In a letter to Secretary of Agriculture Sonny Perdue at the U.S. Department of Agriculture (USDA), United Fresh Produce Association President and CEO Tom Stenzel has requested urgent government action to mitigate the enormous challenges facing its more than 1,500 member companies that make up the fresh produce supply chain, as a result of the coronavirus (COVID-19) outbreak. Its members include growers, shippers, fresh-cut processors, wholesalers, distributors, retailers, foodservice operators, industry suppliers and allied associations
“This outbreak has had a seismic impact throughout the produce supply chain and is causing extreme uncertainty in the industry,” Stenzel wrote. Everyone from distributors serving schools and restaurants to growers who provide product to these distributors are being impacted by lack of payments from their customers, he said.
After conducting a “thorough analysis of the current situation,” Washington, D.C.-based United Fresh is recommending the USDA implement both a Produce Supply Chain Stabilization Program and a Grower-Shipper Market Stabilization Program to address the COVID-19 crisis.
Seven Key Points of the Produce Supply Chain Program:
- Over the next 30 days, implement expedited approval process for new USDA Food Vendor Program applicants whose primary business include restaurants, hotels, schools and universities. After 12 months, those companies that were approved under the expedited process and wish to continue being an approved USDA food vendor must reapply through the normal USDA vendor application process.
- Foodservice distributors who qualify under an expedited vendor approval process would be eligible to distribute current inventories immediately through federal feeding programs. While some are redirecting current supplies to retail channels, most inventory awaits a customer.
- Make Department of Defense (DOD) Fresh distribution available to all federal feeding programs, including The Emergency Food Assistance Program, National School Lunch and Breakfast Program and Summer Feeding, and Child and Adult Food Program.
- Have the USDA and DOD immediately make an additional $1 billion available under DOD Fresh and USDA Vendor Program to help meet the needs of schools, food banks and all emergency feeding sites that are experiencing increased demand. Establish broad temporary flexibilities allowing federal feeding programs to procure commodities from all available geographic sources.
- Allow schools to convert Fresh Fruit and Vegetable Program (FFVP) funding into flexible fresh produce purchasing, including but not limited to prepacked boxes of fresh produce for families to last multiple days consistent with their current meal service.
- Increase the Cash Value Voucher (CVV) for the Supplemental Program for Women, Infants and Children (WIC) from $9 for children and $11 for women to $15 for all participants, to provide flexibility for WIC participants to purchase a more realistic supply of fresh produce for their families, while supporting farmers.
- Offer food distribution businesses a USDA-backed loan program that addresses the variety of difficulties these businesses currently face, from making loan payments on existing debt to paying employees and vendors and paying rents, mortgages and other operating expenses.
Four Key Points of the Grower-Shipper Market Stabilization Program:
“Because of current supply chain disruptions, food distributors in the fresh produce distribution chain who serve restaurants [are] at a standstill,” Stenzel wrote. “Basically, with the closure of restaurants, hotels, and other eating establishments, foodservice distributors are not being paid for product delivered to their operations. That, in turn, impacts growers who provide commodities to these entities and are not being paid by their vendors.”
- As the current situation could result in significant Perishable Agricultural Commodities Act (PACA) claims, United Fresh requests that the USDA PACA Division consider posting information to the industry about their rights and responsibilities under PACA and where there can be flexibility in extending payment terms without losing their PACA Trust rights.
- Establish a $1 billion fund that would be used to address claims filed by foodservice distributors who have outstanding expenditures to grower-shippers. Based on submission and verification of these claims, the fund would allow the USDA to reimburse grower-shippers directly based on these approved claims.
- The USDA should include $100 million in funding for State Departments of Agriculture that could be facilitated through the Specialty Crop State Block Grant Program, and which could assist growers facing unexpected conditions due to the COVID-19 pandemic.
- Establish a USDA Pilot Crop Insurance Program to protect growers in the event of a food safety, government quarantine or business disruption such as a pandemic.