Earlier this month, Klobuchar and Smith called on the Administration to make farmers eligible for federal small business supports, now included in most recent package passed unanimously by the Senate

WASHINGTON - U.S. Senators Amy Klobuchar and Tina Smith announced that farmers in Minnesota and across the country are now eligible for additional disaster loan relief under the most recent coronavirus relief package passed unanimously by the Senate. Under a bill passed by the Senate this week, agricultural enterprises will become eligible for the Small Business Administration’s Economic Injury Disaster Loans (EIDL) and Emergency Economic Assistance Grant (EEAG) programs. These key changes will allow farmers to be eligible low-interest loans from the federal government, as well as grants of up to $10,000 to help farmers get through the coronavirus pandemic. 

This important provision for Minnesota farmers follows another key program change Klobuchar and Smith secured earlier this month. In early April, Klobuchar and Smith wrote a letter to the Small Business Administration (SBA) requesting that farmers with operations under 500 employees be eligible for the Payment Protection Program (PPP), a program to provide funding to farmers to keep their employees on payroll and off unemployment during the coronavirus pandemic. Following the senators’ letter, the SBA announced that farms and other agricultural enterprises would be made eligible for that program. 

“The coronavirus pandemic has placed incredible stress on our agriculture community,” Klobuchar said. “I am glad that the package passed by the Senate will make new loans and relief available to our farmers. I will continue working to ensure that all Minnesota small businesses can access much needed relief during this economic recovery and time of uncertainty.”

“This pandemic has devastated thousands of Minnesota farmers and ranchers who have already endured years of low prices, weather disasters and trade disruptions," said Smith. "The latest coronavirus relief package offers them much-needed access to loans and resources that can be critical to getting them through this tough time. As we move forward, I’ll continue to work to ensure our producers get the resources they need."

Full text of the letter sent earlier this month to SBA Administrator Jovita Carranza from Klobuchar and Smith can be found HERE and below:

Dear Administrator Carranza:

We write to express concerns that we have heard from our constituents in Minnesota regarding the eligibility of farmers and rural businesses to access the new Small Business Administration (SBA) loan programs authorized in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. As you implement these important programs, we urge you to take steps to ensure that farmers, rural businesses, and cooperatives will have timely access to this relief.

In enacting the CARES Act, Congress sought to expressly include certain farmers as eligible recipients of Economic Injury Disaster Loans (EIDL), for which they were previously ineligible. We urge you to implement the law in a manner that maximizes farmers’ access to these loans at this critical time.

While Congress chose to make farmers and agricultural entities eligible for forgivable loans under the new Paycheck Protection Program (PPP), we are concerned that they will only be able to obtain limited benefits from this program because many of their enterprises do not pay “wages” in the strict sense. During this time of low commodity prices, volatile markets, and weak export demand, many farmers have had limited income over the past few years and have not paid themselves or others a “wage” apart from provision of shelter and necessities. Following Congress’ intent to provide immediate relief to farmers through PPP, we urge you to allow for the use of alternative measures of compensation for farmers for purposes of identifying the portion of PPP loan proceeds eligible for forgiveness.

Additionally, many farmers and rural businesses have established relationships and are able to access credit through Farm Credit System institutions. Recognizing that many of these institutions were not previously recognized as SBA lenders, we ask that you take these unique factors into consideration and grant these institutions immediate access to the PPP lending portal. Doing so will help to ensure the broadest possible access to the program in rural America.

Agricultural producers and businesses are critical to the continuity of our country’s food supply and their access to needed relief during the COVID-19 pandemic is critical. Rural areas in particular face unique challenges in responding to the health and economic impacts from COVID-19, and many experts believe the consequences of this crisis could hit them particularly hard. In order to alleviate these disproportionate impacts, farmers and rural business must be provided meaningful eligibility for the EIDL and PPP loan programs. 

Sincerely,

Issues