As Coronavirus Ravages Businesses, Small Farms and Independent Restaurants Rally for Economic Relief
This piece was originally published on the Civil Eats website on March 24, 2020. Civil Eats is a daily news source for critical thought about the American food system, sustainable agriculture, and the shift to economically and socially just communities. The featured photo for this article is CC-licensed by Tim Dennell.
BY LISA HELD
March 27, 2020 update: The U.S. House of Representative overwhelmingly passed a $2.2 trillion coronavirus recovery and stimulus bill today, sending it to President Trump’s desk, where he is expected to sign it.
On March 19, Jill Tyler, the co-owner of popular Washington, D.C. restaurants Tail Up Goat and Reveler’s Hour, posted an emotional video to Instagram. Her exhaustion—after weeks of uncertainty, scrambling to implement delivery options, and letting employees go—was apparent.
With her businesses completely shut down, Tyler pleaded with viewers to demand that their legislators raise unemployment benefits for millions of laid-off hospitality workers and that government relief packages offer ways for small businesses to have access to that relief. “Without it, the future of small businesses looks very different,” she said. “Without help, we will not all be able to come back.”
Tyler tagged her video with #toosmalltofail, a hashtag that has been used more than 7,000 times on Instagram and is part of a growing online political movement calling for federal assistance for independent restaurants in the wake of the coronavirus pandemic. At the same time, organizing has also sprung up to advocate for government relief for small farms—many of which depend on now-shuttered restaurants and farmers’ markets, some of which are closing, to sell their fresh produce and pastured meats.
With most of the country staying home, American food purchasing has significantly shifted from restaurants to grocery stores and the larger growers and food manufacturers that typically supply them. The National Restaurant Association predicts restaurant sales will decline by $225 billion over the next three months, leading to a loss of 5 to 7 million jobs.
Meanwhile, an analysis of the impacts of COVID-19 on farms that sell into local markets predicts a $689 million decline in sales from March to May 2020, leading to a payroll decline of up to $103 million and a total loss to the economy of up to $1.3 billion.
Individuals, businesses, and nonprofits have launched numerous efforts to raise funds for impacted workers, restaurants, and farmers—but advocates say real, lasting relief will only come from bold government action.
“What we’re seeing right now is community leaders coming in and filling that gap [left by ineffective government leadership],” said chef and restaurateur Tom Colicchio on CNN; he has so far laid off 300 workers and also helped create the Independent Restaurant Coalition (IRC), a collaboration with chefs across the country aimed at rallying relief for small restaurants. He wrote on Twitter, “This is not the time for a tip cup. Massive government intervention is needed. (Disclosure: Colicchio serves on Civil Eats’ advisory board.)
However, with Congress battling over the next economic relief package, interventions that restaurateurs and farmers are calling for remain uncertain, and large questions remain about what relief will actually end up getting signed into law—and who it will benefit.
On the farming front, the National Sustainable Agriculture Coalition (NSAC) and its many member groups are leading a charge to call attention to the impact of the pandemic on small farms. The organization asked a team of regional food-system experts, including university researchers and former U.S. Department of Agriculture (USDA) employees, to run the numbers and get a sense of the impacts ahead. .
Dawn Thilmany, a professor at Colorado State University and the president-elect of the Agricultural & Applied Economics Association, was part of that team, and she said they had access to a wealth of reliable data on farmers selling into local markets from the USDA Agricultural Census and food hub surveys conducted by Michigan State University.
They identified a $689 million decline in sales over three months based on projections of losses from farm-to-school sales, food hubs that aggregate food from small farms to sell to restaurants and other institutions, and shuttered farmers’ markets. The larger economic loss of $1.32 billion came from estimating how those financial losses would trickle outward, especially given the fact that data shows small farms tend to spend more of their money locally, so losses impact the U.S. and regional economies more acutely.
“[It’s a combination of] how farmers spend their money, what sales were lost, and how that would reverberate through the economy,” Thilmany explained. “It’s like a jigsaw puzzle. We just kept finding other pieces to connect the dots.”
Thilmany said that if trends continue, small producers in local markets will likely face much bigger impacts than larger-scale commodity farmers that sell into national and international markets. And while commodity growers may be impacted by disruptions in international trade, Thilmany and others noted that those farmers had already benefited from Trump’s massive trade bailout program in 2019.
Representative Chellie Pingree (D-Maine) made note of that fact in a letter sent to Speaker Nancy Pelosi (D-California) last week, asking for emergency disaster payments and other aid for small farms.
“The Administration has provided more than $23 billion to farmers since 2018 for the loss of export markets. Some districts, including my own, did not benefit from trade mitigation payments because it is more common for farmers to sell products through local and regional markets,” she wrote. “I hope that as farmers lose local and regional markets due to the COVID-19 pandemic, we will make sure that these farmers…are also supported.”
NSAC is calling for emergency payments to farmers who have lost income as well as expanded access to credit for farmers. The Farmers Market Coalition, a nonprofit that supports local markets across the country, is also pushing for those payments and is asking for a federal declaration that farmers’ markets across the country be allowed to continue to operate as essential services, regardless of local shelter-in-place orders.
Executive Director Ben Feldman said Congress or the Trump administration should introduce new flexibility into programs that support small farms, like the Value-Added Producer Grants and the Farmers’ Market and Local Food Promotion programs, by removing matching fund requirements, extending deadlines, and expediting the review and approval of applications that have already been filed.
