Market Facilitation Program Set in Motion to Assist Producers


By Mayzie Purviance

Upon the announcement of the Market Facilitation Program – Round Two (MFP) details, farm groups expressed appreciation for the support but were quick to add that a more permanent solution is needed.  The MFP was developed by the USDA to assist farmers who suffer from damages due to unjustified trade retaliation from foreign nations.

“While we are grateful for the continuing support for American agriculture from President Trump and Secretary Perdue, America’s farmers ultimately want trade more than aid,” American Farm Bureau Federation (AFBF) President Zippy Duvall said.  “It is critically important to restore agricultural markets and mutually beneficial relationships with our trading partners around the world.”

Duvall said he is hopeful resuming trade talks with China will lead to a prompt resolution and that the administration will then shift their focus to progress with other markets like Japan and the European Union.  As of current, Duvall said AFBF is focusing their priorities on the passage of the U.S.-Mexico-Canada-Agreement.

National Farmers Union (NFU) also expressed gratitude for the assistance program but called for a long-term solution.  NFU President Roger Johnson explained that “long before” the trade war started, the agriculture industry was already facing many challenges and “family farmers and ranchers were struggling to make ends meet.”

“Chronic oversupply and slumping commodity prices have beleaguered the agricultural economy for six consecutive years, putting most operations in the red,” Johnson said.  “But the unstable markets and rapidly fluctuating prices caused by this administration’s trade policies has made matters even worse.  Many farmers didn’t even know what to plant this last spring because they couldn’t begin to anticipate what might be profitable come harvest.”

North Dakota NFU President Mark Watne said the organization has been working to secure the second round of MFP payments for several months now, knowing it is critical for producers.

“When other groups were telling us payments wouldn’t happen, we stood up and said, ‘It has to happen,’” Watne said.  “This payment isn’t peanuts.  It will make a difference.”

USDA is set to provide up to $14.5 billion in direct payments distributed in three separate tranches to impacted producers.  Applications for the first tranche can be submitted through December 6, 2019.  Fifty percent of these payments will be made in mid to late August.  If market conditions continue to decline, 25 percent of payments will be made in November and the final 25 percent in early January.

For the first round of payments, the majority of commodity grain producers will be compensated on a single-county rate at a minimum of $15 per planted acre.  This number could increase up to 50 percent.  Among the list of non-specialty crops are: 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.

Dairy producers will receive 20 cents per hundredweight based on historical production.  Hog producers are set to receive payment based on the number of live hogs owned on a specific day selected by the producer between April 1 and May 15, 2019.

Specialty crops will receive payment based on 2019 acres of fruit or nut bearing plants.  These crops include almonds, cranberries, cultivated ginseng, fresh grapes, fresh sweet cherries, hazelnuts, macadamia nuts, pecans, pistachios and walnuts.

“Our team at USDA reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers.  Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them,” Secretary of Agriculture Sonny Perdue said.

Johnson said his organization has some concerns with the recently revised MFP.  While he reiterated NFU’s appreciation for the program, he said payments made on a county-by-county basis could put some farmers at a financial disadvantage.  He also expressed disappointment in the lack of incentives to reduce production, which could help alleviate the challenges of excess supply and depressed prices.

“This assistance is desperately needed, but the ad-hoc rollout and convoluted structure of these programs has caused significant confusion among producers,” Johnson said.  “Until more predictable, longer-term solutions are made available, that sense of confusion and insecurity will likely persist.  In the future, we urge the administration to work more closely with Congress to build on the existing safety net and provide certainty and stability in farm country.”

 

 

 

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