US seafood industry hopes for help from USD 2 trillion stimulus package

The United States Congress is nearing finalization of a third COVID-19 stimulus bill totaling up to USD 2 trillion (EUR 1.85 trillion) in across-the-board relief.

The U.S. Senate is expected to vote on the package on the afternoon of Wednesday, 25 March, and the House of Representatives – currently in recess – is expected to reconvene for its own vote “as soon as possible,” House Speaker Nancy Pelosi (D-California) told CNN. President Donald Trump has also expressed his support for the bill on Twitter.

The legislation includes financial support for companies of all sizes that have lost customers as a result of the public response to the COVID-19 crisis. It also features incentives to encourage companies to keep employees on their payrolls. It also includes direct payments to low- and middle-income families, and unemployment insurance that will pay out up to four months’ worth of income for laid-off workers and those who have faced reduced work hours. Also on the table, according to a press release from the office of Senate Minority Leader Chuck Schumer (D-New York), are loans for small businesses that would be considered forgivable if the money is used for payroll, mortgage, rent or utility costs.

While the bill continues to be fine-tuned, the Republican senators from Alaska, U.S. Sens. Lisa Murkowksi and Dan Sullivan, and their Democratic counterparts from Massachusetts, U.S. Sens. Edward Markey and Elizabeth Warren, sent a letter to Schumer and Senate Majority Leader Mitch McConnell (R-Kentucky) asking them to ensure the COVID-19 bill also includes provisions for the fishing industry.

Like other sectors, the seafood industry has been hammered by cratering markets for fresh seafood. With restaurants in many states either closed or limited to just offering takeout and delivery, demand for fish, lobster and other seafood products have dramatically decreased. In addition, the coronavirus pandemic has also drastically shrunk export markets.

However, some programs included in the latest relief package, such as expanded unemployment insurance, may not help fishermen, many of whom are self-employed.

“When evaluating potential support, Congress should consider the establishment of federal procurement programs specifically for U.S. seafood products; helping fishermen with vessel loan payments and refinancing; qualifying fishermen for unemployment insurance; funding federal fisheries disaster assistance; and deploying other financial support mechanisms to maintain the stability of the seafood industry,” the senators said in the letter. “We also strongly support robust funding for the National Marine Fisheries Service in the regular appropriations process to ensure that the global pandemic does not compromise management of our nation’s fisheries.”

An industry group, Saving Seafood, released a statement on the afternoon of Tuesday, 24 March “expressing gratitude” to the four senators for their efforts to support the seafood industry.

“It is our hope that Congress will heed their request, and also recognize and take action to address the reality that our commercial fishing and seafood industries are highly diverse between regions,” the organization said.

To supplement their effort, Saving Seafood detailed a campaign, led by Pacific Seafood, to send letters to President Trump, his Cabinet, and the leadership of the House and Senate, asking for “bold action that can be taken to preserve the operating liquidity of the seafood production employers.” More than 180 companies, as well as the National Fisheries Institute, took part in the campaign, according to the group. The letters called for:

• Ensuring the U.S. Department of Agriculture’s Section 32 funding levels are maintained, while appropriating USD 2 billion (EUR 1.85 billion) to allow the government to use Section 32 to purchase surplus seafood for schools and U.S. consumers in an expedited fashion.
• Supplying the U.S. Department of Commerce with USD 1.5 billion (EUR 1.38 billion) to provide direct “fishery disaster” relief to fishermen and seafood companies, along with the waiver of previously mandatory requirements for qualification for the program.
• Funding the Secretary of Commerce with USD 500 million (EUR 463 million) to purchase surplus commercial seafood that can be supplied to areas of need domestically and overseas, such as hospitals, assisted living communities, and government food programs.

According to the letter, the industry requires support “to preserve the operating liquidity of the food production employers who provide and support domestic food infrastructure and the millions of jobs it supports.”

“Failure to do so risks unprecedented decline in essential economic activity that will severely affect both workers and our nation’s ability to continue feeding itself,” the letter said.

Directing the bulk of financial support provided by the government to seafood purchases is the quickest and most effective way of supporting the industry, according to the letter.

“Facilitating direct government purchase of products that have gone unsold due to the government’s unprecedented response to the COVID-19 crisis would both ensure stability in this key sector and provide healthy proteins for Americans,” it said.

