Support for agriculture in the COVID-19 stimulus package

January 7, 2021

Following months of negotiations, Congress passed the $900 billion COVID-19 stimulus bill with financial support for agricultural producers, enhancements to the Paycheck Protection Program (PPP), and funding for agricultural research and food assistance programs.

The bill includes $1.5 billion for food purchases and distribution and grants and loans to small and midsized food processors and distributors, farmers’ markets, and producers to help with COVID response, including worker protections.

The bill also includes language requiring USDA include producer’s crop insurance indemnities, non-insured crop disaster payment, and WHIP payments, and allow producers to substitute 2018 sales for 2019 sales when determining CFAP eligibility.

Further, USDA will make additional payments under CFAP and CFAP 2 to ensure payments align with calculated gross payment or revenue loss. However, payments will not exceed calculated gross payment of 80% of revenue loss. USDA will also consider income from agricultural sales and net operating loss carryforward of the previous year in income determination. USDA will also consider farm practices such as certified organic production when making direct support payments.

The bill provides $100 million for the Local Agriculture Market program and $60 million for a grant program for meat and poultry slaughter and processing facilities seeking federal inspection or eligibility for the Cooperative Interstate Shipment program to modernize facilities or equipment; comply with packaging, labeling, and safety requirements; and develop food safety processes. USDA must also deliver a report on possible improvements to the program.

Finally, the bill includes $284 billion for a second round of forgivable small business loans under the PPP, including $20 billion for Economic Injury Disaster Loan (EIDL) Grants for businesses in low-income communities. The second round of PPP loans are eligible to businesses with 300 or fewer employees, businesses that have used or will use their first PPP loan, and businesses that show a 25% loss in gross revenue in any quarter of 2020. The bill also clarifies that specific expenses paid with forgiven PPP loans are tax-deductible, superseding IRS guidance posted earlier this year.