NPC Coronavirus Report
Federal Response, Issues, and Resources
The National Potato Council is committed to providing our members accurate and useful information on all federal activities impacting the industry. This becomes even more important during this current pandemic crisis gripping the U.S. and the rest of the world. This information will be updated as issues develop.
Report Update: June 23, 2020
NPC Files Comments with USDA on CFAP
on June 22, NPC and state potato organizations filed official comments with responding to the Department of Agriculture’s (USDA) Notice of Funding Availability (Docket ID: FSA–2020–0004) for the Coronavirus Food Assistance Program (CFAP) as it relates to adding commodities that were not initially identified by USDA in the CFAP rule and also modifying the payment rates for various categories. In the letter, the groups request USDA’s immediate attention to the following comments with regard to ensuring that the heavily impacted potato industry is provided with fair and equitable access to these funds.
The groups write:
Overall, the U.S. potato industry comprises approximately $4 billion in sales annually and supports thousands of direct and indirect jobs. Potatoes are the most widely produced specialty crop in the country, with substantial commercial production in Idaho, Washington, Oregon, Colorado, Michigan, Wisconsin, California, Maine, Montana, North Dakota, Pennsylvania, North Carolina, New York, Ohio, Florida, Minnesota and Texas.
The U.S. potato industry is facing an unprecedented crisis related to the coronavirus pandemic. As we have discussed with the Department of Agriculture (USDA) at length over the past three months, the threat to family farms in the potato industry due largely to the closure of the food service sector may last well into 2021 if aggressive actions are not taken. Specifically, over 1.5 billion lbs. of fresh potatoes-for-processing and potato products are trapped in the supply chain with no likely customers. This oversupply has impacted both the 2019 and 2020 crop for U.S. family farms that grow potatoes. Some of these farms will have no ability to sell their 2019 or 2020 crop.
As a result of this oversupply, potato processing companies have invoked “Act of God” clauses in contracts with growers that either reduce or completely invalidate those agreements for the current 2019 crop. Additionally, those same growers have been advised that they will not have contracts for the upcoming 2020 crop year at nearly the levels of previous years. Therefore, the growers’ sole customer has advised them that their crop will either be reduced or entirely unnecessary for two successive years. For some growers, this notification came after all or a substantial portion of their crop had already been planted.
In turn, seed potato growers have had all or a portion of their crop returned without payment as their customers respond to the aforementioned reductions.
Over 70% of the potato industry has been directly impacted by the government-mandated shutdown due to the Coronavirus (COVID-19). Significant negative impacts have been suffered during the period of January 15-April 15 in the sub-sector of the potato industry comprising seed potatoes (10%) and the sub-sector of the industry serving the food service industry (60%).
These growers urgently need a direct payment program that provides meaningful relief as a result of this crisis.
The full letter is available here.
Report Update: June 12, 2020
Specialty Crop Producers Underrepresented in CFAP Relief Payouts
As of Monday, through the Coronavirus Food Assistance Program (CFAP) USDA has issued more than $1.4 billion in assistance to growers and producers, including $676 million to livestock producers, $368 million to non-specialty crop growers, and $337 million to dairy producers. However, less than two percent of payouts went to specialty crop producers, who received only $24 million in assistance to date.
“With only a two percent payout and the heavily impacted specialty crop sector making up 50 percent of the farm gate value of U.S. agriculture, clearly there’s a problem in how fruits and vegetables are accessing this program,” said Kam Quarles, NPC CEO.
House Agriculture Committee Chairman Collin Peterson (D-Minn.) and Reps. Jim Costa (D-Calif.), Stacey Plaskett (D-Virgin Islands), and Filemon Vela (D-Texas) wrote to Secretary Perdue this week expressing their concerns with USDA’s design and implementation of the program, noting the challenges faced by specialty crop producers in participating. Among the issues outlined in the letter, they write that “CFAP does not include commodities under contract, even though several of the most impacted crops are typically grown under contract, including potatoes and malting barley.” Additionally they note that
USDA is using data that does not fully represent the farmgate value of specialty crops when determining eligibility for the CFAP payments.
NPC and the state potato organizations have been in frequent communication with USDA to advocate for changes that would make CFAP more valuable for potato growers. For example, potatoes are currently not eligible for Category 1 as USDA has determined that there was less than a five percent overall decline in potato prices from January 15 through April 15. NPC disagrees with this assessment and has been working to make potatoes eligible for Category 1. Additionally, we have been working to increase payments to potato growers through Categories 2 and 3, which list potato reimbursement levels below similar commodities, such as sweet potatoes.
