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USDA details how it developed MFP Round 2 payment

USDA developed estimate of gross trade damages to set commodity payment rates

How did the USDA determine the amount of trade aid for the second round of Market Facilitation Program payments? USDA’s Office of the Chief Economist developed an estimate of gross trade damages for commodities with assessed retaliatory tariffs by China, India, the European Union, and Turkey to set commodity payment rates and purchase levels. USDA employed the same approach often used in adjudicating World Trade Organization trade dispute cases.

Related: Details of 2019 Market Facilitation Program released

“Just as we did before, we want to be transparent about this process and how our economists arrived at the numbers they did. We listened to feedback from farmers on last year’s programs and incorporated many of those suggestions into today’s programs. While no formula can be perfect in addressing concerns from all commodities, we did everything we could to accommodate everyone,” Agriculture Secretary Sonny Perdue said. “Our support package ensures farmers will not stand alone in facing unjustified retaliatory tariffs while President Trump continues working to solidify better and stronger trade deals around the globe.”

Related: USDA’s county list of Market Facilitation Program 2 payments

“NCGA welcomes USDA’s transparency in this process,” said National Corn Growers Association President Lynn Chrisp. “Corn farmers were understandably disappointed by the one cent per bushel for corn in the first MFP program and we appreciate that it appears USDA considered our recommendations in developing MFP 2.0.”

NCGA analysis showed an average price loss for corn of 20 cents per bushel from May 2018 to April 2019. As trade talks with China lagged on in March and April of 2019, losses widened closer to 40 cents per bushel.

TAGS: USDA
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