Note that the Farm Service Agency (FSA) received additional funds ($3 million) to cover additional expenses, including for temporary staff and overtime, while the Foreign Agricultural Service (FAS) received additional funds ($4 million) that included expenses for relocating employees and dependents from overseas posts.  Finally, the Office of the Inspector General (OIG) received $750,000 for audits and investigations of the activities carried out and expenditures under this emergency act.

(2) Funding for Direct Assistance

In total, this is the largest portion of the funding provided in the CARES Act to USDA at just over $48.3 billion.  Funds are largely for three different program activities.  The first, illustrated in Figure 2, are the funds for providing direct assistance to producers.  The $23.5 billion includes $9.5 billion to the Secretary of Agriculture to support producers impacted by coronavirus but it specifically mentions “producers of specialty crops, producers that supply local food systems, including farmers markets, restaurants, and schools” as well as “livestock producers, including dairy producers” (Division B, Title I).  The way it is written, it appears unlikely that any of these funds are to be used to support producers of the commodities generally covered in Title I of a farm bill (except dairy).

The second account funded is a $14 billion reimbursement of the net realized losses of the Commodity Credit Corporation (CCC) not previously reimbursed.  This is not a direct appropriation for new spending or the creation of new programs and payments but rather a reimbursement for funds already spent by the CCC.  In general, the CCC Charter Act of 1948 provides authority to USDA to spend funds on a line of credit from the federal treasury; the cap on that line of credit is $30 billion (USDA, CCC Charter Act).  The CCC line of credit is used to make farm program payments, conservation payments (including transfers to NRCS and other agencies), Marketing Assistance Loans and export activities pursuant to programs authorized in the farm bill.  The CCC Charter Act also provides specific authorities for assisting commodities, markets for commodities (domestic and export) and similar efforts.  Notably, it is the specific authorities in section 5 of the Charter Act that were used by USDA to create the Market Facilitation Program (MFP) and provided related trade assistance in 2018 and 2019.  An initial estimate of CCC spending to date compiled from Congressional Budget Office forecasts and the fiscal year 2019 CCC report offers a perspective although not an actual accounting for the line of credit.  It is illustrated in Figure 3.

Based on this estimate, CCC would be expected to spend $29.6 billion of the $30 billion line of credit in FY2020 to cover programs, payments and other obligations already in the budget.  The reimbursement in the CARES Act most likely reimburses spending for the second and third tranches of the 2019 MFP payments (estimated $9.7 billion), the estimated ARC/PLC payments for the 2018 crop made in October 2019 (estimated $2.9 billion) and possibly CRP rental payments (estimated $1.9 billion).  Whether this reimbursement allows for USDA to initiate a new round of commodity program payments to farmers program remains an open question.

The CARES Act also appropriated additional funding to Rural Development agencies.  The Rural Business Program operated by the Rural Business-Cooperative Service received an additional $20.5 million for loans to rural businesses.  The Rural Utilities Service received an additional $25 million for “telemedicine and distance learning services in rural areas”; especially helpful assistance as schools are transitioning to online learning and hospitals in rural areas brace for the need to respond to the pandemic.  Figure 4 illustrates the additional funding for these accounts.

The CARES Act also provides approximately $24.8 billion in additional emergency funds for food assistance.  Child Nutrition Programs received $8.8 billion in additional emergency funds to help with needs due to the pandemic, and the Commodity Assistance Program received $450 million, with $150 million used for costs associated with the distribution of commodities.  Figure 5 illustrates the emergency funding related to food assistance accounts listed in the CARES Act.

The Supplemental Nutrition Assistance Program (SNAP) is also illustrated in Figure 5 with $15.8 billion in additional funds.  Notably, $15.5 billion of that is to be held in a contingency reserve for use if cost or participation exceeds budget estimates.  Also, $100 million is for food distribution on Indian reservations, with $50 million for facility improvements and upgrades, $50 million for food purchases and $200 million for grants to the Commonwealth of the Northern Marian Islands, Puerto Rico and American Samoa for nutrition assistance.

It is the provision for SNAP that draws particular attention.  Recall that SNAP provides direct assistance to individuals and families for the purchase of food with eligibility generally to those who are below 130% of the poverty line.  This is a category of Americans likely to grow substantially in coming months given the extraordinary shock to the economy from the efforts to slow the spread of the coronavirus and flatten the curve (Roberts, March 27, 2020).  For example, the U.S. Labor Department reported that an all-time record 3.3 million Americans applied for unemployment benefits from March 15 to March 21 (Long and Flowers, March 26, 2020).  The Labor Department reported an additional 6.6 million people filed new claims for unemployment this past week (Casselman and Cohen, April 2, 2020).  By comparison, the highest number of unemployment claims during the Great Recession was 665,000 in March 2009 and the previous high was 695,000 in 1982.

SNAP assistance to purchase food is counter-cyclical and is expected to increase spending and participation as more and more people fall below the poverty thresholds for the program.  For a point of reference, SNAP spending increased drastically in the wake of the Great Recession that followed the economic collapse in the fall of 2008.  Figure 6 illustrates SNAP during the Great Recession.  The navy area represents the total costs as reported by USDA-FNS and the gray bars are the total average monthly participation, millions of people receiving benefits (SNAP Data Tables).  Total costs of the SNAP program increased from $37.6 billion in 2008 to $53.6 billion in 2009, peaking at $79.9 billion in 2013.