Yesterday, during a tour of Washington, Idaho, and Montana, USDA Secretary Perdue met with industry as well as key Congressional leaders to hear their concerns about the program along with recommended improvements. During the meeting, Idaho growers and state representatives provided the Secretary with information on why potatoes should be eligible for Category 1 of the Program and why payments in all 3 Categories should be adjusted upward to match other similar commodities. The Secretary committed to studying the issues raised and responding with adjustments as warranted.
In an interview with the Spokesman Review, the Secretary indicated that potato growers with canceled contracts may be eligible for Category 1 payments. “There were a couple misinformations I think, about things that were already under contract were not eligible, that’s not really true,” said Perdue. “If their contracts were canceled, if they didn’t have a market for their shipping, they’ll be eligible. If they donated potatoes during that period of time, they’ll be eligible for indemnification there.”
Earlier today, USDA published technical corrections to the rules governing the CFAP program. For specialty crops, the amendments specify that crops that were harvested and shipped but that were subsequently spoiled or unpaid due to loss of marketing channels between January 15, 2020, and April 15, 2020, are eligible for payment under Category 2. The amendments also correct Category 3 to specify that it includes donated crops and remove the term “unpriced,” which does not apply to payments for specialty crops that did not leave the farm or were donated, or mature crops that remained unharvested between January 15, 2020, and April 15, 2020, due to loss of marketing channels.
NPC is currently reviewing the technical corrections and will provide feedback to USDA prior to the June 22 public comment period deadline.
Report Update: May 22, 2020
NPC Letter to USDA: Direct Payment Program Needs Improvement
After extensive conversations with the industry to better understand the real-world impact of the new Coronavirus Food Assistance Program, NPC and 13 state grower organizations issued a letter to Secretary Perdue calling on USDA to address several deficiencies in the CFAP rules that prevent the program from having a meaningful impact for the nation’s potato growers.
As the letter points out, the industry appreciates the recent USDA announcement of a $50 million surplus commodity purchase for potatoes under Section 32 authority and its efforts to provide direct payments to struggling family farms. Unfortunately, the CFAP does not meet the goal for our industry of a meaningful direct payment program.
The groups raise several concerns about the eligibility categories and payment rates, including:
- Why potatoes are ineligible for Category 1 payments when it is clear that several potato producing states had growers who suffered a significant price loss during the specified January-April time period;
- Why USDA only considered fresh (retail) market data for potatoes to determine a five percent price loss rather than the processed (food service) side of the industry that operates largely on a contract basis;
- Why similar crops, particularly sweet potatoes, have significantly higher payment rates when market prices are comparable; and
- Why unusable product left on the farm is treated differently than shipped product.
Given these examples, the industry requests USDA to take the following urgent actions to provide relief to our family farmers:
- Make potatoes eligible for Category 1 payments at a meaningful level, subject to requirements of verifying economic losses in a manner consistent with the seed, fresh and the contract nature of the processing sides of the potato industry; and
- Raise the payments for potatoes in Category 1, Category 2, and Category 3 to levels that are consistent with the payment levels of other commodities and no less than $.04 per lb.
The full letter can be found here.
Report Update: May 20, 2020
New OSHA Policy on Determining if COVID-19 is Work Related
On May 19, 2020 the U.S. Department of Labor Occupational Safety and Health Administration issued an updated memorandum providing guidance to employers with respect to the recording of work-related COVID-19 cases. The memo goes into effect on May 26, 2020.
To determine if a COVID-19 illness was contracted at work, Compliance Safety and Health Officers should take into account all reasonably available evidence, including:
- If several cases develop among workers who work closely together and there is no alternative explanation;
- If the illness is contracted shortly after lengthy, close exposure to a particular customer or coworker who has a confirmed case of COVID-19 and there is no alternative explanation;
- If the worker’s job duties include having frequent, close exposure to the general public in a locality with ongoing community transmission and there is no alternative explanation; or
- If the worker, outside the workplace, closely and frequently associates with someone (e.g., a family member, significant other, or close friend) who (1) has COVID-19; (2) is not a coworker, and (3) exposes the employee during the period in which the individual is likely infectious.
