Jun 24, 2020Potato leaders urge USDA to address issues with coronavirus aid
The National Potato Council pleaded for “meaningful” COVID-19 effects relief from the U.S. Department in a letter issued to Secretary of Agriculture Sonny Perdue on June 22.
The letter, which is signed by the NPC, and 17 other state and regional potato associations, asks for “fair and equitable access” to Coronavirus Food Assistance Program (CFAP) funds.
“Under the current structure of CFAP, potatoes do not have equitable access or receive meaningful relief from the program. The following limitations specifically impair potato growers’ ability to receive support despite the economic harm they have suffered.
- “Potatoes are ineligible for Category 1 payments (typically the largest category of payments).
- “In Category 2, potatoes have a payment level of $.04/lb. That level of payment could provide some relief if growers are able to utilize it. However, the largely contract-nature of the potato business makes it unlikely that growers could qualify for the category’s requirements that a commodity be shipped but unpaid for. It is much more likely that the customers who have contracted for the product would simply not require it to be shipped to the processing facility. This condition renders Category 2 unlikely to provide relief for many potato growers in its current form.
- “Category 3 is the one most likely to be made use of by the potato industry. However, the payment rate established by USDA is only $.01/lb. This payment rate is likely less than it would cost for a grower to responsibly destroy their crop in accordance with environmental requirements. It also appears to be a payment rate that is not equitable in regard to other commodities with similar production practices. As identified by USDA, sweet potatoes have a $0.18/lb payment rate under Category 2 and a payment rate of $0.04/lb under Category 3. Both rates are 400% larger than for potatoes ($.04/$.01 per lb. respectively). In general, the cost of production and the market price for these two commodities are extremely comparable but the payment rates are grossly disconnected, leaving potato producers without meaningful relief.”
Further, one of the largest issues with the format is that the USDA’s data only considers retail sales, not foodservice, which represents the majority of the U.S. potato market. According to comprehensive data compiled by the NPC, potatoes have suffered a 20.5% price decline, as of April 15. That includes all segments of the industry. Backup in the processing supply chain, which includes processors cutting 2020 acreage contracts and, in some cases, returning portions of the 2019 crop to growers, as well as losses to the export market, also are cited.
The NPC asks for numerous changes to the CFAP program, including:
- “The payment rate in Category 1 should be established and the payment rates in Categories 2 and 3 must be elevated all to a meaningful level that is equitable with other commodities.
- “Make CFAP payments eligible for the entirety of 2020.
- “Allow all growers who believe they can prove an economic injury to have an equal opportunity to apply for CFAP relief.
- “Allow growers to have equitable access to relief payments by eliminating the differing payment rates in Categories 1, 2 and 3.
“Looking forward, this crisis is impacting both the present year (2019) crop and the upcoming (2020) crop. We want to work with USDA to ensure that relief is available for producers that may have their 2020 crop impaired. This is becoming increasingly likely and these producers may suffer impacts that last well into the Fall of 2021.”
The full letter contains more detailed on issues facing the potato industry in regard to CFAP and on the requests to the USDA to remedy them.
Top photo: Potato industry leaders, including National Potato Council CEO Kam Quarles, speaking here, have issued a letter to the USDA on what they feel are inequitable aspects of the Coronavirus Food Assistance Program.