US Potato Industry Seeks Fair Relief
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.
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 USD4bn 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.
Potato groups 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.”
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.”