New COVID-19 relief bill could help US seafood suppliers get paid

Proposals for the next U.S. COVID-19 stimulus package are now being workshopped in the U.S. Senate, with food industry groups calling for changes and holding out hope that seafood suppliers will see reimbursement for unpaid invoices from foodservice buyers.

Legislators are negotiating several provisions of the “Health, Economic Assistance, Liability Protection and Schools (HEALS) Act," HEALS Act, and the National Fisheries Institute, the U.S. seafood trade lobby, is optimistic that it will end up benefitting the seafood industry.

“NFI’s goal is to help our members and their customers, like restaurants, get through this and get going again. The HEALS Act will help,” NFI Vice President of Communications Gavin Gibbons told SeafoodSource.

One major benefit of the proposed legislation for seafood businesses – along with distributors, restaurants, and other companies – is a second round of Paycheck Protection Program loans. The loans would cover up to 2.5 times a business’s monthly payroll or USD 2 million (EUR 1.7 million), parts of which are forgivable.

In a win for seafood suppliers, the PPP loan provisions allow a forgivable portion of the loan expenditures to be used for suppliers that are essential to a business’s operations, such as outstanding invoices from seafood delivered to restaurants at the start of the pandemic.

“We applaud the Senate’s efforts to allow business owners to use PPP funds to pay suppliers, which will be helpful to restaurant owners — among the hardest-hit by the pandemic,” IFDA President and CEO Mark Allen said in a press release. “This change will provide the necessary support to help them pay for the food and supplies they need to keep their kitchens cooking.”

The PPP loan section also limits eligibility to companies with less than 300 employees and the firms must show a 50 percent reduction in gross revenue over a 13-week period. 

However, several organizations are telling senators that the 50 percent threshold is too high, according to NFI. IFDA is one of the groups protesting the threshold. 

“Sen. [Marco] Rubio’s proposal requiring employers to show a 50 percent revenue loss to qualify for a second Paycheck Protection Program loan is particularly problematic. This puts the focus on businesses on the brink of failure,” Allen said. "The legislation should be designed to help struggling, yet viable, employers before they are on the brink of failure. The restaurant industry goes into the red well before reaching that 50 percent threshold.”

The threshold should instead be set at a more reasonable 20 percent, according to Allen.

Other improvements to the PPP provision include coverage of property damage “due to public disturbances that occurred during 2020 that are not covered by insurance,” the legislation states.

The loans can also cover personal protective equipment and adaptive investments to “help a loan recipient comply with federal health and safety guidelines related to COVID-19 during the period between 1 March, 2020, and 31 December, 2020,” the bill said.

The next phase of PPP funds should be designed to ensure relief goes to “as many businesses, who have been deeply and adversely impacted, as possible,” Allen said.

"This is especially true with the situation we are in now, where tens of thousands of restaurants are determining whether they can afford to stay open for another month, much less through the fall and beyond. Many will base their decisions on what Congress ultimately enacts,” Allen said

The Center for Science in the Public Interest, a non-profit watchdog and consumer advocacy group that advocates for safer and healthier foods, criticized the Senate bill, because it omits “sorely needed provisions to alleviate food insecurity through the Supplemental Nutrition Assistance Program (SNAP) by increasing nutrition benefits and protecting access to the program,” CSPI said.

“Besides addressing a growing and severe hunger crisis, such increases are also well demonstrated to stimulate the economy. The failure to strengthen SNAP is inexplicable, given that the Senate bill doubles the tax deduction for business meals,” CSPI added.

Photo courtesy of LADO/Shutterstock


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