Report Update: May 19, 2020
$16 Billion in Direct Support Available to Food Producers
President Trump today held a press event at the White House to announce the details of the Coronavirus Food Assistance Program (CFAP), which will provide up to $16 billion in direct payments to U.S. farmers and ranchers impacted by the coronavirus pandemic. The payments are limited to $250,000 per person or entity.
“Given the scope of this crisis, we knew the initial funding would be insufficient to meet the need of family farms. Based upon the limited resources announced today under this direct payment program, the potato industry is strongly urging Congress to act rapidly to provide more resources and flexibility to fill this huge gap and maintain producers’ livelihoods,” said Kam Quarles, CEO of the National Potato Council.
The potato industry has advocated for two distinct programs to provide relief to family farms impacted by this crisis. First, it has called for USDA to step in to buy significant amounts of oversupplied potatoes and potato products. Without these purchases, family farms will be impacted into the fall of 2021. Second, the industry has called for providing meaningful direct payment relief to growers who cannot fully benefit from surplus commodity purchases.
“Over the past two months, the U.S. potato industry has urged USDA to move quickly to help clear product out of the supply chain and support family farmers with direct support,” said NPC President Britt Raybould. “With 60 percent of all potatoes grown in the United States destined for food service customers, the nationwide closure of restaurants, bars, schools, and entertainment venues dried up the potato supply chain. The resulting oversupply of 1.5 billion pounds of potatoes could fill the U.S. Capitol 14 times over.”
For specialty crop producers, including potato growers, the total direct payments will be based on three criteria:
- The volume of production sold between January 15 and April 15, 2020;
- The volume of production shipped, but unpaid; and
- The number of acres for which harvested production did not leave the farm or mature product destroyed or not harvested during that same time period, and which have not and will not be sold.
According to USDA, the program includes a payment limitation of $250,000 per person or entity for all commodities combined. Applicants who are corporations, limited liability companies or limited partnerships may qualify for additional payment limits where members actively provide personal labor or personal management for the farming operation. Producers will also have to certify they meet the Adjusted Gross Income limitation of $900,000 unless at least 75 percent or more of their income is derived from farming, ranching or forestry-related activities. Producers must also be in compliance with Highly Erodible Land and Wetland Conservation provisions.
Producers can apply for assistance beginning on May 26 through August 28, 2020, through local Farm Service Agency offices. Additional information and application forms can be found at farmers.gov/cfap. Producers will receive 80 percent of their maximum total payment upon approval of the application. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date as funds remain available.
Report Update: May 4, 2020
Potato Industry Welcomes $50 Million USDA Purchase for Potatoes
The National Potato Council today welcomed USDA’s announcement of a $50 million surplus potato purchase to support the industry during the COVID-19 pandemic. The potato purchase, the largest of all the specialty crop purchases, was part of a $470 million Section 32 food purchase announced by USDA. This purchase is in addition to those previously announced by USDA.
“This is very welcome news from Secretary Perdue, Undersecretary Ibach, and the entire team at USDA. Given the size of the crisis involving potatoes, this purchase is a partial down payment on the industry’s overall relief needs and more will be needed. In the short term, the announcement is very positive in that it provides clarity on the immediate relief efforts and gives family farms hope for more to come,” said Britt Raybould, NPC President.
“Due to mandated shutdowns, the U.S. potato industry has been reeling from an oversupply of processing potatoes left over from the 2019 harvest,” said NPC CEO Kam Quarles. “Individual potato growers and state potato associations have distributed millions of pounds of potatoes to charities, food banks, and local drop off locations nationwide, incurring substantial financial losses in support of the needy despite their own businesses being threatened by the pandemic. We desperately need Congress and the Administration’s partnership to defend America’s family farms in this crisis and believe today’s announcement is a positive step in that long road.”
According to the announcement, The Agricultural Marketing Service (AMS) will purchase a wide variety of fruits, vegetables, meat, dairy, and seafood products. These “USDA Foods” will then be provided to USDA’s Food and Nutrition Service (FNS) nutrition assistance programs, including food banks.
Report Update: April 15, 2020
Press Release: DHS and USDA Move to Protect American Farmers and Ensure Continued Flow of America’s Food Supply
Department to Temporarily Amend Certain H-2A Requirements During COVID-19 National Emergency
(Washington, D.C., April 15, 2020) – The Department of Homeland Security, with the support of the U.S. Department of Agriculture (USDA), has announced a temporary final rule to change certain H-2A requirements to help U.S. agricultural employers avoid disruptions in lawful agricultural-related employment, protect the nation’s food supply chain, and lessen impacts from the coronavirus (COVID-19) public health emergency. These temporary flexibilities will not weaken or eliminate protections for U.S. workers.
