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2020 elections and COVID-19 impacts on ag primary topics for Mid-South Ag/Environmental Law Conference

COVID-19 caused riffs in the agricultural economy, but assistance is available

By Sarah Cato – June 19, 2020

ROUGH WATERS — Every ag sector felt the impact of the pandemic, although some areas of the ag economy have been hit harder than others. Many meat processing facilities were forced to close, lowering prices for producers. Travel almost came to a full stop, which was problematic for the ethanol industry. For crop producers, the reduced demand for ethanol exacerbated the challenges they already faced from trade disputes and weather. (Graphic courtesy USDA.)

Media Contact

Sarah Cato

National Agricultural Law Center
University of Arkansas System Division of Agriculture
870-815-9035 | sscato@uark.edu

FAYETTEVILLE, Ark. — The potential impacts of 2020 elections on agricultural policy, the already felt impacts from the COVID-19 pandemic on the agricultural economy and more were focal points for speakers at this year’s Mid-South Agricultural and Environmental Law Conference. 

The seventh annual conference, usually held at the University of Memphis, was converted to a virtual event as the pandemic closed businesses, prompted self-isolation and the nixed face-to-face interactions. The online event was held on June 4-5.

“With all that’s happened in the last 90 days, I think we could make a good country music song out of this,” Greg Cole, President and chief executive officer of Ag Heritage Farm Credit Services, said regarding the ongoing pain caused by the pandemic.

“It’s what we’re not thinking about that will catch us. I didn’t see this coming,” Cole said. “The COVID-19 impact is unprecedented and it will be felt for many years to come.”

Every ag sector felt the impact of the pandemic, although some areas of the ag economy have been hit harder than others. Many meat processing facilities were forced to close, lowering prices for producers. Travel almost came to a full stop, which was “problematic for the ethanol industry,” Cole said. For crop producers, the reduced demand for ethanol exacerbated the challenges they already faced from trade disputes and weather.

However, government assistance has helped farmers push through the difficult times. The Market Facilitation Program in particular has provided assistance to farmers affected by trade disputes, Cole said.

“The storyline here is really simple: Farm profitability has really been restored through government intervention, not through the actual markets and the prices themselves,” he said. “I would argue that 60-70 percent of our producers would have lost money without government intervention.”

Cole also pointed out two additional positives for the ag economy: low interest rates and high land value.

“Interest rates are the same now as in the ‘50s,” he said. “Where we’re at, we can expect them to stay down.

“Another positive, farmland has high value,” he added. “Even with recent volatility in the equity market, I think investors still view farmland as a good alternative investment. A lot of farmers had a lot of equity in their land, which allowed them to refinance and stay in the game.”

Materials for Cole’s presentation.

Coronavirus Food Assistance Program
Grant Ballard, a partner at Ark Ag Law, PLLC, spoke to attendees on the “Latest and Greatest in Federal Crop Insurance and Farm Programs,” touching on available assistance for farmers through the Coronavirus Food Assistance Program, or CFAP.

“Long story short, the biggest question we’re getting now from our clients is about the CFAP program,” Ballard said. “You all need to tell your clients to sign up for this. It provides direct support to farmers and ranchers who have suffered losses due to price decline, market decline, and negative supply chain impacts.”

“The questions are, who is eligible? The most important thing to relay to your clients is that if they made sales of eligible commodities during the time period provided in the program rules, they’re going to be entitled to a payment,” he said.

The CFAP assistance is limited to $250,000, although there are options to seek partnerships if businesses can document that members, stockholders or partners independently provided up to 400 hours of labor or management. In addition, Joint Operations and General Partnerships are not subject to the $250,000.00 limitation, Ballard said.

“So that’s something to think about,” he said. “If your cattle operation is an LLC, if you have enough cattle, made enough sales and have enough livestock on hand, you may be entitled to more than $250,000.”

Details on CFAP, eligible commodities and more can be found at farmers.gov/cfap.

2020 elections and the future of Farm Bills
Autumn Veazey Price, director of government relations for Land O’Lakes, Inc., provided insight from Washington, D.C., on COVID-19 assistance packages for farmers. 

“The coronavirus pandemic’s impact on commodity markets was dramatic, with drastic volatility on price and access and record low farm income,” Price said. “We are asking Congress to address these issues now and move to help farmers stay afloat. We can’t wait for the next Farm Bill. 

“Because the landscape has shifted so dramatically in the past three months, we don’t yet know what will be a priority when we take up the next Farm Bill,” she said. “We have experienced dramatic volatility in the sector, and as a result, Congress has responded with economic relief programs, like the Paycheck Protection Program and the CFAP program. These programs are starting to refuel the rural economy by providing farmers and families with resources to make it through these tough times.” 

Price said that the pandemic has brought to light issues that need to be addressed in a future Farm Bill, adding that these issues, paired with the response to the pandemic’s already felt impacts, could affect what a future Farm Bill may look like. 

“We view repositioning and rebuilding the rural economy as a top priority. We need things like digital connectivity that will allow us to work, learn, take care of ourselves remotely,” she said. “We need access to skilled, reliable labor. We need new ways to improve environmental health on our farms, like incentives for farmers to adopt conservation practices and credit for the positive impact they create.  These are just a few of the issues that need to be addressed. Which issues need to be tackled in the Farm Bill will depend on what gets done over the next 12-18 months.”

The conference also featured presentations on ag bankruptcy, a discussion of a landmark wetlands determination dispute, as well as an hour devoted to discussing legal ethics in dealing with the government.

Find the Full Agenda, as well as conference materials.

Available net proceeds from the conference will be used to help support an agricultural law research fellowship created to honor the legacy of Scott E. Fancher. Visit the Fancher Fellowship to learn more.

For more information, visit the National Agricultural Law Center or follow @Nataglaw on Twitter.

About the National Agricultural Law Center

The National Agricultural Law Center serves as the nation’s leading source of agricultural and food law research and information. The Center works with producers, state and federal policymakers, Congressional staffers, attorneys, land grant universities, and many others to provide objective, nonpartisan agricultural and food law research and information to the nation’s agricultural community.

The Center is a unit of the University of Arkansas System Division of Agriculture and works in close partnership with the USDA Agricultural Research Service, National Agricultural Library.

To learn more about the Division of Agriculture Research, visit the Arkansas Agricultural Experiment Station website. Follow us on Twitter at @ArkAgResearch and Instagram at ArkAgResearch.

 

About the Division of Agriculture

The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land grant education system.

The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on five system campuses.

The University of Arkansas System Division of Agriculture offers all its Extension and Research programs and services without regard to race, color, sex, gender identity, sexual orientation, national origin, religion, age, disability, marital or veteran status, genetic information, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.

Media Contact

Sarah Cato

National Agricultural Law Center
University of Arkansas System Division of Agriculture
870-815-9035 | sscato@uark.edu