NOTE: This blog post was edited 3/31/20 to reflect changes in the implementation of the CARES Act by the Small Business Administration.
On March 27, 2020, the House of Representatives passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was previously passed unanimously by the Senate late on Wednesday evening. The bill was signed into law shortly after the House vote. This $2 trillion, nearly 900-page bill, also being called “Phase 3” of the COVID-19 legislative responses, contains new programs and big changes, several of which will impact young farmers and the food system at large. We’ve highlighted a few of the most relevant changes below.
Support for Local and Regional Food Systems
The CARES Act includes a new program that will provide $9.5 billion in economic relief for producers who:
- Grow specialty crops
- Supply local food systems, including farmers markets, restaurants, and schools
- Raise livestock, including dairy producers
We heard from many of you in our survey that concerns about loss of markets were top of mind as you adjust to COVID-19. This new fund is a significant win, and the Young Farmers team is humbled by the over 1,400 of you who took action during these challenging times to tell your Members of Congress that this support was needed.
Given that this is a new program with no specifics in the legislation, there is still much to be determined at the Department of Agriculture about how payments will be structured and delivered. Young Farmers and our partners in D.C. will continue to work to make sure that beginning, socially disadvantaged, and small-scale producers will be able to benefit from this new funding.
Small Business Assistance
The Small Business Administration provides Economic Injury Disaster Loans to small businesses included in “declared disaster areas,” which now includes all U.S. states, territories, and Washington, D.C. as part of the COVID-19 crisis.
As currently implemented, these loans are not being made available to agricultural businesses other than aquaculture enterprises, agricultural cooperatives, and nurseries. Young Farmers is continuing to track these loans and will provide updates on changes or advocacy opportunities as they arise.
As a new addition to these loans, the CARES Act also allows for $10,000 grants (called an “advance” in the legislation). These may be used for:
- providing paid sick leave to employees unable to work due to the direct effect of the COVID-19
- maintaining payroll to retain employees
- meeting increased costs to obtain materials unavailable due to interrupted supply chains
- making rent or mortgage payments; and
- repaying obligations that cannot be met due to revenue losses
Student Loan Debt
The CARES Act includes automatic suspension of payments and interest for federal student loans until September 30th.
For more information about student loan provisions in the bill, check out this piece by Forbes.
Although the Phase 3 bill covers a lot of ground, there are pieces that are missing from the bill. Individuals without Social Security Numbers are not eligible for the direct cash payment per household, and the expansion of emergency Medicaid is likewise open to only to a certain subset of immigrants who have had a “qualified” immigration status for five years. These provisions leave out millions who remain on the front lines of providing essential services, including in our food system. The bill increases overall Supplemental Nutrition Assistance Program (SNAP) funding, but does not increase the amount of the benefit per family as has been done in past recovery bills. It also does not specifically mention the sub-programs that connect local food to nutrition efforts.
So, while there are many important wins in the CARES Act, we recognize that there remains more work to do. There are already discussions of a Phase 4 bill in Congress, and Young Farmers will continue to advocate for policy solutions that move us towards a food system that is resilient through the COVID-19 pandemic and beyond.
Thank you to everyone who took action and helped win support for direct-market growers in the CARES Act. If you’re not signed up for our action alerts, join us!
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