NPC Coronavirus Report – 03/31/20 Update

Stimulus Bill

Last week, Congress has passed a $2.2 trillion “Phase 3” stimulus bill that includes funding for agriculture. In particular, $9.5 billion is targeted for specialty crops, livestock and other impacted commodities.

Yesterday, NPC joined with 74 other specialty crop associations on a letter to Secretary Perdue that seeks to prioritize our industry in the use of these funds. In particular, it highlights the following items:

• Relief for PACA-covered and other contractual obligations that cannot be completed due to the crisis;
• Fruit and vegetable purchases for federal feeding programs to create demand lost due to the food service collapse; and
• International programs to provide relief for lost export markets.

Additionally, the Phase 3 bill includes the Small Business Administration (SBA) “Paycheck Protection Program,” which extends new relief through SBA’s 7(a) lending program. The new law permits eligible entities to borrow up to 2.5 times its monthly payroll. The loan, which would be issued by a SBA-approved lender, has a 100 percent federal guarantee. To gain access to these resources, entities of 500 employees or fewer primarily need to prove they existed and had employees as of February 2020. The federal government would pay the lender to defer all payments on the loan for up to six months. Any organization that sustains full time employment levels over the course of the coronavirus crisis could receive up to eight weeks of salary, wages, rent, and other operating expenses fully forgiven, converting a substantial share of the loan into a grant. For more information, click here.

The U.S. Chamber of Commerce has compiled a helpful overview and checklist for these loans entitled, “Coronavirus Emergency Loans: Small Business Guide and Checklist” that explains which companies are eligible for these new loans, what lenders will be looking for from your organization, how much you can borrow, how to have the loan forgiven, etc.

FDA Labeling Relief for Food Service Packaged Products

In order to assist organizations that have lost markets due to the food service channel shutdown, the Food and Drug Administration has provided labeling flexibility to allow the movement of product packaged for food service to move into the retail channel. Previously, regulatory requirements for the nutrition facts panel and other federal mandates hindered or prevented food service packaged items to be sold at retail.

FMCSA Hours-of-Service Relief

The Federal Motor Carrier Safety Administration (FMCSA) has clarified that federal Hours-of-Service flexibility has been provided to truck operators who are carrying food supplies AND also the “precursor products” to create those supplies, such as raw products as well as inputs to grow or produce those food supplies. Previously, the precursor products were not explicitly covered.

The original fact sheet can be found here and the updated FAQs can be found here.

Potato Industry Impacts

In the near term, the potato industry is working to quantify the overall economic impact of this crisis. It will be extremely important that we provide a reliable, defensible estimate to USDA and Capitol Hill in order to facilitate their stimulus and safety net efforts. Please work with your state associations in assisting them with coming up with these estimates.