It may be safe to say farmers appreciate the Market Facilitation Program. It may also be safe to say they would prefer not to rely on it.
The program is in its second year. It is designed to make up for export losses suffered as a result of the Trump administration’s trade war with China.
“Farmers are appreciative that the president and USDA are trying to make up for the lost markets we still haven’t regained,” said Adam Nielsen, director of national legislation and policy development with Illinois Farm Bureau.
Illinois farmers received $1.1 billion in MFP payments in 2018, more than in any other state. Iowa farmers received nearly as much.
This year, many have pointed out that individual farmers in other states — including Mississippi — are receiving more than those in the Corn Belt. That’s not something Nielsen frets about.
“It doesn’t help us to get critical about what other people are getting,” he said. “It is curious that there are other counties in the country growing other crops getting substantially more. But we’re not fixated on what other states are or are not getting.”
While tariffs placed on soybean imports by China get a lot of attention, many other agricultural commodities are in play. The long list includes corn, dairy, cotton, alfalfa, peanuts and wheat. Specialty crops such as nuts, ginseng and grapes are also covered.
“A number of crops not grown in the Midwest are included,” Nielsen said. “Almonds, for example, have been hit very hard in the trade war.”
Indeed, there is a big disparity in payments from county to county and commodity to commodity.
“County payment rates range from $15 to $150 per acre, depending on the impact of unjustified trade retaliation on that county,” said Peter Wood of
USDA’s farm production and conservation mission area. “Producers will receive a payment based on 2019 planted acreage multiplied by their county payment rate.”
That means farmers with prevented planting acres may see smaller payments this year. The MFP does not help with that acreage. Owing to the changing nature of the trade talks, the program is aiming at a moving target.
“MFP payments will be made in up to three tranches, with the second and third tranches evaluated as market conditions and trade opportunities dictate,” Wood said. “If conditions warrant, the second and third tranches will be made in, respectively, November and early January.”
A tranche refers to a portion of a total of a cash or security payout.
The USDA will provide up to $14.5 billion in direct payments this year to assist farmers suffering from the trade war. The sign-up period runs through Dec. 6.
“They’re trying to be as transparent as they could,” Nielsen said. “It’s evident that a lot of places where cotton is grown, for example, have high payment rates.”
Although prevented plant acres are not eligible for payments, farmers who plant cover crops meeting crop insurance requirements may receive $15 per acre for those lands.
To be eligible for the $15 per acre MFP payment, a cover crop must be planted by Aug. 1. The cover crop must meet crop insurance requirements.
Nielsen points out farmers would rather have a flourishing export market for their crops instead of relying on makeup payments.
“Tariffs still remain, and we’re nowhere near in terms of export demand with China than we were a few years ago,” he said. “We have less than 5% of that market. Soybean exports was a $2 billion market for just the state of Illinois in 2017, $1 billion in 2018, and just a trickle this year.
“There is a point at which your patience runs out. I don’t know how much longer we can go on.”