoeven stated North Dakota hospitals are expected to receive approximately $1.25 billion.
Protections against foreclosures and evictions
The bill includes housing protections against foreclosures on mortgages and evictions for renters. The bill states that anyone facing a financial hardship from coronavirus shall be given a forbearance on a federally backed mortgage loan of up to 60 days, which can be extended for four periods of 30 days each. The legislation says that servicers of federally-backed mortgage loans may not begin the foreclosure process for 60 days from March 18.
More funding for food assistance
The bill provides $450 million for The Emergency Food Assistance Program, which supplies food banks that are expected to see more clients as job losses mount. Some $350 million would buy additional food, and $100 million would be used for distribution. While it appears that the bill provides billions in additional funding for the Supplemental Nutrition Assistance Program (food stamps) and Child Nutrition Program, it would not expand eligibility or benefits.
Support for Broadband
An additional $100 million in ReConnect grants will be provided to expand access to broadband in rural America for educational purposes, business, and access to critical telehealth services, and $200 million for a one-time telehealth program to be administered by the Federal Communications Commission (FCC).
Tax Relief
There are a number of significant, mostly temporary changes to federal tax laws. They will be covered in a separate communication.
Regulatory Relief Update
Besides the CARES Act, federal agencies have also provided regulatory relief. Here are a few items that impact agriculture.
1. Farm Service Agency (FSA) Loan Servicing
- FSA is extending deadlines for producers to respond to loan servicing actions, including loan deferral considerations for financially distressed and delinquent borrowers.
- FSA will temporarily suspend loan accelerations, non-judicial foreclosures and referring foreclosures to the Department of Justice.
- The U.S. Attorney’s Office will make the determination whether to stop foreclosures and evictions on accounts under its jurisdiction. More information can be found at farmers.gov/coronavirus
2. The Environmental Protection Agency has relaxed rules on concentrated animal feeding operations. If a facility is an animal feeding operation, and, due to disruptions caused by the COVID-19 pandemic, is unable to transfer animals off-site and, solely as a result of the pandemic, meets the regulatory definition of concentrated animal feeding operation (CAFO), as an exercise of enforcement discretion, the EPA will not treat such animal feeding operations as CAFOs (or will not treat small CAFOs as medium CAFOs, or medium CAFOs as large CAFOs). The EPA memorandum can be found here.
3. Federal Motor Carrier Safety Administration Issues emergency declarations, waivers and guidance to keep the supply chain moving.
Initially, this included such items such as medical equipment, food and other products to keep store shelves stocked, and was updated last week to include fuel. Last week, FMCSA took further action in addressing a number of concerns expressed by NCFC and its members, including:
- Providing a waiver extending Commercial Drivers Licenses (CDLs) and DOT required medical exams that expire after February 29 to June 30.
- Issuing guidance which provides flexibility to mandatory random drug and alcohol testing.
- Expanding relief of hours of service (HOS) limitations to agricultural supplies and a number of commodities, such as fertilizer and feed. However, we understand they are still reviewing seed at this time and are hopeful FMCSA will publish a more comprehensive list of covered commodities in the future.
4. Risk Management Agency (RMA) has extended crop insurance deadlines.
- April 29th is the 2019 production reporting deadline for most of the crops in our area. This has been extended by 30 days.
- Deadlines for submission of written agreement information has been extended to the acreage reporting date if needed.
5. The State Department has also been working to expedite H-2A visa applications for seasonal farm workers.
- They have waived the interview process for returning workers.
- The State of North Dakota reminds everyone that when foreign labor arrives, they must be isolated for 14 days, even to the point of someone else getting their groceries and essentials for them. Keep them isolated. More information on the H-2A Visa announcement can be found here.
AgCountry will continue to keep you updated with any legislative changes regarding COVID-19 and their impact on agriculture.
