May 4, 2020
NPC cautions against triggering ‘irrational’ surges in potato imports

In a letter sent the week of April 27-May 1 to U.S. Department of Agriculture Undersecretary for Trade Ted McKinney, the National Potato Council (NPC) cautioned that the growing international stocks of fresh and processed potatoes could trigger “irrational surges in imports of these products as foreign interests search for scarce customers.”

The letter states, “As we push toward reopening the economy, it is extremely likely that these surges will become even more intense. For example, prior to the food service shutdown, exports of European fries to the U.S. in the first two months of the year went from $9 million in 2019 to $20 million in 2020. We anticipate this will resume with more intensity once food service begins to restart.”

NPC asks that USDA considers the potential economic harm due to volatile increases in imports and reviews the potential remedies available to counter this threat. “Left unchecked, these irrational import surges can prolong the impact of an economic and health crisis that has already cost a great deal for rural America,” the letter reads.

Just this week, the European Union announced that they would raise tariffs on various agricultural commodities in an effort to protect markets in response to building domestic oversupplies. Belgium also urged their citizens to eat more fries as their markets deal with a glut of processed products. Additionally, it was announced this week that Canada is cancelling its existing “Ministerial Exemptions” that allow U.S. potatoes to be imported into the various provinces in an effort to protect its oversupplied domestic market.

The full letter can be found here.

Idaho delegation calls for reduced bureaucracy to support grower eligibility

To ensure that USDA’s implementation of the CARES Act reflects local production practices, the Idaho Congressional delegation wrote Secretary of Agriculture Sonny Perdue this week calling for the Department to utilize a method for direct payment eligibility supported by the potato industry.

“We sincerely appreciate the unanimous support of the delegation to empower local decision-making in direct payments. If accepted by USDA, this approach will efficiently provide potato growers with access to vital relief funding,” said Britt Raybould, NPC President.

In the letter, Sens. Risch and Crapo and Reps. Simpson and Fulcher note that family farms likely seeking assistance under this program have numerous complicated relationships with their customers who include processors, distributors, packinghouses, and others. “Often these relationships occur with minimal, abbreviated, or no documentation,” which could harm their eligibility should the Department create a prescriptive set of documentation requirements for the program.

For example, the Members write, “in the potato industry, many producers have agreements with processors that span over a year. Those producers have bought seed for this 2020 crop year, prepared their ground and planted their crop at a cost of thousands of dollars per acre. At the same time, the processors who maintain these contracts are notifying growers verbally that they will void those contracts at levels up to 100% of the planted acres due to the food service shutdown. These impacted growers now possess full knowledge that their crop, planted specifically and uniquely for that one customer, will not be paid for. However, the growers do not possess a written notice of termination or documentation that the injury took place prior to the April 15 deadline. Moreover, many of these terminations were held off as long as possible by processors in hopes that CARES Act implementation may allow the agreements to be upheld. While the agreement may have been voided after April 15, the injury occurred due to decisions and market conditions that existed prior.”

As a result of these complex relationships, the Members urged the Secretary to utilize a method for direct payment eligibility for the CARES Act’s implementation. Such a method has been used before in the Market Facilitation Program (MFP), under which individual producers self-certify their economic harm with the Farm Service Agency, and their claim is then validated or rejected by FSA County Committees.

The full letter can be found here.

NPC, produce groups seek equal access to Paycheck Protection Program

NPC joined 37 agriculture groups this week on a letter to Congress requesting adjustments to the Paycheck Protection Program (PPP) to make it easier for specialty crop growers to access relief. Noting that, combined, the agriculture, forestry, fishing, and hunting sectors received only 1.3% of the original $349 billion in approved PPP funding, the groups argued that the program should be adjusted to ensure agriculture is given equal access to assistance.

“We continue to press forward on two major fronts in pandemic relief. The first, exemplified by this letter, is ensuring our growers are eligible for and able to make the most use of existing programs. The second is driving toward enhanced funding and new programs with Congress and the Administration to give growers the relief they need,” said RJ Andrus, NPC Vice President of Legislative and Government Affairs.

The ag groups outlined priorities for the next round of Small Business Administration loans, including:

  • Expedited approval of applications for rural lenders and allowing farm credit institutions to access the newly established PPP set-aside for small financial lenders;
  • Guidance for agricultural applicants to allow profits from farm equipment trades and breeding livestock to be included in the calculation of income for PPP;
  • Defining “primary place of residence” so it includes H-2A guest workers, because many of these workers spend more than half the year in the United States; and
  • Increasing the eligibility cap for agriculture so family farms and agricultural processors that employ more than 500 employees can continue operating and paying their employees.

The full letter can be found here.

— Information issued by the National Potato Council on May 1.

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