According to a Saving Seafood survey of the industry, other means of support that seafood business are looking for include (Saving Seafood comment on each measure included in italic):

• Declaring “essential employee” status for seafood workers. According to guidelines published by the Department of Homeland Security, those employed in fish harvesting and processing are considered “Essential Critical Infrastructure Workers” as they provide food to the nation. Fishermen and processor staff must also be designated as essential employees so that they would be able to continue operations during any potential shelter-in-place orders. These businesses must also have free and fast testing deployed locally for these essential workers, as testing is a necessary component of onboarding/crewing protocol to safely serve upcoming fishing and processing seasons.
• Grant programs or stimulus to cover losses. In order to maintain domestic seafood supply chains and to ensure continued operations, many businesses in the commercial fishing industry need liquidity. These businesses feel that additional borrowing should be a last resort, as the duration of this crisis is unknown and many businesses are already overleveraged in an attempt to keep up with foreign markets, including Asia where their seafood industry is heavily subsidized. Loan forgiveness for loans used to maintain payroll, grants for maintenance to keep vessels in good working order, and low-interest loans to refinance existing debt would help.
• Payment relief. In addition to direct payments, and forgivable loans, another suggestion that would allow companies to continue operations is the suspension of certain financial obligations such as utilities, real estate tax, and mortgages.
• Government purchase of seafood. The government could increase seafood purchases for institutional use (i.e. prisons, hospitals, school lunch programs, etc.) as well as for distribution as food assistance. The purchases would provide much-needed capital, ensure stable prices, allow companies to move stored inventory, and ensure continued operations. This would also ensure a stable supply of fresh, healthy food for those who are facing food shortages.
• Payroll and Unemployment Assistance. Many businesses are concerned that when restaurants, hotels, and bars re-open they will face significant lag time before resuming operations if they are forced to lay off staff during this time. This lag would compound the financial difficulties they are already facing. They would like to be able to continue paying staff or assure them that unemployment payments will be available to quickly fill the gap so that their employees don’t seek work elsewhere. Additionally, many vessel crew members are considered self-employed and do not currently qualify for unemployment or paid leave, so relief efforts must also be extended to these workers.
• Promote American Seafood. On an encouraging note, many businesses are seeing an increase in retail sales of seafood through grocery stores and markets. U.S. fisheries are among the best in the world and this is a perfect opportunity to promote consumption of sustainably caught domestic seafood. A “Buy American” campaign, with simple instructions, could go a long way to helping these businesses move their product and maintain revenue.
• Visa Expediting. Many businesses rely on temporary, seasonal foreign labor for the harvesting and processing of seafood. Current travel restrictions and bureaucratic delays are limiting the number of essential workers available. When travel restrictions are reduced and retail businesses reopen, fishing operations need to be able to staff up as quickly as possible, including hiring essential workers with valid temporary, seasonal visas.
• Federal Fisheries Disaster Action. Declaration of a federal fisheries disaster opens up aid options including direct subsidies for struggling businesses and low interest loans. The Administration should expedite the OMB approval process of stakeholder “spend plans” for fishery disasters already declared and funded by Congress. There are currently plans sitting at OMB awaiting final approval and funding disbursements. The COVID situation has placed a more urgent need in coastal communities for these previously appropriated funds.
• Supply chain access. Several fishing operations around the country sell their products overseas. They are requesting continued access to and cooperation from officials at ports, rail, and border crossings so that they can maintain their sales.
• Stability of Fisheries Access. In order that the industry may make a full and speedy recovery, to reduce costs, and to maintain supply, we urge reducing unnecessary regulatory burdens currently in place that are preventing access to and sustainable harvest from fishing grounds.

In their joint statement, Murkowksi, Sullivan, Markey, and Warren said more government help might be necessary to stabilize the seafood industry. A fourth coronavirus-related stimulus package will be considered over the next few weeks, according to Politico. Saving Seafood also said the seafood industry may need more help that what will be provided in the current stimulus package.

“Additional assistance beyond what is outlined in today’s letters and this release may be needed to address broader near-term critical needs for some seafood producers," Saving Seafood wrote. "Domestic harvesting, production, processing, transportation, and promotion will all need federal assistance to ensure that we can provide a steady supply of healthy domestic seafood to U.S. consumers during this time of crisis."

Photo courtesy of Christopher Halloran/Shutterstock