Details about the next round of trade-aid payments through the Market Facilitation Program (MFP) have been scarce. There’s a lot to figure out. Due to the extremely wet spring, many farmers aren’t able to plant this year. As the MFP stands, trade-aid payments can only go out to farmers that plant. The USDA is working on a way to work around this problem that would allow farmers with prevented plant acres to receive a small amount of compensation through MFP.
MFP Details Scarce
John Herath of Farm Journal Media reported that President Trump traveled to Iowa this week to talk about the administration’s plan to allow year-round sales of higher ethanol blends. Although many people are eager to hear what Trump had to say, they’re are also hoping that Trump will provide some clarification about the next round of trade-aid payments. The administration has announced that they will be offering $13 billion in trade-aid payments to farmers under the umbrella of the MFP, but details beyond that have been scarce.
The situation has grown even more complicated, as many farmers in the Midwest won’t be planting this year. Wet conditions and flooding have forced millions of prevented plant acres. As it stands, MFP payments will only go to farmers who plant.
USDA is Looking into Options to Help Prevented Plant Acres
Ag Secretary Sonny Perdue has said that the USDA will provide more information about MFP payment rates and details of the disaster relief legislation in the next couple of weeks. It’s clear the USDA sees the problem though, and Perdue is making it sound like they are looking for a way to address it.
“The USDA is not legally authorized to make Market Facilitation Program payments to producers for acreage that is not planted.”
But there might be a way around this problem- cover crops. Perdue went on,
“We are exploring legal flexibilities to provide a minimal per acre market facilitation payment to folks who filed prevent plant and chose to plant an MFP-eligible cover crop, with the potential to be harvested and for subsequent use of those cover crops for forage.”
If farmers choose to plant a cover crop that can be harvested, they might qualify for a small amount of MFP assistance. Farmer will still have to comply with crop insurance requirements to be eligible.
There are many crops that double as covers and would be eligible for MFP: alfalfa hay, barley, oats, barley and rye. Many are wondering if they’ll be able to hay or graze their covers before November 1 though, because a forage shortage is anticipated. The USDA says they’re taking another look at those restrictions, and hope to clarify things soon.
Covers on Prevented Plant Acres
A coalition of Ag organizations from multiple states have implored Perdue to provide an emergency provision that would allow planting and harvesting of forages on prevented plant acres without date restrictions.
US Senators have also joined in. John Thune, (R-SD) and Dick Durbin (D-IL) led a bipartisan group of their colleagues to try and urge the USDA to clarify the cover crop guidelines. They also asked that haying and grazing of cover crops on prevent plant acres be allowed earlier than the current USDA-mandated November 1 harvest date.
In some of the northern states, November 1 is too late in the season to successfully graze and harvest forage crops. The rules as they stand discourage farmers from planting cover crops on their prevent planted acres. An earlier date would be extremely helpful for those thousands of farmers that were forced to take prevent planted acres this year, and it will also help protect those bare fields from erosion.
Act as Though There is No Trade-Aid
Karl Plume of Successful Farming says that up to this point the USDA has offered only a few details about trade-aid payments. There will be some sort of per-acre payment structure and a list of crops that farmers must plant in order to qualify.
Chris Clayton of DTNPF says that the USDA is trying hard to temper aid expectations. If some MFP aid becomes available for cover crops on prevented plant acres, they are urging farmers to plant what works the best for their individual operations, and continue to do what they usually do every other year. To act as though there is no trade-aid.
The 2019 MFP payments will be based on a single county payment rate and multiplied by the farm’s eligible crops.
The payments “are not dependent on which of those crops are planted in 2019, and therefore will not distort planting decisions,” USDA stated.
A full list of the eligible crops includes: alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, mustard seed, dried beans, oats, peanuts, rapeseed, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, upland cotton, and wheat.
Authority to Compensate for Prevented Planting?
Clayton says that the USDA does have the authority to compensate prevented planting losses. However, there are appropriation limits and it’s fairly unlikely that there will be high levels of coverage in addition to crop insurance. They also have the authority to allow the “harvest price option.” This week the USDA said it,
“Is currently exploring legal flexibility to provide assistance that better utilizes the harvest price in conjunction with revenue and prevent-planting policies.”
If You Don’t Have Crop Insurance…
Farmers without crop insurance must still plant a crop to be eligible for MFP payments. Those that plant cover crops might be eligible for a minimum amount of assistance. If you don’t have insurance and farm in one of the secretarial or presidential disaster areas, you can still get compensation for prevented planting losses under the disaster bill umbrella. Those outside the disaster zones will only be considered for that compensation on a “case-by case” basis.
