By Scott Stiles, Agricultural Economist
As announced last month, USDA will authorize up to $12 billion in programs to assist agricultural producers impacted by disrupted export markets. U.S. Secretary of Agriculture Sonny Perdue announced today details of these programs. To watch a video message from Secretary Perdue regarding today’s announcement, you may view Secretary Perdue‘s Overview of Trade Mitigation Package.
The $12 billion assistance package consist of the following three (3) programs:
- USDA’s Farm Service Agency (FSA) will administer the Market Facilitation Program (MFP) to provide payments to corn, cotton, dairy, hog, sorghum, soybean, and wheat producers starting September 4, 2018.
- USDA’s Agricultural Marketing Service (AMS) will administer a Food Purchase and Distribution Program to purchase up to $1.2 billion in commodities. USDA’s Food and Nutrition Service (FNS) will distribute these commodities through nutrition assistance programs such as The Emergency Food Assistance Program (TEFAP) and child nutrition programs.
- Through the Foreign Agricultural Service’s (FAS) Agricultural Trade Promotion Program (ATP), $200 million will be 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.
Market Facilitation Program:
MFP is established under the statutory authority of the Commodity Credit Corporation (CCC) and administered by FSA. For each commodity covered, the payment rate will be dependent upon the severity of the trade disruption and the period of adjustment to new trade patterns, based on each producer’s actual production.
Interested producers can apply after harvest is 100 percent complete and they can report their total 2018 production. Beginning September 4th of this year, MFP applications will be available online at www.farmers.gov/mfp. Producers will also be able to submit their MFP applications in person, by email, fax, or by mail.
Eligible applicants must have an ownership interest in the commodity, be actively engaged in farming, and have an average adjusted gross income (AGI) 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. On September 4, 2018, the first MFP payment periods will begin.
Market Facilitation Program
|Commodity||Initial Payment Rate|
|Cotton||$0.06 / lb.|
|Corn||$0.01 / bu.|
|Dairy (milk)||$0.12 / cwt.|
|Pork (hogs)||$8.00 / head|
|Soybeans||$1.65 / bu.|
|Sorghum||$0.86 / bu.|
|Wheat||$0.14 / bu.|
** Initial payment rate on 50% of production
The initial MFP payment will be calculated by multiplying 50 percent of the producer’s total 2018 actual production by the applicable MFP rate. If CCC announces a second MFP payment period, the remaining 50 percent of the producer’s total 2018 actual production will be subject to the second MFP payment rate.
MFP payments are capped per person or legal entity at a combined $125,000 for corn, cotton, sorghum, soybeans and wheat.