Ag Policy Blog

Perhaps someone needs to step in and mediate some of the relationship issues between the state of Iowa and the U.S. Department of Agriculture right now.

Maybe there are some underlying issues that haven't been aired, but families with low-income children lost out on Electronic Benefits Transfer (EBT) this summer while farmers hit hard by weather disasters are losing out as well.

And both situations seem -- on the surface anyway -- to be about policymakers digging in and doubling down on their stances rather than choosing options that offer a little more support to people who could use it.

The summer food program issue began last year and continues to reverberate. Iowa opted not to participate in the Summer EBT program, or SUN Bucks as USDA calls it. This would have offered $40 worth of food per child per month over the summer months for those who qualify for free or reduced lunches at schools. Thirty-seven states participated in the program, but 13 others chose not to enroll their students. As a result, lower-income Iowa families missed out on about $29 million in benefits.

Iowa Gov. Kim Reynolds instead set up a $900,000 program to offer lunches at schools, but not every district participated in it. She came back this month with a counteroffer to USDA seeking a waiver to expand summer lunch sites instead of providing the $40 benefit, arguing it would be healthier to provide the lunches than to let people potentially buy junk food.

USDA rejected Iowa's waiver request but also jabbed at Reynolds in the process. A USDA spokesperson stated, according to Iowa reports, "Through this waiver request, the governor is asserting that the State knows better than its own families do about what their needs are."

The situation over plans to help feed kids has now devolved into a standoff between two government agencies.

And then we get to disaster loans.

On Wednesday, the Des Moines Register reported about conflicts between USDA and Iowa over disaster loans for farmers. Iowa has been hit by a series of devastating tornadoes and floods this year. While the Small Business Administration offers zero-interest loans for small businesses affected by disasters, farmers are not offered the same terms on interest from the Farm Service Agency. During the pandemic, Congress required SBA to temporarily suspend its rules to allow farmers to apply for a couple of specific loan programs, but those programs have gone away.

USDA offers low-interest loans to producers during disasters, but there are caveats. The interest rates are around 3.75%, and producers can only get those loans if they don't receive loan approval from their local banks or Farm Credit lenders.

It's obviously frustrating for farmers that a local business hit by a storm can get a zero-percent loan to get back on its feet, while a local bank might be requiring farmers to pay 7%-8% interest for the same kind of support.

And this situation likely affects farmers in disasters around the country, not just in Iowa.

Reynolds and Iowa's congressional delegation, all Republicans, accused USDA Secretary Tom Vilsack, a Democrat and former Iowa governor, of refusing to use his power to give farmers zero-interest loans, the Register reported. USDA countered that Congress did not give the department the ability to offer those loans. The Register added, USDA said it sought "additional flexibilities for producers in need of emergency loan assistance, but Congress chose not to provide them."

Vilsack might have options to use the Commodity Credit Corporation (CCC), but Republicans in Congress have been accusing him of using the CCC frivolously and are pushing to restrict his authority. At some point, Congress also may need to pass a broader disaster package that would include agriculture. After all, FEMA has basically run out of disaster money this year.

These political disputes between Iowa officials and USDA aren't helping anyone. Farmers are trying to recover from disasters, and parents of Iowa children lost out on food benefits. Maybe both sides need to find a way to play nice in the sandbox.

Des Moines Register article: https://www.desmoinesregister.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

(c) Copyright 2024 DTN, LLC. All rights reserved.