Left Out: Struggling Dairy Farmers Ineligible for Second Round of PPP

For Roecker and other small farmers, the Paycheck Protection Program (PPP) — established by the CARES Act, to provide forgivable loans to qualifying small businesses — came as a relief. Roecker received a loan of roughly $40,000 through the program — enough to pay bills and, as he says, literally keep the lights on. 

“We were very, very thankful” for the PPP loan, Roecker said.

In total, at least 2,429 dairy farms in Wisconsin received a forgivable PPP loan. PPP has become a household acronym in the United States. It’s been a cornerstone of relief negotiations in Washington and funding for the program has been re-upped twice — most recently in December, when lawmakers earmarked another $284 billion for the program, which is overseen by the Small Business Administration. And when legislators once again refilled the fund, they included provisions in the bill to make businesses who had already received a forgivable PPP loan eligible for a second round of assistance through the program.

Only this time, Congress attached more stringent qualifiers to the loans. Businesses seeking a second forgivable loan must have used their first loan for only authorized uses, have 300 or fewer employees and ​“can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020,” according to SBA.

The final criterion is debilitating for Roecker and hundreds — potentially thousands — of other dairy farmers in the state who previously received PPP funds.

Conversations with multiple dairy farmers and a state Department of Agriculture employee tasked with helping farmers navigate federal relief programs revealed that few, if any, dairy farmers in the state have qualified for a second payment through the program. Because financial devastation over the last half-decade left pre-pandemic revenues for farmers at historic lows, showing a 25% loss between 2019 and 2020 is nearly impossible, the farmers said.

Tracy Brandel, a senior agricultural program specialist at the Wisconsin Farm Center, told In These Times in a phone interview that she has received daily calls since late December from dairy farmers asking questions about how to qualify for the second round of payments. To date, Brandel said she has not spoken to a single dairy farmer that has been eligible for a second payment.

Among those ineligible for a second loan are both Roecker and Patrick Schroeder, a farmer who milks roughly 400 cows in Lancaster, Wisconsin and received roughly $46,000 through the PPP last April to help keep seven people employed and cover other expenses. Like Roecker, Schroeder said the PPP money and other federal assistance helped keep his business going. 

“If I would have not gotten the money from the government last year … I would file bankruptcy and I would be out of business,” Schroeder told In These Times. “[The assistance] was that critical for us to survive.”

He added that among everyone he spoke to in agriculture that received the PPP loans before, none qualified for the second payment.

Roecker is in a similar position: Ineligible for another PPP loan but in desperate need of assistance, the Loganville farmer said that if it weren’t for a separate Economic Injury Disaster Loan he received from the SBA, ​“there would have been a very, very good chance we would have just walked away.” 

And besides the extremely cumbersome process to get his latest loan — several phone calls and emails and conversations with seven different SBA staffers — Roecker faces an interest rate of 3.75% — a far cry from the forgivable loan he could have received if he could have shown a 25% decrease in gross receipts.

Roecker also did not know of any farmers eligible for the second loan.

The decision by lawmakers to establish stricter criteria on the loans has left both Schroeder and Roecker feeling overlooked and left behind. ​“I honestly thought that when people were hungry, and they were worried about getting their food, that farmers would be considered one of the most important people in the world and we would really, really truly be important,” Schroeder said.

“We got no more respect today. Look at these PPP loans. We don’t mean nothing.”

Time is running out for lawmakers in Washington to make needed changes to the program to provide additional loans to farmers. The bill passed late last year dictates that the application period for PPP loans under the current round of funding close on March 31. With action in Washington being dominated by Covid-19 and hearings for President Joe Biden’s cabinet nominees, Wisconsin dairy farmers in urgent need of financial assistance could be left out in the cold.

“Nobody knows the pressure we are under,” Roecker said. ​“The milk checks are so bad and our costs are so high, there is nothing left to pay the bills.”