The $2-trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, has been a saving grace during the COVID-19 era. Companies industry-wide are most aware of the CARES Act’s $350-billion apportionment to the U.S. Small Business Administration (SBA) for emergency loans. The SBA’s most popular relief package is arguably the Payroll Protection Program (PPP), which provides 100-percent federally guaranteed and potentially forgivable loans to elgibable businesses.
In recent weeks, it has become evident to GHJ that the PPP has consumed most of the time and effort of the Firm’s food, beverage and agriculture clients. However, additional relief opportunities exist for such companies as a result of the CARES Act.
U.S. Department of Agriculture Funding
The U.S. Department of Agriculture (USDA) was allotted $49 billion under the CARES Act. Funding can largely be divided into three categories:
- $141 million for USDA operational needs
- $23.5 billion in assistance for producers
- $24.8 billion primarily for supplemental nutrition and child nutrition assistance programs
$23.5 Billion for Producers
The $23.5 billion in assistance for producers warrants special attention for companies in the food, beverage and agriculture industries. Of the $23.5 billion in assistance for producers, $9.5 billion was allotted to the Secretary of Agriculture to support businesses impacted by COVID-19. Eligible businesses include producers that supply local food systems, including those of livestock, dairy and specialty crops. The USDA defines specialty crops as “fruits and vegetables, tree nuts, dried fruits, horticulture and nursery crops including floriculture [which] must be cultivated or managed and used by people for food, medicinal purposes and/or aesthetic gratification to be considered specialty crops.”
However, the verdict is still out on specific eligibility requirements. The remaining $14 billion was allotted to enhance the borrowing authority of the Commodity Credit Corporation (CCC), a federally operated entity committed to the stabilization, support and protection of farm income, prices and supply.
Looking to the Future
Given these provisions to the USDA, additional financial relief looms for food, beverage and agriculture companies. Yet, significant questions over eligibility, timing, funding limits and general mechanics remain open.
In early April, however, both the Agriculture Secretary Sonny Perdue and House Agriculture Chairman Collin Peterson advised that an inclusive plan is being developed and an announcement over payments should occur within two weeks.
We encourage you to reach out to our COVID-19 Resource Team if you have any questions specific to your organization.