Under this temporary final rule, an H-2A petitioner with a valid temporary labor certification who is concerned that workers will be unable to enter the country due to travel restrictions can start employing certain foreign workers who are currently in H-2A status in the United States immediately after United States Citizenship and Immigration Services (USCIS) receives the H-2A petition, but no earlier than the start date of employment listed on the petition. To take advantage of this time-limited change in regulatory requirements, the H-2A worker seeking to change employers must already be in the United States and in valid H-2A status.
Additionally, USCIS is temporarily amending its regulations to protect the country’s food supply chain by allowing H-2A workers to stay beyond the three-year maximum allowable period of stay in the United States. These temporary changes will encourage and facilitate the continued lawful employment of foreign temporary and seasonal agricultural workers during the COVID-19 national emergency. Agricultural employers should utilize this streamlined process if they are concerned with their ability to bring in the temporary workers who were previously authorized to work for the employer in H-2A classification. At no point is it acceptable for employers to hire illegal aliens.
“This Administration has determined that continued agricultural employment, currently threatened by the COVID-19 pandemic, is vital to maintaining and securing the country’s critical food supply chain. The temporary changes announced by USCIS provide the needed stability during this unprecedented crisis,” said Acting Secretary of Homeland Security Chad F. Wolf.
“USDA welcomes these additional flexibilities provided by the Department of Homeland Security today,” said Secretary of Agriculture Sonny Perdue. “Providing flexibility for H-2A employers to utilize H-2A workers that are currently in the United States is critically important as we continue to see travel and border restrictions as a result of COVID-19. USDA continues to work with the Department of Homeland Security, the Department of Labor and the Department of State to minimize disruption and make sure farmers have access to these critical workers necessary to maintain the integrity in our food supply.”
The temporary final rule is effective immediately upon publication in the Federal Register. If the new petition is approved, the H-2A worker will be able to stay in the United States for a period of time not to exceed the validity period of the Temporary Labor Certification. DHS will issue a new temporary final rule in the Federal Register to amend the termination date of these new procedures in the event DHS determines that circumstances demonstrate a continued need for the temporary changes to the H-2A regulations.
The H-2A nonimmigrant classification applies to alien workers seeking to perform agricultural labor or services of a temporary or seasonal nature in the United States, usually lasting no longer than one year, for which able, willing, and qualified U.S. workers are not available.
Report Update: April 7, 2020
SBA Paycheck Protection Program FAQs
USDA and SBA have provided sets of Frequently Asked Questions as resources for businesses in helping clarify PPP eligibility. Specifically, USDA updated its coronavirus FAQ to include information on PPP eligibility for agriculture producers:
Q: Are agricultural producers, farmers, and ranchers eligible for the Small Business Administration’s Paycheck Protection Program (PPP)?
A: Agricultural producers, farmers, and ranchers with 500 or fewer employees whose principal place of residence is in the United States are eligible.
Farms are eligible if: (i) the farm has 500 or less employees, OR (ii) it fit within the revenue-based sized standard, which is an average annual receipts of $1M.
Additionally, farms can qualify for PPP if it meets SBA’s “alternative size standard.” The “alternative size standard” is currently: (1) a maximum net worth of the business not more than $15 million, AND (2) the average net income Federal income taxes of the business for the two full fiscal years before the date of the application be not more than $5 million.
SBA's FAQs (updated April 6) can be found here.
Report Update: April 3, 2020
SBA Paycheck Protection Program Applications Open Today
The Phase 3 COVID-19 relief bill’s Paycheck Protection Program, administered through the Small Business Administration (SBA), today opened to small businesses and sole proprietorships applying for relief. Starting April 10, independent contractors and self-employed individuals can apply. SBA encourages those interested to apply as quickly as possible due to the funding cap.
The program permits eligible entities to borrow up to 2.5 times its monthly payroll. The loan, which would be issued by an SBA-approved lender, has a 100 percent federal guarantee.
To gain access to these resources, entities of 500 employees or fewer primarily need to prove they existed and had employees as of February 2020. The federal government would pay the lender to defer all payments on the loan for up to six months. Any organization that sustains full time employment levels over the course of the coronavirus crisis could receive up to eight weeks of salary, wages, rent, and other operating expenses fully forgiven, converting a substantial share of the loan into a grant.
