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Trade aid: USDA issues final MFP payments

Perdue
Perdue

WASHINGTON — The third and final tranche of the 2019 Market Facilitation Program payments are being issued by the U.S. Department of Agriculture.

The final payment represents the remaining 25% of the total county per-acre calculation. The first tranche was comprised of the higher of either 50% of a producer’s calculated county per-acre payment or $15 per acre, which may reduce potential payments to be made in tranche three. The second tranche was 25% of the total payment expected.

Of the $16 billion authorized for the program by President Donald Trump, $14.5 billion was aimed at assisting farmers suffering from damage due to trade retaliation by foreign nations. The funding was authorized under the Commodity Credit Corp. Charter Act and administered by the Farm Service Agency.

The program’s remaining funding was to implement a $1.4 billion Food Purchase and Distribution Program to purchase surplus commodities affected by trade retaliation such as fruits, vegetables, some processed foods, beef, pork, lamb, poultry and milk for distribution to food banks, schools and other outlets serving low-income individuals.

An additional $100 million was issued through the Agricultural Trade Promotion Program to assist in developing new export markets on behalf of producers.

County Ranges

Illinois’ total county per-acre payments ranged from $87 in Piatt to $50 in Jo Daviess, and Indiana’s counties ranged from $80 in Tipton to Starke’s $44. Final payments will be 25% of those per-acre totals.

The county payment rates were based on historical fixed average area and yields. The total potential payment amount for non-specialty crops is the eligible area multiplied by the non-specialty county rate per acre.

For each crop in a county, the rates were determined by multiplying the fixed historical acres, the fixed historic yields and the payment rate for unit for each eligible crop.

“It’s been a great start to 2020 for American agriculture with the signing of the historic Phase 1 deal with China and the signing of USMCA,” said USDA Secretary Sonny Perdue.

“While these agreements are welcome news, we must not forget that 2019 was a tough year for farmers as they were the tip of the spear when it came to unfair trade retaliation.”

Eligible Crops

Payments were made by FSA to producers of alfalfa hay, barley, canola, corn, crambe, dried beans, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, millet, mustard seed, oats, peanuts, rapeseed, rye, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, triticale, upland cotton and wheat.

MFP assistance for these non-specialty crops is based on a single county payment rate multiplied by a farm’s total plantings of MFP-eligible crops in aggregate in 2019. Those per-acre payments are not dependent on which of these crops are planted in 2019.

A producer’s total payment-eligible plantings cannot exceed total 2018 plantings. County payment rates in the nation range from $15 to $150 per acre, depending on the impact of unjustified trade retaliation in that county.

Dairy producers who were in business as of June 1, 2019, receive a per-hundredweight payment on Dairy Margin Coverage production history, and hog producers will receive a payment based on the number of live hogs owned on a day selected by the producer between April 1 and May 15, 2019.

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 for tax years 2015, 2016, and 2017 of less than $900,000 unless at least 75% of the person’s or legal entity’s AGI is derived from farming, ranching, or forestry related activities.

Applicants also must comply with the provisions of the Highly Erodible Land and Wetland Conservation regulations.

Many producers were affected by natural disasters this spring, such as flooding, that kept them out of the field for extended periods of time. Producers who filed a prevented planting claim and planted an FSA-certified cover crop, with the potential to be harvested qualify for a $15 per-acre payment. Acres that were never planted in 2019 are not eligible for an MFP payment.

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