U.S. Department of Agriculture rolls out the $19 billion Coronavirus Food Assistance Program (CFAP) that seeks to compensate farmers and ranchers, sustain supply chains, and support food security. $16 billion will be used to pay farmers and ranchers directly, while $3 billion will be used for commodity purchase and distribution.
On April 17, 2020, the United States Department of Agriculture (USDA) announced the rollout of the Coronavirus Food Assistance Program (CFAP). The program, announced by the Secretary of Agriculture, Sonny Perdue, aims to compensate farmers and ranchers, help citizens impacted by the current COVID-19 pandemic, sustain supply chains, and support food security. More than $19 billion has been set aside for this program. The amount will be distributed to agricultural producers and food distributors via two mechanisms: direct payments to farmers and ranchers, as well as commodity purchases for distribution to hungry families.
In the press briefing, the Secretary of Agriculture said that President Trump and the USDA will ensure that farmers, ranchers, and citizens affected by the COVID-19 pandemic will be taken care of. He continued to say that the Coronavirus pandemic has disrupted the country’s food supply chain and it has to adapt, but it remains stable, safe and secure. He noted that the safety and stability of the country’s food supply chain hinges on American farmers and ranchers. The distribution of the funds will provide quick relief to these groups and allow for the purchase and distribution of the agricultural abundance in the country, to help families in need.
$16 billion has been set aside for direct payments to farmers and ranchers. According to the press briefing, the funds will be paid to commodity producers for actual and anticipated losses as a result of supply chain disruptions and price declines. However, for commodity producers to qualify for the financial support, they must prove that their commodity price declined by more than 5 percent from January to April. While USDA has provided few details on how the funding will be divided, the commodity groups that are eligible for funding include livestock (cattle, lambs, yearlings and hogs), dairyland various types of crops.
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According to USDA, the department would begin accepting applications on May 26, 2020, with the payment distribution to start shortly after that. There is a payment limit of $125,000 per commodity, and the overall payment limit stands at $250,000 per individual or organization. Applications will be accepted through August 28, 2020.
The remaining $3 billion has been set aside for USDA purchase and distribution of commodity food items. USDA will work with regional and local distributors, whose workforce has been significantly impacted by the closure of many food service operations, including restaurants and hotels, to purchase $3 billion in fresh produce, dairy, and meat. USDA will make monthly purchases valued at $100 million per category.
Next, the local and regional distributors will supply pre-approved boxes of these food items to humanitarian organizations, community organizations, faith-based organizations, non-profit organizations, and foodbank services so the food can be distributed to citizens in need.
One of the companies awarded the contract to supply food to the Food Box Program is the OSI Group. OSI Group is a privately held food processing and distribution company that services the retail and foodservice industries, making custom food items for the world’s leading brands. The company was founded in 1909 as a butcher shop by German immigrant Otto Kolschowsky and is headquartered in Aurora, Illinois. OSI Group is among the nine organizations awarded a contract to supply food and services to the Food Box Program in Illinois. Specifically, OSI Group will supply bacon, hot dogs, sausages, and meatballs to humanitarian organizations, who will supply them to families affected by the COVID-19 pandemic.
USDA plans to organize webinars to shed light on how interested individuals and organizations can assist the organization to source and distribute these fresh agricultural products. Besides the $3 billion set aside for commodity purchase and distribution, USDA announced that it would welcome and take advantage of other funding sources to purchase and distribute these fresh agricultural products.
USDA has expedited the rollout of CFAP during the pandemic to ensure children and families receive the food they need in this time of job losses and disruption of the supply chain. Feeding kids and families will be even easier, thanks to the expanded flexibilities and waivers for child nutrition programs imposed by USDA in all 50 states and territories. This includes temporarily eliminating the requirement that meals be served in group settings as well as loosening restrictions on the time of day such meals are served. Earlier in March, students affected by the closure of schools in rural areas due to the Coronavirus pandemic were able to benefit massively from such a program as USDA forged partnerships with organizations such as Baylor Collaborative on Hunger and Poverty, PepsiCo, McLane Global, and other organizations to distribute over one million meals each week to students who formerly received the majority of their meals at school.