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USDA to purchase $470 million worth of food products

Published in Blog on  May 07, 2020

USDA on May 4 announced a plan to purchase $470 million worth of food products, including $50 million worth of potatoes, as part of a program designed to help farmers and Americans negatively affected by the coronavirus outbreak.

By Sean Ellis

Idaho Farm Bureau Federation

POCATELLO – Idaho and U.S. farm groups applauded USDA’s May 4 announcement that it would make $470 million worth of additional food purchases in an effort to help farmers and ranchers as well as Americans in need.

At the same time, these groups continue to ask the U.S. Department of Agriculture to eliminate the payment limitations included in a $19 billion ag relief program that was announced April 17. That program includes $16 billion in direct support payments to producers who have been negatively impacted financially by the COVID-19 outbreak.

But the support payments program also includes a cap of $125,000 per commodity or $250,000 per farm. Many farm group leaders have said these payment limitations do very little to provide relief to farming operations, particularly larger size operations.

As part of the purchasing program announced May 4, USDA intends to buy a wide variety of fruits, vegetables, meat, dairy and seafood products, including $120 million worth of dairy products and $50 million worth of potatoes.

Dairy and potatoes are Idaho’s No. 1 and No. 3 farm commodities in terms of farm-gate receipts, which is the revenue farmers receive for their commodity.

Idaho’s dairy industry applauds USDA’s May 4 announcement but at the same time continues to push the department to eliminate the direct support payment caps, said Idaho Dairymen’s Association Executive Director Rick Naerebout.

The purchases will help the industry some, he said, but he added, “If the caps are lifted, the direct payments will provide some meaningful relief for dairymen in Idaho.”

Leaders of Idaho’s potato industry responded similarly, applauding USDA for its food purchase programs but also making it clear that eliminating the direct support payment caps would be the best way to provide significant relief to producers. 

“We are continuing to push to get those payment limitations lifted,” said Pat Kole, director of industry and government relations for the Idaho Potato Commission. “It’s the only program with guaranteed delivery of help to farmers.”

Echoing what many other farm groups around the nation and state are saying, leaders of Idaho’s dairy and potato industries said they view the recent announcement as a down payment toward helping farmers, ranchers and dairymen hurt by the reaction to the coronavirus outbreak.

More is needed to provide substantive relief, they said.

Idaho’s potato industry very much welcomes the positive news of USDA’s $470 million food purchasing program, IPC Chairman Nick Blanksma stated in a news release from Idaho’s congressional delegation applauding the announcement.

“Given the loss of 60 percent of the market for Idaho potatoes and potato products in the food service sector, this is a good down payment that hopefully begins the process of restoring the normal movement of Idaho potatoes in our nation,” said Blanksma, a potato farmer from Hammett.

In a news release, the National Potato Commission also emphasized the “down payment” theme.

“Given the size of the crisis involving potatoes, this purchase is a partial down payment on the industry’s overall relief needs and more will be needed,” NPC President and Idaho potato farmer Britt Raybould stated. “In the short term, the announcement is very positive in that it provides clarity on the immediate relief efforts and gives family farms hope for more to come.”

NPC CEO Kam Quarles said the U.S. potato industry has been reeling because of the mandated shutdowns affecting the food service industry, which is where 60 percent of the nation’s spuds end up.

“We desperately need Congress and the administration’s partnership to defend America’s family farms in this crisis and believe today’s announcement is a positive step in that long road,” he stated in the NPC news release. 

In the news release from Idaho’s four-member congressional delegation, Sen. Jim Risch said Idaho’s agricultural industry has been severely disrupted by the virus outbreak, with some supply chains shrinking or even disappearing.

“Potatoes and dairy, two of Idaho’s largest agricultural commodities and industries that produce heavily for the food service pipeline, have been hit especially hard as their traditional markets have nearly vanished overnight,” Risch said. “I will continue working with (U.S. Agriculture Secretary Sonny Perdue) to find ways to support all facets of our agricultural industry and provide relief to our farmers and ranchers.”

While Idaho farmers and ranchers have felt a dramatic impact from the slowdown in the food service industry due to the COVID-19 outbreak, “Crops have not stopped growing and cows have not stopped producing milk, so the work of our essential agricultural industry has not stopped even though their markets are drying up through no fault of their own,” stated Rep. Mike Simpson. “There is still more work needed to help our Idaho farmers and ranchers but the food purchase announcement is welcome news.”

The food purchased by USDA will be bought through the department’s “Section 32” program, which refers to the 1935 Agriculture Act that authorizes the secretary of agriculture to purchase surplus foods and deliver them to food banks, schools and households in communities across the nation. 

According to a USDA news release, the purchases will occur during the third quarter of fiscal year 2020, which includes April-June, and deliveries will begin in July.

“America’s farmers and ranchers have experienced a dislocated supply chain caused by the coronavirus,” Perdue said in the news release. “USDA is in the unique position to purchase these foods and deliver them to the hungry Americans who need it most.”

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