USDA announces Market Facilitation Program
Agriculture Secretary Sonny Perdue and other USDA officials today announced the 2019 Market Facilitation Program to provide aid to farmers whose incomes have been damaged by the continuing trade conflict with China and other countries.
In a call to reporters, the officials said the signup will begin on Monday and end December 6. Program details have been posted on farmers.gov on the USDA website – https://www.farmers.gov/manage/mfp
A producer’s total payment-eligible plantings cannot exceed total 2018 plantings. County payment rates range from $15 to $150 per acre, depending on the impact of unjustified trade retaliation in that county, USDA said.
Farmers who declared that they were unable to plant a normal crop and received a prevent planting payment but were able to plant a cover crop will receive the minimal $15 per acre payment.
The first round of payments, which will be made in August, will be based on the $15 minimal payment and half of the county payment.
The second round will be made in November and the third round in January. The second and third rounds will depend on whether the trade conflicts are still continuing, Agriculture Undersecretary for Farm Production and Conservation Bill Northey said.
In addition to the nonspecialty crop payments to farmers, there will be payments to specialty crop producers and hog and dairy producers.
USDA said, “MFP payments are limited to a combined $250,000 for non-specialty crops per person or legal entity. MFP payments are also limited to a combined $250,000 for dairy and hog producers and a combined $250,000 for specialty crop producers.”
“However, no applicant can receive more than $500,000. Eligible applicants must also have an average adjusted gross income (AGI) for tax years 2014, 2015, and 2016 of less than $900,000 or, 75% of the person’s or legal entity’s average AGI for tax years 2014, 2015, and 2016 must have been derived from farming and ranching. Applicants must also comply with the provisions of the Highly Erodible Land and Wetland Conservation regulations.”
If the program is fully realized payments to farmers are expected to total $14.5 billion, USDA will spend $1.4 billion on purchases of food products and trade promotion groups will receive $100 million, bringing the total of the trade relief program to $16 billion.
The officials said that USDA had attempted to smooth out the program compared to 2018, but Perdue said there would be cases in which there would be “misalignments” from county to county.
He noted that a farmer in a county in which wheat, which was not so affected by the trade conflicts, was the major crop but who planted cotton would find out that his payments would be lower than a farmer in a nearby county in which cotton was the major crop.
The formula this year is based on the highest exports to a country in the past 10 years rather than what was exported in 2017, which was the basis for the calculation last year. An official said the reason for the change was that in 2017 China did not buy much corn because it had imposed nontariff barriers and therefore in 2018 the payment for corn was low. But China had bought more corn in the past and the formula this year will reflect that.
Asked about President Donald Trump’s statements that he expects China to make big purchases, Perdue said “that was the president’s expectation.”
The White House has announced that U.S. officials will travel to China to resume negotiations, and Perdue said he believes Trump had insisted on purchases as a way to unfreeze the negotiations.
But Perdue also said that the United States is not in a particularly good position to sell soybeans to China right now. He noted that Brazil is just finishing up its spring harvest and said, “We are somewhat at a price disadvantage right now.”
Perdue also emphasized that Trump had directed USDA to develop the trade aid and said that Trump “knew instinctively that producers would bear the brunt” of his attempt to improve the trade relationship with China and other countries.
–The Hagstrom Report