Farmers who say they’re not getting needed assistance from federal coronavirus relief are looking to Congress to change an oversight keeping them from accessing help from the Small Business Administration.
Eighty-six members of Congress wrote to SBA administrator Jovita Carranza on Thursday asking for “immediate attention and swift action” to ensure that farms receive the economic relief they need through the CARES Act, a law passed in March to ease unprecedented pressure placed on the economy during the coronavirus outbreak.
The law should apply to legal hemp producers just as it does any other farmers. But the entire farm sector says that SBA paperwork excludes them.
“Now more than ever we must provide our farmers and rural communities with federal assistance needed to combat this pandemic and not turn our backs on these communities.”
Several days after Congress members sent the letter, though, the SBA had yet to issue any clarity. Farmers including legal hemp producers say they are ineligible for the emergency economic injury grant program available to other small businesses.
The issue comes under the Coronavirus Funding Options section of the SBA website, where applicants must certify that they are “not an agricultural enterprise (e.g. farm), other than an aquaculture enterprise, agricultural cooperative or nursery.”
However, the CARES Act doesn’t exclude agricultural producers and says all businesses with fewer than 500 employees can participate in the program.
The American Farm Bureau Federation and 30 other agriculture commodity and specialty agriculture organizations have joined the effort, calling on the SBA to include agricultural businesses in the program called the Economic Injury Disaster Loan Program.
Farmers need relief, too
In addition to traditional SBA funding programs, the CARES Act established temporary programs to address the COVID-19 outbreak, including:
- Paycheck Protection Program, which provides loan forgiveness for retaining employees by temporarily expanding traditional SBA loan programs.
- Emergency Injury Disaster Loan (EIDL) advance, which provides up to $10,000 of economic relief grants to businesses that are currently experiencing temporary difficulties.
- SBA Express Bridge Loans, which enable small businesses that currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.
- SBA Debt Relief, which provides financial reprieve, such as paying the principal interest for SBA loans and microloans, small businesses during the COVID-19 pandemic.
Further, the EIDL program can provide up to $2 million to small businesses and nonprofits that suffer economic injury because of a declared disaster.
According to the SBA, an EIDL loan can help businesses meet financial obligations, providing a buffer from economic injury caused directly by the disaster. The loan does not replace lost sales or revenue.
COVID creates exceptions
It’s not unusual that the SBA excluded farms from the coronavirus relief emergency loan package, as farmers are typically included in – and expected to apply for – any available U.S. Department of Agriculture disaster funding, according to Herrick Fox, co-owner of Meristem Farms in Vermont.
But he told Hemp Industry Daily that CARES Act funding did not follow traditional channels.
“In the case of the coronavirus, there appears to be no disaster declaration by the secretary of agriculture, or other agriculture-specific disaster funding authorized by the CARES Act, so Congress is working to clarify to SBA its apparent intent that farms should be included in the EIDL offered through SBA in this case,” Fox said.
The USDA’s Commodity Credit Corp. money, he said, “is apparently not being administered as disaster funding.”
Questions remain as to the potential eligibility of hemp farms to access the stimulus funding allocated to the CARES Act specifically to the USDA, according to Fox.
Laura Drotleff can be reached at [email protected]