Farmers skeptical that federal loans will have much impact

In this Jan. 9, 2020, file photo, Michael Kovach checks on cattle at his 107-acre farm in South Pymatuning Township.

HARRISBURG — Even as homebound Pennsylvanians hit the grocery stores to stock up, the state’s small farmers are not being helped much and are struggling financially, said Michael Kovach, a Mercer County farmer.

Those struggling farmers also may not have access to accountants to help them figure out whether or how to qualify for the federal loans, said Kovach, who is vice president of the Pennsylvania Farmers Union.

Larger agri-businesses “have legal staffs,” he said. “A small farmer out in the boondocks doesn’t know what to do.”

Any small farmer, who wanted to explore the possibility of landing funding, would probably too busy operating their farms to invest the time and energy in trying to apply for the assistance now, Kovach said.

Tim Lesher, a former president of the Northumberland County Farm Bureau, said that the devastating impact of the pandemic economic crisis is going to linger and he’s not convinced that federal assistance is going to help in the long-run.

“It’s a temporary Band-aid,” he said.

The upheaval in the meat supply chain is so bad that in recent weeks, people taking hogs to animal markets were told not to bother trying to sell the livestock because with the meat plants closed, there were no buyers.

The problems faced by livestock farmers will trickle down to grain farmers, he said.

“It’s going to have a long-lasting effect,” he said.

The most recent round of applications for the Economic Injury Disaster Loan, which opened on Monday, targets agriculture. Farms hadn’t previously been allowed to apply for Economic Injury Disaster Loans, but the last round of federal coronavirus stimulus legislation opened the door for farmers.

The Emergency Injury Disaster Loan programs provides small businesses with working capital loans up to $2 million, and emergency grants up to $10,000 to help overcome economic injury as a result of COVID-19.

Farmers were also allowed to apply for help through the Paycheck Protection Program, created as part of the stimulus to help businesses keep paying their payroll and other bills, despite the pandemic.

Both programs are aimed at small businesses, but the Paycheck Protection Program, in particular, has come under scrutiny, because larger corporations were able to access the program while truly small businesses were often shut out.

The only hopeful sign is that public attention is being focused on the need to try to get the small business assistance to the actual small farmers the aid is supposed to help, he said.

“It’s encouraging to me that this being discussed more widely,” Kovach said.

Kovach said farm organizations have been working to get information to farmers to help them navigate the federal loans.

Aaron Shier, a lobbyist for the National Farmers Union, said that the reports coming back from state officials indicate that farmers have been able to apply for the Economic Injury Disaster Loans. It’s too soon to know how many of the farmers will get grants or loans through the program, he said.

One of the reasons that businesses, such as restaurant chains, were able to tap into Paycheck Protection Program funds was that they were apparently able to qualify by applying for funds for individual business locations. With the move to offer a portion of the Economic Injury Disaster Loan targeted to agriculture, there may not be similar problems with that program, Shier said.

Kovach, an organic direct-sale farmer, said his bigger challenge has been that he can’t generate quickly increase the supply of meat he’s producing to meet demand.

Consolidation within the meat industry funnels almost all of the nation’s meat through a handful of companies. As a result, it caused massive disruptions when their plants got hit by coronavirus outbreaks,

“We had a lot of eggs in a few baskets,” he said.

As a result, other farmers having the opposite problem, as their stuck with milk or animals that are ready for slaughter but the processing plants aren’t able to take their product.

For farmers raising livestock, “that’s a double-whammy,” said Liam Migdail, a spokesman for the Pennsylvania Farm Bureau.

The farmer’s not getting money for selling the livestock, and he or she is also stuck continuing to feed the animals. To make matter worse, the livestock may command lower prices when they do go to market because their older than they would normally be when they’re shipped off the farm, he said.

“When you talk about all of the occupations involved in agriculture – whether its someone raising a crop or livestock, the processors or truck drivers at every stage of the chain – it can create serious problems when an interruption occurs,” said Somerset County Farm Bureau president Dennis Hutchison.

Migdail said that while these loan programs might help some farms, the more broad impact is likely to come from the $16 billion in relief included in the coronavirus stimulus package aimed directly at compensating farmers for economic losses tied to the pandemic.

In addition, the USDA is planning to spend another $3 billion to buy food products from businesses that normally serve the restaurant industry and redirect the food to food banks.

“It’s not going to make farmers whole,” he said. “But that’s primarily where we will see the most benefit.”

David Hurst from the Johnstown Tribune-Democrat contributed to this article.

CNHI PA State Reporter

CNHI State Reporter John Finnerty covers the Pennsylvania Statehouse for CNHI's newspapers and websites. Follow him on Twitter @cnhipa. Email him at

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