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By Kam Quarles, CEO, National Potato Council
Writing this column less than a week after the longest government shutdown in history has ended, we are hopeful that Washington, D.C. will now turn itself toward important work and away from gridlock.
One of the most important near-term issues for the Trump Administration and Congress to address is productively responding to a growing economic crisis for American agriculture.
Nearly every commodity produced by our country’s talented farmers and ranchers is suffering from skyrocketing costs of production coupled with anticipated low market prices.
Potatoes are no different. In just the russet category alone, estimates are that grower losses will exceed $480 million for the coming year. Extrapolate this across all the varieties that America’s family potato farms produce, and the scope of the crisis becomes clear.
The good news is that the administration and Congress can help this situation. The better news is that they also know exactly how to deliver relief. Why? Because we tried a program in the past that failed spectacularly, learned from it, and created successor support programs that work.
In 2020, during the height of the COVID crisis, the government demanded that major parts of our economy cease operating. Overnight, hotels, schools, restaurants and many other businesses were told to close their doors. All told, the potato industry lost over 60% of its customers during those COVID shutdowns.
In response, the federal government created a relief program called the Coronavirus Food Assistance Program – or CFAP. This was a direct payment program intended to compensate growers for losses due to the shutdown. The trigger for receiving a payment was that each commodity (not each grower) had to prove to the government that prices had declined.
There was a flaw in this model that caused the program to fail on a grand scale. It assumed that the federal government had pricing data from every commodity. For many of the “program crops,” this was easy because they have a futures market that provides price information on a second-by-second basis.
However, the vast majority of the fruit and vegetable industry lacks those futures markets and has no such data. This caused the federal government to state that the loss of 60% of the potato industry’s customers caused no impact, and therefore, potato growers didn’t qualify for relief.
After many months of front-page articles showing piles of potatoes going to waste, growers suffering tremendous economic peril, and senators and representatives meeting personally with the Secretary of Agriculture, a new program, “CFAP 2,” was rolled out. It discarded the pricing trigger of the failed program and let every grower petition the government themselves. It provided immediate and significant relief to growers while offering the government the same audit power it has with annual tax filings to ensure that the relief was necessary.
Fast forward to this year, and the federal government was again called upon to deliver relief to the specialty crop industry. The new mechanism was built upon the successful COVID program but was updated and called the Marketing Assistance for Specialty Crops (MASC) program. Though it was not easy to get this program released, once the administration finally made it available, it was again a huge success.
Both CFAP 2 and MASC were released under the Trump Administration. Their delivery and execution were widely supported by family farms across the U.S. Given the scope of the current economic crisis, we are strongly urging the administration and Congress to double down on this prior success and execute on programs they know will work for growers.
The great family farmers who make up this industry deserve a federal government that takes decisive action in times of crisis. That kind of effective leadership can restore faltering confidence and propel us forward past this crisis.