“There’s so much uncertainty for [farmers] right now,” he said. “So the idea that they’re going to be able to plan for these grants at the same time that they’re having to reorganize their whole business in order to even sell their products…it’s just too much for them to think about.”
Many similar requests to support farmers selling into local markets have been included in a draft of policy demands compiled by a new coalition advocating for rural America in the wake of COVID-19. Made up of groups including Farm Aid, the Heal Food Alliance, and former staffers from Senator Elizabeth Warren’s (D-Massachusetts) presidential campaign, the groups’ demands include credit and debt relief for farmers and access to emergency grants and loans.
All of this action led to a sense of growing momentum last week, and in addition to Rep. Pingree’s letter, other members of the House indicated support for local farm relief efforts.
However, the most recent draft of the Senate economic relief package did not include any of the provisions for small farms that advocates had hoped for. In fact, Politico reported that one draft raised the annual borrowing limit for USDA’s Commodity Credit Corporation, the agency that facilitated President Trump’s farm bailout program, potentially indicating more economic relief would flow to commodity farmers rather than specialty growers in local markets.
The House version of the bill, introduced on March 23, does not include direct payments for small farms, either, but it does specifically name “family farm” as a type of small business eligible for emergency loans and loan forgiveness. It also includes one program advocates hoped for: It gives the USDA $300 million to purchase agricultural products that were intended for sale into foodservice before COVID-19 wiped out the market and to donate those products to food assistance programs; $150 million is designated for purchasing specialty crops.
A similar tension exists in the restaurant world. While chefs and workers were already speaking out about their dire financial situations weeks before, their political movement gained momentum after high-profile chefs sounded an alarm on social media about a White House call with representatives from the industry. All of the participants on the call represented large corporate chains, such as Domino’s Pizza, Chick-fil-A, and McDonald’s.
“Not even Danny Meyer was on that call,” said Katherine Miller, Vice President of Impact at the James Beard Foundation (JBF), referring to a high-profile restaurant CEO who might have been seen as bridging the gap: Meyer now runs Shake Shack, a national fast food chain, but also owns restaurants many would consider to be neighborhood institutions. “There was a real sense from the smaller restaurant community, like, ‘Oh wait, are we going to be represented?’”
Eater, the national dining publication that has also been covering COVID-19’s impact on the industry closely, encouraged readers to call their representatives and offered a sample script. “Do not let a bailout happen that only lets giant fast-food companies survive,” the site’s restaurant editor wrote. “McDonald’s has deep pockets. Your favorite neighborhood restaurant doesn’t.”
JBF surveyed restaurants beginning last week, and quickly landed 1,500 responses from independent restaurants. The results suggest that 75 percent of restaurants that had been forced to close would not be able to reopen if the shutdown lasted two months. Restaurateurs also reported they had already let 78 percent of their hourly workers and 58 percent of their salaried employees go.
In light of those statistics, JBF began ramping up both its philanthropy and policy activities, Miller said. On the advocacy side, it helped organize online efforts that chefs across the country had already initiated, such as the Independent Restaurant Coalition (IRC). “The purpose of the IRC was to bring all of those actors together in one band, so that the sound could be louder in Congress,” Miller said.
Among the IRC’s policy demands include a request for specific wording to ensure restaurants of different sizes are eligible for zero- or low-interest loans, and also to make sure that relief programs include restaurants that had already shut down and laid off staff before relief programs were enacted. The National Restaurant Association, which represents many of the bigger corporate chains as well as some small businesses, also sent Congress a letter with policy requests, including a $145 billion restaurant and foodservice industry recovery fund and various loan and tax abatement programs.
In addition to federal policy support, there is also significant policy advocacy on behalf of restaurants and workers happening at the state level. JBF created gubernatorial tool kits for groups to use, and more than 35,000 people have signed a petition in New York calling for actions like doubling state unemployment benefits for furloughed and laid off workers and providing rent abatements.
While these groups have been lobbying Congress and states, support for the various relief efforts have exploded on social media. In addition to #toosmalltoofail, Instagram also now has thousands of posts tagged #saveamericanhospitality and #saverestaurants. Chefs and restaurants in every impacted city are joining the chorus, but are legislators listening?
Miller said that she was encouraged by indications that a House version of the most recent bill would name restaurants specifically as a severely impacted industry and would include some of IRC’s requested changes related to business size and the timing of shut downs. But a draft of that bill introduced on Monday didn’t appear to live up to those expectations. Both the House and Senate bills do include various relief measures that could help small businesses of all types access loans and loan forgiveness.
The House version also includes extra unemployment funds, paid sick leave extensions, and increased SNAP benefits that would benefit the industry’s workers. But neither bill names restaurants as an industry, although each designates significant funds for airlines: the Senate bill includes a $50 billion fund for air carriers and $8 billion for air cargo carriers.
Overall, what’s missing, Miller said, is “cold, hard cash. Given everything else that’s happening in the world, restaurants are going to need a lot of money. That money is going to have to come from customers, private investors, philanthropy, and the government.”
Now, with two disparate bills in the Senate and House and negotiations still ongoing, the future of all of these legislative relief efforts is even more uncertain, but what is clear, Dawn Thilmany said, is that the fate of the industries—independent restaurants and small farms—are inextricably linked.
“The fast food chains that have already nailed delivery and takeout are very rarely contributing to local food systems,” she said. “If it’s Taco Bell and Burger King and McDonald’s that stay open, that’s not going to help small, local farms.”
This piece was originally published on the Civil Eats website on March 24.