For more information, click here.
Report Update: March 31, 2020
- Relief for PACA-covered and other contractual obligations that cannot be completed due to the crisis;
- Fruit and vegetable purchases for federal feeding programs to create demand lost due to the food service collapse; and
- International programs to provide relief for lost export markets.
Report Update: March 21, 2020
Status of the National Potato Council Office
On Monday, March 16, the National Potato Council offices went on mandatory working-from-home status. This status will remain in effect until further notice and in accordance with guidance from the District of Columbia and the Centers for Disease Control.
Please email NPC staff at the following addresses with any questions or urgent needs. Despite not being in the office, we are highly accessible:
Kam Quarles – email@example.com
Mike Wenkel – firstname.lastname@example.org
Hollee Alexander – email@example.com
Hillary Hutchins – firstname.lastname@example.org
Mark Szymanski – email@example.com
Latest Congressional Actions
On Thursday, March 19, Senate Republicans released their trillion-dollar proposal for a third COVID-19 response package, which will serve as a starting point for negotiations with the Democrats, who have already outlined their own $750 billion plan.
The Republican plan would:
- Provide loan and tax relief to small businesses;
- Provide a $1200 tax rebate to individuals and $2400 to married couples;
- Provide up to $208 billion in collateralized loans and loan guarantees to severely distressed sectors, including $58 billion for airlines; and
- Address healthcare supply shortages and provide support for COVID-10 patients and health care providers.
One component of the legislation involves guaranteed benefits under the Family Medical Leave Act. Given the temporary, seasonal nature of the U.S. agriculture industry, a growing number of associations are asking that reasonable requirements and limitations be placed upon these benefits to ensure that they fulfill their intended purpose, rather than encourage abuse and result in unintended consequences for both employees and employers.
Majority Leader McConnell has said the Senate will remain in session until the package is passed.
Meanwhile, in the House, two members have tested positive for COVID-19 and several others are self-quarantining.
- Farm workers to include those employed in animal food, feed, and ingredient production, packaging, and distribution; manufacturing, packaging, and distribution of veterinary drugs; truck delivery and transport; farm and fishery labor needed to produce our food supply domestically;
- Farm workers and support service workers to include those who field crops; commodity inspection; fuel ethanol facilities; storage facilities; and other agricultural inputs;
- Employees engaged in the manufacture and maintenance of equipment and other infrastructure necessary to agricultural production and distribution;
- Employees and firms supporting food, feed, and beverage distribution, including warehouse; vendor-managed inventory controllers and blockchain managers;
- Food manufacturer employees and their supplier employees—to include those employed in food processing (packers, meat processing, cheese plants, milk plants, produce, etc.) facilities; livestock, poultry, seafood slaughter facilities; pet and animal feed processing facilities; human food facilities producing by-products for animal food; beverage production facilities; and the production of food packaging workers;
- Workers supporting the sanitation of all food manufacturing processes and operations from wholesale to retail;
- Workers supporting groceries, pharmacies and other retail that sells food and beverage products; and,
- Restaurant carry-out and quick serve food operations, including carry-out and delivery food employees.
- For solutions to feeding children impacted by COVID-19, email FeedingKids@usda.gov.
- For solutions impacting America’s food supply chain and other logistical complications, email FoodSupplyChain@usda.gov.
- For solutions impacting agriculture labor visas, email AgLabor@usda.gov.
- Current Good Manufacturing Practice, Hazard Analysis and Risk-Based Preventive Controls for Human Food;
- Current Good Manufacturing Practice, Hazard Analysis and Risk-Based Preventive Controls for Food for Animals; and
- Foreign Supplier Verification Programs for Importers of Food for Humans and Animals.
- Businesses should contact FEMA’s National Business Emergency Operations Center at NBEOC@FEMA.DHS.GOV if they encounter issues with state or local orders that necessitate shutdowns or transportation restrictions or otherwise affect the supply chain.
- If companies have any food safety related questions, they should be directed to the FDA Food and Cosmetic Information Center at www.FDA.gov/FCIC.
- The State Department needs to modify its current stance and instead consider all H-2A visa processing operations as essential (meaning they do not stop even if other activities are suspended); and,
- The individual H-2A petitions must be considered as emergencies (meaning they are elevated above other visas). This is appropriate given the risk to the U.S. food supply if these workers are unable to participate in vital operations during 2020.