January 18, 2021

USDA to pay US$2.3 billion in COVID-19 aid to farmers

The United States Department of Agriculture (USDA) said it will pay a further US$2.3 billion in COVID-19 to farmers, mainly livestock producers affected by COVID-19 related slaughtering disruptions and lower demand from restaurants for meat, Reuters reported.

The latest aid is sourced from allocations to the USDA from previous pandemic stimulus legislation and comes after record subsidies for farmers provided by the US government last year.

87% of the funds will be channelled to swine and poultry farmers under contract to major meatpackers such as Tyson Foods and Smithfield Foods.

The USDA said contract farmers are the most in need of aid after companies cut down on livestock production following temporary shutdowns of slaughterhouses and processing plants last year. The department said farmers either had fewer livestock to raise or were affected by delays in livestock deliveries.

The USDA said contract farmers were also required by food companies to keep livestock on their farms for longer before being shipped to meat plants. This resulted in increased labour and other costs.

Previous USDA aid programmes were not eligible to be channelled towards contract farmers. For this latest aid, the farmers will be able to receive payments if they produced swine or poultry under a contract for the last two years, and reported lower revenue last year compared to 2019.

The department also said it will double payments to non-contract swine farmers from its first COVID-19 aid round, an extra US$17 per head for swine owned between April 16 to May 14, 2020.

- Reuters