Federal government to buy supply from farmers, distribute surplus to food banks

The federal government will start buying meat, vegetables and milk from the nation’s farmers and distribute the surplus to the nation’s food banks, Agriculture Secretary Sonny Perdue said Thursday, a plan welcomed by the agricultural sector.

While the details and the amount of money that will be spent on the program were not clear, Mr. Perdue said President Trump has approved the plan to help the nation’s farmers during the coronavirus outbreak.

“Yes — that’s directly we’ll take dairy products,” Mr. Perdue said. “We’ll take meat, protein products, both beef and pork off the their produce as well. Many of this food that’s being that does not have a home in a market for it, USDA will have a program that will procure this food and distribute it to food banks and other nonprofit charities.”

Mr. Perdue hinted at such a program in an April 9 tweet, but in an appearance Thursday on Fox Business Network’s “Mornings with Maria,” the secretary told host Maria Bartiromo the problem lies not with supply but with the supply chain.

“We’re doing our best to relocate that adequate supply into the demand channels that can process it for consumer needs, but as you can imagine it’s like flowing down an interstate and things are going well at 60, 65 miles an hour and you have a crash and it all backs up, and there’s dual lanes, and we’re trying to relocate a dislocated supply-demand system from one to the other,” he said.

No timetable for the program was announced.

“We hope to release that very soon,” he said. “We spoke to the president yesterday about that, and we hope to have it out, announced very quickly. There will be direct payments both to our specialty crops, both to our dairy, to our livestock, cattle, cow, calf, hogs, and others, and commodities as well that have suffered from this.”

During the Great Depression, the federal government moved aggressively to prop up farmers in late 1933 with the Agricultural Adjustment Act, New Deal legislation that created a bureau that would buy food and livestock surpluses to get money to farmers and to stabilize markets.

A program along those lines is needed immediately, argued Obama administration agriculture secretary Tom Vilsack.

“Now is the time to see the tools and resources we have creatively used to bring those folks who are not working today back on the job at their production facilities, to create additional market opportunities for our producers and stabilize prices for them,” he said in a Zoom conference organized Thursday by Focus on Rural America.

Mr. Perdue said the administration plans an initial relief package for the agricultural sector that probably will cost $16-$18 billion, an amount that is short of the $25 billion deal the Trump administration reached this week with the airline industry. However, he said he anticipates another round of support for agriculture in the near future.

The agriculture sector was already reeling from the trade war with China that had severly crimped exports when the coronavirus broke out and quickly spread around the world, said Dale Moore, the executive vice president of the American Farm Bureau Federation.

“The law gives the secretary the power to ‘restore producers’ purchasing power,’ and that has always been interpreted as giving him some discretionary power over what are known as Section 32 programs,” Mr. Moore said.

Smithfield Foods, one of the nation’s top pork producers, has been bedeviled by coronavirus outbreaks among workers at some of its processing plants in the Midwest and is coping with reduced demand as a result of restaurant, hotel and catering shutdowns.

“In this country, they are under heavy duress, and they have — they have gone through a period here of about two years where whether it was the trade disruptions and now this COVID-19 where every restaurant in the country just about has been closed,” Smithfield CEO Ken Sullivan told Ms. Bartiromo. “They’re under heavy duress and they need government support.”

Mr. Moore said he had not discussed plans with the administration, but that the Farm Bureau has been working with Feeding America, a national network of food banks, on the details of how a federal purchasing program would work.

The nation’s food bank system lacks the storage capacity necessary to absorb a huge amount of perishable goods, but the Farm Bureau says the supply networks that the restaurant business uses should be easily converted for Mr. Perdue’s plans.

“Obviously there are a lot of demands,” Mr. Vilsack said.

“But when you shut down the schools, when you shut down the universities, when you shut the restaurants down, you shut the fast food industry down, you are essentially disrupting perhaps as much as 50% of the domestic market that normally exists,” he said, largely in reference to dairy farmers. “We do have an adequate supply — we just have to make sure the supply gets connected with the demand.”