For the first time in the 240-year history of the U.S., the government has shut down the economy due to a pandemic. Because of this, U.S. Sen. Chuck Grassley (R-Iowa) said the government needs to put some thought into what that means and analyze how relief aid packages are being used in our country.
“We need to analyze whether or not the economy is going to turn around,” Grassley said. “We might need less aid. When you put $3 trillion out there, you need to see how it's being used before you go further.”
Grassley joined Agritalk Host Chip Flory on Monday to discuss proposed aid packages. He said $150 billion has already been distributed to the states and we need to know how far that money has gone first.
“It’s been liberalized what the money can be used for beyond just helping to fight the pandemic – fire, police, even depopulating pigs, if that's necessary,” Grassley said. “There's a lot of flexibility there that wasn't originally there for states to use the money for.”
He said the U.S. hastily put together almost $3 trillion of borrowed money to get the economy up and running again.
“We didn't have time to give a lot of thought to that. So, the taxpayers expect us to give more thought to the next time we're acting,” he said.
Support for depopulation
Flory asked if FEMA might be able to provide aid to compensate farmers who have had to depopulate herds.
“The Families First Coronavirus Response (CARES) Act has $24 billion, of which they selected $19 billion to be spent on animals, specialty crops and regular grains. That money was anticipated because of low prices because of the pandemic, but there was never any thought that we were going to shut down half of our slaughtering operations capability,” he said. “That was just for low prices, not for depopulation.”
He believes there may be more FEMA money that could be used, and maybe some CCC money, that could be used help compensate farmers.
Grassley and 13 other senators sent a letter to Congress requesting additional funding for farmers. Grassley said this may come up during the discussion of phase four of the Coronavirus Farm Assistance Program (CFAP).
“Working with the Iowa and Nebraska cattlemen, we're going to put in a bill that at least 50% of the slaughter of cows needs to be done by independent negotiations between a willing buyer and a willing seller, as opposed to what we're up against now, where let's say 80% of the market is contracted and there's only about 20% out there for the independent producer. We need more of a market for the independent producer that we don't have today,” he said.
Flory asked about the ability of packers to change contracts with independent producers, whether it be cattle or hog producers.
“This is going to kill some guys. Senator, it's going to put guys out of business,” Flory said.
Grassley said he has sympathy for the people who are hurt by this. “Even though it might be legal for them to do this, you would think these big companies would have a moral and ethical obligation to abide by these contracts. I've heard of one or two instances where these people have said they're going to keep their word,” Grassley said.
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