When the Department of Agriculture changed the way it distributed Market Facilitation Program payments for the 2019 edition of the program, it also changed where a good chunk of the payments were going.
According to an Agri-Pulse analysis of payment rates for nearly 3,000 counties in the United States, the areas with the highest payment rates are regions with heavy cotton and sorghum production. The Corn Belt states in the Midwest — which were big beneficiaries of the 2018 program — are looking at payment rates falling in the meaty part of the bell curve.
Under the program, growers will receive a set payment rate for acres of production in a specific county. USDA’s analysis of the trade war’s impact on that individual county informed the payment rate assigned to it, officials say, with more disproportionately affected areas receiving higher payment rates.
USDA developed estimates of how much each commodity has been affected by tariffs imposed by other countries and those estimates were then used to calculate the payment rate for each county based on the mix of commodities historically grown there. USDA has not released the data and analysis underlying the estimates of commodity trade impacts, including the list of countries whose tariffs were factored into the calculations.
A department spokesman said Friday that the Office of the Chief Economist is writing an explanation of the trade damage analysis that will clarify the county payment rate calculations. The document should be available in a few weeks, the spokesman said.
For a larger version of the map above, click here.
Payments will range between a minimum — $15 per acre — and maximum — $150 per acre — amount.
Only 22 counties in the United States will receive the maximum payment: Five counties each in Alabama, Georgia, and Texas; Three counties in Mississippi and Arizona, and one county in New Mexico.
Nearly 400 counties across the country will receive the minimum $15 per acre payment.
There also will be variations in payments within many counties because farmers who planted cover crops on prevent plant acres will receive the $15 minimum payment on that land. Prevent plant acreage that isn't planted to a cover crop will not qualify for any MFP payment.
Georgia Agriculture Commissioner Gary Black welcomed the payments. "This substantial effort is very encouraging, and we believe that it will greatly benefit all of our Georgia producers, especially our pecan, peanut and cotton growers," he said.
Payments to the Midwest will be substantial, too, despite the lower rates. University of Illinois economist Scott Irwin estimated that payments in his state will total $1.4 billion. "Big boost to bottom lines!" he said in a tweet.
Iowa farmer Wayne Fredericks, a board member of the American Soybean Association, said Thursday that he was satisfied with the package after a briefing by Bill Northey, USDA’s undersecretary for farm production and conservation. The meeting “gave me confidence that they were trying to be very fair,” Fredericks told Agri-Pulse. “They were trying to really identify groups that were hurt, so I’m not going to argue with that fact.”
Under the 2018 version of MFP, payments were based on actual production of certain commodities. The highest payment rate by far, $1.65 per bushel, was for soybeans. The rate for corn was one cent per bushel. For wheat the rate was 14 cents per bushel. Cotton growers received six cents for every pound they produced.
The non-specialty crops eligible for payments under the 2019 MFP 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.
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