The Senate economic stimulus bill would allow the Agriculture Department to temporarily add $20 billion to a fund the Trump administration used to make payments to farmers and ranchers adversely affected by retaliatory tariffs imposed by U.S. trading partners.
The bill also would give farmers more time to repay marketing assistance loans.
But Democrats are balking at the provisions, amid indications from at least one aide that Democrats would be willing to make concessions on both in exchange for more money for food stamps.
A House Democratic aide indicated the two Commodity Credit Corporation provisions could be traded for higher food stamps.
“This comes down to the fundamental bargain in American food policy,” the aide said, speaking on background because negotiations are continuing. “If we are going to help farmers, we must help hungry people.” To reach agreement, the aide said, “Senate Republicans will have to agree to changes that ensure adequate [Supplemental Nutrition Assistance Program] benefits flow to people affected by this pandemic.”
The appropriations package in the bill would increase the Agriculture Department’s borrowing authority for the Commodity Credit Corporation from $30 billion to $50 billion. The money would come from the Treasury Department. The Senate legislation makes no mention of new trade aid payments although it says the department may use up to $20 billion to "prevent, prepare for, and respond to coronavirus.”
A Senate Republican aide said Democrats opposed that increase as well as one that would extend to 90 days the repayment period for marketing assistance loans.
The issue was one of the sticking points as the Senate rejected, 49-46, a motion to proceed to the package Monday, leaving the legislation in limbo.
The Senate bill also includes $15.5 billion for a contingency fund for SNAP, formerly known as food stamps, to cover rising food costs or enrollments and $9 billion for child nutrition programs, including the school lunch program.
Democrats also continued to object to provisions they say don’t provide enough money for workers, health care and local governments to address the COVID-19 pandemic or require enough accountability from large financial institutions and corporations that would receive aid.
Sen. Patrick J. Leahy, D-Vt., the Appropriations Committee ranking member, said President Donald Trump's use of the Commodity Credit Corporation for trade aid “was a political move” to address the financial fallout on his supporters in agriculture after retaliatory tariffs cost them export sales.
Leahy said the fund is “supposed to be for the whole country not just his supporters.”
But Senate Appropriations Chairman Richard C. Shelby, R-Ala., compared the aid to the Commodity Credit Corporation to steps taken by the Federal Reserve to contain the economic damage of the COVID-19 pandemic.
"The commodity credit — the CCC — is very important. We're trying to put that in there," he said. "The Fed is putting liquidity in and it's so important to have liquidity, access to money in a crisis. And in the farm community, it's the same thing."
"It's all together, the economy is all together," he added. "So I think it's very important that farmers in a crisis like this — a world crisis — have liquidity and access to money, because our economy will come back. But we've got to get our arms around this crisis."
The Commodity Credit Corporation funds agriculture conservation, farm subsidy and commodity purchases for domestic and international food programs.
Speaker Nancy Pelosi, D-Calif., said House Democrats have an alternative stimulus bill, but it was unclear Monday if the House would proceed with it.
In what appears to be a recent version, the House bill would direct the Agriculture Department to use the Commodity Credit Corporation to buy $150 million in specialty crops such as fruits and vegetables, $75 million in meat and poultry products and $75 million in dairy products. The bill also would create a supplemental payment to dairy farmers who meet certain requirements.
The administration tapped the Commodity Credit Corporation in 2018 and 2019 to make nearly $23 billion in Market Facilitation Program payments to eligible farmers and ranchers who lost overseas sales because of Section 232 national security tariffs on imported steel and aluminum and Section 301 trade enforcement duties on most imported Chinese goods.
The tariffs led other countries to retaliate with their own duties, largely on U.S. agricultural products. Section 232 refers to a provision of a 1962 trade law and Section 301 refers to a provision of a 1974 trade law.
Added trade aid
Trump raised the possibility in a February tweet of a new trade aid program this year if farmers and ranchers needed a financial bridge until they saw the full benefits of the phase one U.S.-China trade agreement and the United States-Mexico-Canada Agreement on trade, which could take effect June 1.
But Agriculture Secretary Sonny Perdue continues to say a new round of payments should not be needed since Beijing, although battered by COVID-19, is taking preparatory steps necessary to make good on purchase obligations under the phase one agreement. Perdue’s optimism appeared bolstered Friday by the U.S. wheat industry’s announcement that China has made its largest wheat purchase since March 2018.
But in a Friday conference call, American Farm Bureau President Zippy Duvall said another round of trade payments may be necessary.
“The trade agreements have not picked up as fast as we expected. We were expecting it to be a little slow but not this slow. We are approaching the time when we’re starting to talk about having another MFP payment,” Duvall said. “The president’s tweet said he was for it [if it] was needed. We think we’re getting real close to needing that.”
On that call, the organization’s chief economist John Newton said some agricultural sectors are asking Congress to give the Agriculture Department authority to allow crop and dairy farmers to reconsider price and income support programs they signed onto before markets began dropping as COVID-19 spread internationally. The Commodity Credit Corporation funds the programs.
On Monday, Duvall called for the Senate to keep the provision on the Commodity Credit Corporation as a way to expand the Agriculture Department's ability to address farmers’ economic crunch.
Duvall said the $50 billion borrowing authority is necessary “because thousands of producers will need help with cash flow given the rapid and unanticipated decline in commodity prices, the likely closure of ethanol plants, and the decline in full-service restaurant and school meal demand, among other changes.”
“Congress must have farmers’ backs by expanding USDA’s borrowing authority under the Commodity Credit Corporation. There is a long history of the CCC being tapped to responsibly support agriculture in times of crisis,” Duvall said.
In addition to the boost in borrowing authority for the Commodity Credit Corporation and food stamp funds, the Senate bill would provide:
- $1 billion in lending authority for rural business development programs and $125 million for telemedicine efforts and expansion of broadband service in small towns and rural areas.
- $450 million for commodity food purchases for emergency food assistance through food banks and other nonprofits.
- $4 million for the Foreign Agricultural Service, which promotes and develops export markets for U.S. farm goods, to cover costs of moving overseas employees and their families back to the United States.
- $33 million for the Food Safety and Inspection Service to hire temporary and part-time workers and to cover relocation costs for temporary inspectors.
Jennifer Shutt contributed to this report.