Producers can qualify for payments ranging from $15 to $150 an acre under this year's version of the Market Facilitation Program for row crops, with rates varying widely by county and region.
Agriculture Department officials announced program details Thursday, including county-by-county payment rates. The rates are based on the mix of crops that each county historically produces as well as USDA's calculation of the impact on each commodity of unfair trade practices over the past 10 years.
Some of the largest per-acre payments will go to counties dominated by cotton production. Agriculture Secretary Sonny Perdue acknowledged that there were differences between counties and regions but said that basing payments on county rates was the fairest way to distribute the trade aid.
For a map of the county rates, click here.
“Aside from doing individual calculations on every producer in the country, there are going to be some misalignments probably in this program somewhere,” Perdue told reporters Thursday. “We spent hours and hours and hours trying to mitigate and reduce any disparities that were outstanding.”
The minimum and maximum levels, Perdue noted, were “an attempt to equitably distribute” the more than $14 billion in authorized direct payments to producers.
County rates are highest in areas where cotton is a staple crop such as Georgia and Texas and much lower across Corn Belt states in the Midwest. No counties in Ohio, Indiana, Illinois, Iowa, Nebraska, Minnesota, and the Dakotas have payment rates above $100 an acre, but Texas and Georgia have 35 and 51 respectively.
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USDA will also distribute minimum payments of $15 per acre to producers who planted cover crops on prevented planting land, but the amount of acres expected to qualify is not yet known.
The county payment rates are set for “non-specialty crops,” which USDA terms to be 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.
The chairman of the National Cotton Council, Alabama farmer Mike Tate, said that cotton futures prices have fallen by 30 cents per pound since the trade war with China began a year ago, costing producers about $250 an acre in revenue.
“No doubt that this downward price pressure is due in large part to cotton sales to China being substantially below the level that was expected in absence of tariffs,” Tate said. “On top of that, U.S. cotton has lost market share in China to Brazil and Australia, and pressure is building in the distribution chain as U.S. cotton exports lag and stocks build.”
Specialty crop and livestock producers will receive payments based on 2019 production. Dairy producers will receive $0.20 per hundredweight based on production history, hog producers will receive $11 per head based on a set inventory date between April 1 and May 15. Nuts – almonds, hazelnuts, macadamia nuts, pecans, pistachios, and walnuts, in this case – will receive $146 per acre, and cranberries, ginseng, sweet cherries, and table grapes will all receive payments based on pounds of production.
This year’s program also updates payment limit language for eligible producers and will allow a maximum of $500,000 to go to a single producer or legal entity across all three aspects of MFP with a $250,000 limit for a single phase of the program. The adjusted gross income limit barring program participation if an applicant’s AGI tops $900,000 also applies, but is waived if three-fourths of that income comes from agriculture.
Payments are expected to be begin in August with a potential second wave of checks in November and a third and final distribution in January. The second and third payments could be cancelled if the trade war with China is resolved.
The first check will include the greater amount of either the $15 minimum or 50% of the county’s payment rate. Whatever amount remains in each county can be distributed through the potential November and January payments.
MFP signup begins Monday and will run through Dec. 6.
MFP is one of three phases of the trade assistance package the Trump administration announced in June. In addition to the $100 million in Agricultural Trade Promotion funds announced last week, USDA also plans to spend up to $1.4 billion through the Food Purchase and Distribution Program to buy surplus commodities for donation to the nation’s food banks.
Through FPDP, USDA is set to buy more than $430 million worth of poultry, $200 million worth of pork, and $200 million worth of processed foods like pastas, sauces, and broths. Some other FPDP commodity amounts include beef ($151 million), citrus ($100 million), and apples ($88 million), and dairy ($68 million).
(Story updated at 12:40 p.m. to include additional information)
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