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Are farms small businesses? Do they qualify for assistance?

Source: Wikimedia Commons

COVID-19 has affected us all in one way or another. Farmers are experiencing a collapse of market prices not seen in some time. This is not just in one commodity or another, it is across the board. The Coronavirus Aid, Relief, and Economic Security (CARES) Act is supposed to make funds available to help small businesses and people through this challenging economic time. However, the Small Business Administration (SBA) is saying that farm operations are not small businesses and have no access to the money made available.

American Farm Bureau Federation (AFBF) President Zippy Duvall says the losses to the agriculture industry are alarming as schools, restaurants, bars, hotels, amusement parks, ballparks, and other public places remain closed during this pandemic.

These numbers are on top of an already 24 percent decline in farm incomes from just six years ago. The AFBF has been trying to get “legal clarity” from the SBA on the eligibility of small farms. The SBA has a published notice on their website that specifically states that farms and ranches are not eligible for any share of the billions of dollars that are available to small business owners. President Duvall argues that farms fit every criterion of a small business in the CARES Act.

The SBA interim rule says that small businesses must certify they are not “an agricultural enterprise.” However, there is an exception for coops, nurseries, and aquaculture operations. AFBF has joined 30 other Ag organizations in asking the SBA to ensure small farms and ranches can qualify. House Financial Services Republican Patrick Henry says the help is coming as fast as possible.

AFBF is not advising farmers to apply for the SBA loans until they can make sure they are eligible to do so.