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Trump administration says producers need only sign up once for the Market Facilitation Program payments.

December 17, 2018

5 Min Read
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Agriculture Secretary Sonny Perdue today launched the second and final round of trade mitigation payments aimed at assisting farmers suffering from damage due to trade retaliation by foreign nations.  Producers of certain commodities will now be eligible to receive Market Facilitation Program payments for the second half of their 2018 production.

“The president reaffirmed his support for American farmers and ranchers and made good on his promise, authorizing the second round of payments to be made in short order. While there have been positive movements on the trade front, American farmers are continuing to experience losses due to unjustified trade retaliation by foreign nations.  This assistance will help with short-term cash flow issues as we move into the new year,” said Perdue.

Market Facilitation Program

Producers need only sign up once for the MFP to be eligible for the first and second payments. The MFP sign-up period opened in September and runs through Jan. 15, 2019, with information and instructions provided at http://www.farmers.gov/mfp.  Producers must complete an application by Jan. 15, 2019, but have until May 1, 2019 to certify their 2018 production. The MFP provides payments to almond, cotton, corn, dairy, hog, sorghum, soybean, fresh sweet cherry, and wheat producers who have been impacted by actions of foreign governments resulting in the loss of traditional exports. The MFP is established under the statutory authority of the Commodity Credit Corporation CCC Charter Act and is under the administration of USDA’s FSA. Eligible producers should apply after harvest is complete, as payments will only be issued once production is reported.

For farmers who have already applied, completed harvest, and certified their 2018 production, a second payment will be issued on the remaining 50% of the producer’s total production, multiplied by the MFP rate for the specific commodity.

MFP payments are limited to a combined $125,000 for corn, cotton, sorghum, soybeans, and wheat capped per person or legal entity.  MFP payments are also limited to a combined $125,000 for dairy and hog producers, and a combined $125,000 for fresh sweet cherry and almond producers. Applicants must also have an average adjusted gross income for tax years 2014, 2015, and 2016 of less than $900,000. Applicants must also comply with the provisions of the Highly Erodible Land and Wetland Conservation regulations.

Perdue announced in July that USDA would act to aid farmers in response to trade damage. Trump directed Perdue to craft a short-term relief strategy to help protect agricultural producers while the administration works on trade deals. In September, USDA initiated three programs to aid American agriculture in sustaining the short-term damages associated with the trade disputes and securing long-term, stable export markets.

Details of programs:

  • USDA’s Farm Service Agency has been administering MFP to provide the first payments to almond, corn, cotton, dairy, hog, sorghum, soybean, fresh sweet cherry, and wheat producers since September 2018 for the first 50% of their 2018 production.

  • USDA’s Agricultural Marketing Service is administering a food purchase and distribution program to purchase up to $1.2 billion in commodities targeted by retaliation. USDA’s Food and Nutrition Service is distributing these commodities through nutrition assistance programs, such as The Emergency Food Assistance Program and child nutrition programs. So far, USDA has procured some portion of 16 of the 29 commodities included in the program, totaling more than 4,500 truckloads of food. AMS will continue purchasing commodities for delivery throughout 2019.

  • Through the Foreign Agricultural Service’s Agricultural Trade Promotion program, $200 million is being made available to develop foreign markets for U.S. agricultural products. The program will help U.S. agricultural exporters identify and access new markets and help mitigate the adverse effects of other countries’ restrictions. The application period closed in November with more than $600 million in requested activities from more than 70 organizations. FAS will announce ATP funding awards in early January.

Market Facilitation Program

Reaction

“Soy growers are very thankful that President Trump understands the need for this payment on the full 2018 production and that the administration will deliver the second half of the aid as promised. While it will not make our losses whole, it will certainly help offset the drop in prices we have experienced since China cut off U.S. soybean imports,” said American Soybean Association president Davie Stephens, a soybean producer from Clinton, Kentucky. “We saw some initial sales of U.S. soybeans to China last week, which was also welcomed news and we hope a sign that the trade war could be turning a corner as a result of President Trump’s recent meeting with President Xi.”

“NAWG continues to emphasize to both the USDA and OMB that the ongoing trade war with China has continued to harm wheat farmers, which is evident with there having been no sales to China since March,” said National Association of Wheat Growers President and Sentinel, Oklahoma wheat farmer Jimmie Musick. “These retaliatory tariffs are not only harming growers through loss of sales but are also placing pressure on wheat prices. Growers want new export markets and trade deals so that this sort of assistance isn’t necessary.”

Wheat growers have lost around $323 million in total sales to China. Additionally, wheat sales to Mexico have declined by 569,000 metric tons compared to the previous year, despite Mexico increasing overall wheat imports. This is an estimated loss of $178 million and caused by Mexico’s decision to source wheat imports from alternative markets amid uncertainty of trade agreements and unknown repercussions from Section 232 tariffs. 

“Sorghum producers are at the end of a difficult harvest season in many regions of the Sorghum Belt, and these payments will help mitigate the drop in prices sorghum farmers have faced since China stopped importing U.S. sorghum earlier this spring,” said National Sorghum Producers Board of Directors Chairman Dan Atkisson, a grower from Stockton, Kansas.

The National Corn Growers Association is disappointed that corn farmers are receiving a penny per bushel, despite the fact corn farmers have suffered an average 44 cent per bushel loss since tariffs were first announced.

"Farmers of all crops have felt the impact of trade tariffs," said NCGA President Lynn Chrisp. "NCGA appreciates the progress the administration has made to advance ethanol, reach a new agreement with Mexico and Canada and move forward on negotiations with Japan, but the benefits of these efforts will take time to materialize and farmers are hurting now. One cent per bushel is woefully inadequate to even begin to cover the losses being felt by corn farmers. USDA did not take into account the reality that many of our farmers are facing.”

Source: USDA, ASA, NAWG, National Sorghum Producers, NCGA

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