Details of support package for farmers emerge07/25/2019 | Soybean News, Economics
By Bethany Baratta, ISA senior writer
Details released today from the U.S. Department of Agriculture (USDA) for a $16 billion support package provides some hope for farmers like Tim Bardole who have struggled the past two years as a result of trade disputes between the United States and China.
The package includes the second round of payments under the Market Facilitation Program (MFP 2.0) as well the Food Purchase and Distribution Program (FPDP), and Agricultural Trade Promotion Program (ATP). The programs are designed to support producers while the administration works to address ongoing market access barriers, the USDA said today.
MFP assistance for non-specialty crops (including soybeans and corn) 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 those crops are planted in 2019. A producer’s total payment-eligible plantings cannot exceed total 2018 plantings.
Iowa farmers would be compensated between $40 per acre and $79 per acre. The amount varies from state to state and county to county depending on the “impact of unjustified trade retaliation in that county,” the USDA said. County payments range from $15 to $150 per acre in the United States, the USDA said.
The details were good news for soybean farmers like Bardole, president-elect of the Iowa Soybean Association (ISA).
“This MFP 2.0 will make a big difference in a lot of operations including ours,” said Bardole, who farms near Rippey. “When you are borrowing money to not only farm with but live on, any additional money definitely helps. A lot of people are maxed out on their operating notes and this will give some money to hopefully pay down a little bit of the operating note and have something to go on until harvest.”
Bardole said MFP 2.0 is welcome news during a difficult year.
“It is enough to make a difference with cashflows to get through and hopefully plant another crop next year,” Bardole said. “This will make a real difference in operations. It’s not a token payment, there is enough of a payment that it will make a difference and I appreciate that.”
Prevent plant acres
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, according to the USDA.
Cap on payments
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.
The USDA noted the first 50 percent of MFP 2.0 is guaranteed. MFP payments will be made in up to three tranches (or portions), with the second and third tranches evaluated as market conditions and trade opportunities dictate, the USDA said.
“If conditions warrant, the second tranche will be made in November, and the third in early January,” the USDA said.
MFP signup at local FSA offices will run from Monday, July 29 through Friday, December 6, 2019.
Recognizing the impact on farmers
Bardole said he’s grateful for the support under MFP 2.0.
“It’s definitely been a tough two years. I’m glad that the administration hasn’t forgotten about us in the Midwest and around the country,” Bardole said.
Grant Kimberley, director of market development for ISA, acknowledges the administration’s efforts through MFP 2.0, but said it will take several years to recoup the losses as a result of the trade impasse between the United States and China.
“The trade aid won’t make farmers whole due to the Chinese retaliatory tariffs, but it will help to partially mitigate those losses,” Kimberley said.
Even with a trade resolution, the USDA estimates it will take until 2027 for the United States to recapture all of the lost soybean export demand due to the trade impasse, Kimberley noted.
The administration could help farmers in other ways, Kimberley said, such as growing the Renewable Fuel Standard, reducing the number of small refinery exemptions it allows and extending the biodiesel tax credit.
The USDA has allocated $1.4 billion in the package to go toward the Food Purchase and Distribution Program (FPDP). Through the program, the Agricultural Marketing Service will purchase surplus commodities affected by trade retaliation such as fruits, vegetables, some processed foods, beef, pork, lamb, poultry and milk for distribution by the Food and Nutrition Service (FNS) to food banks, schools, and other outlets serving low-income individuals. Read here for more details.
Market research funding
The USDA’s Foreign Agricultural Service will administer the Agricultural Trade Promotion Program to provide cost-share assistance to eligible U.S. organizations for activities such as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research, and technical assistance, according to the USDA.
The ATP allocated more than $34.6 million for the American Soybean Association between allocations announced in January and July, the USDA said.
Trade over aid
Though thankful for the payments, farmers would rather have a resolution to the trade impasse, said Michael Dolch, ISA director of public affairs.
“While farmers appreciate the administration’s ongoing support during this time of severe economic pain, the only path to mitigating disruption and restoring market access is trade,” Dolch said. “We must restore relationships with our top trading partners to draw down the pile of soybeans across Iowa.”
A team of ISA directors delivered this message on Capitol Hill and at USDA this week during the American Soybean Association’s board meeting in Washington, D.C.
ISA Senior Communications Manager Joe Murphy contributed to this story.
Contact Bethany Baratta at email@example.com.
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