MARSHALL — Glitches in the system are preventing farmers from qualifying for loans within the CARES Act, according to Rep. Collin Peterson, D-Minn.

The Congressman held a chat on Zoom with area business people Tuesday morning hosted by the Marshall Area Chamber of Commerce, providing updates relating to COVID-19 and its impact on agriculture, small businesses and more.

After the CARES Act was signed on March 27, farmers, ranchers and other small businesses have been in the process of seeking relief.

Peterson said one of the biggest problems they’re facing right now is that the Small Business Association had said farmers couldn’t qualify for loans within the CARES Act, but they’ve been working on resolving that issue.

“One of the problems that we have in the ag community is initially the SBA claimed that farmers could not qualify for the PPP (Paycheck Protection Program) or the EIDL (Economic Injury Disaster Loans); I think we’ve got that worked out but we haven’t been told that at this point,” Peterson said.

“Places like Farm Credit have never had a SBA setup, so they couldn’t get into the system. Most of the banks are tied into SBA as preferred lenders but some of them never had the relationship. So when people go in there, they can’t get into the system. There are glitches that are hopefully getting worked out. I think it’s pretty clear there is not going to be enough money, so my advice to you is to get into this deal as soon as you can.”

The present state of the dairy industry was another concern brought during the Zoom chat. Some Wisconsin farmers have been dumping out milk because of a surplus. Peterson said it’s not because of the prices being too low.

“The reason is that the farmers are not the ones that decide milk is to be dumped, it’s decided by whoever they’re selling their milk to,” he said.

“It’s decided by the co-op and the processors that are buying the milk from these farmers. we have lost at least 10% of our market, so we are oversupplied in dairy by 10%. What I’ve been working on is getting the farmers to agree to cut back 10% immediately. Because if we don’t, it’s going to be terrible. They came to an agreement on Sunday, but the problem is it has this huge price tag and I don’t think (USDA Secretary Sonny) Perdue is going to do it. The other problem is it depends on what kind of plant you’re selling to,” Peterson said.

“The whole market has been upended, so there’s a huge increase in the retail market and grocery stores that people can’t keep up with and on the other side, you’ve got food service that has been shut down.

“If you have a plant that’s selling to food service, you’re out of business and if you have a retail plant you can’t keep up and the problem is these guys can’t switch. That’s part of what we’re trying to sort out and get under control so we don’t lose these plants. The dairy industry, if we don’t get this thing fixed, they’ll probably exist but it won’t be anything like it is today.”

Meanwhile, many small businesses are either closed or struggling to stay afloat with being open for limited hours. Peterson said there isn’t enough money in loan systems such as the PPP and he would like to see the time frame of getting loan forgiveness extended.

“I think everybody wants to get small businesses open as soon as possible, and there is a lot of discussion about extra money being put into these systems but I think the first problem will be getting enough money to fund the initial PPP system. The current program covers two and a half months of your payroll and as long as you don’t lay anyone off, you’ll get that loan forgiven,” Peterson said.

“I suggest that we lengthen that out and cover more of it, but we’re not going to have enough money to do what we’re doing, so we’ll see how that plays out. There is also the EIDL that you can borrow up to $10 million if you’re under 500 employees, but the problem is that’s at a 3.75% interest rate. You can extend that out to 30 years, but I’m not sure who wants to do that.”

Peterson added they also don’t want to rush the timetable of getting businesses back to normal routines and it’ll be up to the governor to make those decisions.

“The state of Minnesota has made theses decisions to let certain businesses open and others close and it’ll be up to the governor to decide those issues,” Peterson said. “The other thing is we don’t want to rush this and get ourselves in a situation where we get into a thing like New York. I think we’ve done a pretty good job so far of keeping the infections down but they’re telling me the peak will come in the middle of May, so we have to be careful.”

Lyon County saw its fourth confirmed case of COVID-19 over the weekend. As for updates on vaccines and treatment for the virus, Peterson said they’re constantly working on getting solutions to the public as quickly as possible.

“I think they’re doing everything they can to move this thing as quick as possible and it’s what we’re going to need to get back to business full-time,” Peterson said. “They’ve told us the quickest word is 16 months and I don’t think it’s an issue of money, it’s just an issue of it’ll take that long to go through this process, but it’s being fast-tracked as quick as possible.”