One of the seemingly odd paradoxes of the national food supply chain in this time of the Covid-19 pandemic is that there are shortages of many foods in grocery stores, while at the same time there’s an abundance of newly harvested produce and grains, dairy milk and livestock with nowhere to go. As a result, crops are being plowed under, milk is being dumped and ranchers are having to sell their livestock at a loss.
The reason for this is that about half of all food produced in the U.S. goes to food service and institutions, such as schools, which are closed, and restaurants, many of which have closed or are doing a very limited amount of business offering food pick up and delivery.
But even though the economy has shut down and 50 percent of the market has vanished in a matter of weeks, crops still keep growing and farmers keep on farming. Many farmers therefore are in a world of hurt.
As a result, after much prodding from farm groups and farm state legislators, The United States Department of Agriculture (USDA) agreed in late April to purchase $3 billion worth of food from American farmers.
“Farmers are dumping fresh produce, their dumping fresh milk, there’s talk of euthanizing certain farm animals,” David Tuckwiller, the deputy administrator for the USDA’s Commodity Procurement Program said in announcing the program.
“On the other side, food banks are seeing up to 50 percent increase in participation, but also a reduction in donations,” he added, explaining the dual needs of farmers and people in need of food assistance.
The USDA’s plan, according to Tuckwiller, is to purchase the food from farmers and donate it to food banks. He said he hopes to connect people to the food they need by having food distributors produce grocery packages of fresh produce, dairy items and meats for food banks to give to individuals and families.
USDA will pay farmers and food distributors for the food but wants the distributors to handle getting it to the food banks and for the food banks to decide who receives it, Tuckwiller said.
USDA plans to roll out the program this month, once it awards contracts to participating producers and distributors, according to Tuckwiller.
The program is part of the larger $19 billion Coronavirus Food Assistance Program (CFAP) which U.S. Secretary of Agriculture Sonny Perdue announced in late April.
The first phase of the program will provide $16 billion in direct support based on actual losses for agriculture producers where prices and market supply chains have been impacted and will assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by Covis-19, according to USDA.
Phase two is the $3 billion direct purchase and distribution program. Starting this month USDA says it plans to spend $300 million a month buying fresh produce, dairy products and meat from producers, which will be packaged by the food distributors and distributed by various food banks throughout the country.
The program was put together very fast and many in the agriculture community and in the food industry say they are waiting for more details on how the program will work. In late April there was still much confusion, even at USDA.
The program is needed though because through no fault of their own many growers, dairy farmers and ranchers are hurting because of the economic shutdown.
Frankly, more aid for farmers as well as individuals will probably be required as what is bound to be a severe economic recession starts to set in this month.
Economists are predicting unemployment could hit as high as 25% by this summer. Additionally, the prospect of the foodservice sector coming back to life this year is very dim, according to experts in the field. Schools are to remain closed for the rest of the year as well, eliminating what is a huge market particularly for milk but also for produce and meats.
My analysis is that we’re in what is just the first phase of assistance the federal government is going to have to provide to farmers, as well as to Americans, many of whom are rapidly becoming food insecure.
The Covid-19 pandemic is reminding the public that having an abundance of food isn’t a given as it’s largely been in the past. Shortages on grocery store shelves and higher prices at stores are a reminder that what’s been taken for granted in America for so long, that there will always be an abundance of food available, no longer can be taken for granted.
Like it or not the federal government is going to have to continue to step in economically to assist farmers and the public in this time. Our food supply is both a national security and domestic security priority. As such, farmers and the others who put the food to our tables are, like the government has deemed them, critical and essential. Food sovereignty and food supply must remain at the top of the list of things the federal government ensures remain intact in this time of national crisis. It’s imperative.
