The potato industry wants more equitable relief under the federal Coronavirus Food Assistance Program, or CFAP.
The National Potato Council and 18 other potato-industry organizations in a June 22 letter to Agriculture Secretary Sonny Perdue said USDA should make the crop eligible for the relief category with the highest per-unit reimbursement for losses, and increase other rates “to a meaningful level that is equitable with other commodities.”
The comments are in response to USDA’s original funding-availability notice, which came with a 30-day comment period to help identify additional crops eligible for relief and set payment rates for them.
Potato-price declines were well beyond the 5% threshold required to qualify for the category with the highest reimbursement rate, Council CEO Kam Quarles said in an interview.
A survey across all segments of the potato industry found a 20.5% overall price decline nationally from mid-January to mid-April, he said. USDA initially looked at data from terminal, or wholesale, markets, “and the majority of our business is not conducted at terminal markets. A lot of the potato business is conducted on contracts.”
Producers of potatoes and other commodities experienced major losses from mandated restaurant and other foodservice closures to reduce coronavirus spread. The U.S. potato industry produces about $4 billion in annual sales, about 60% of which are to foodservice.
“We think there are tremendous justifications for, at minimum, including potatoes in Category 1, and at a meaningful payment level,” Quarles said.
CFAP funding challenges aren’t unique to potatoes.
Quarles said fruits and vegetables so far have received about 2% of total payments even though they account for more than half of U.S. farmgate revenue.
Potato groups in the letter urge USDA to extend payments to include losses for all of 2020. The current round of funding covers losses through April 15. “The threat to family farms in the potato industry due largely to the closure of the foodservice sector may last well into 2021 if aggressive actions are not taken.”
They said more than 1.5 billion pounds of fresh potatoes for processing and potato products are “trapped in the supply chain with no likely customers.” Processors canceled or reduced contracts for the 2019 storage crop, and advised growers that contracts for the 2020 crop, partly planted before the notification, would be well below average.
USDA should provide potato growers who believe they can prove economic injury with equal opportunity to apply for relief, and “equitable access to relief payments by eliminating the differing payment rates...,” the letter said.
USDA reimburses losses at 4 cents per pound of potatoes that were shipped but spoiled, and 1 cent for those that never left the farm. The crop now does not qualify for reimbursement on price declines or sales losses.
The industry wrote that few growers likely would qualify for the 4-cent reimbursement because customers would cancel shipments. The 1% reimbursement likely falls below the cost to destroy the crop in accordance with environmental requirements and appears “not equitable in regard to other commodities with similar production practices.”
Seed potatoes are about 10% of the industry. About 5% of the overall crop was discarded, and volume delivered to commercial growers sold for about 12% less, the letter said. Selling seed potatoes to processors was not an option after about April 1.
June 24, 2020 at 04:15AM
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Potato industry seeks improved CFAP relief | Research Center - Capital Press
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