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New Farm Program Available to Counter Tariff Effects

by David Bau, Extension Educator

U.S. Secretary of Agriculture Sonny Perdue announced details of actions the U.S. Department of Agriculture (USDA) will take to assist farmers in response to trade damage from unjustified retaliation by foreign nations.  The USDA will authorize up to $12 billion in programs, consistent with our World Trade Organization obligations.  These programs will assist agricultural producers to meet the costs of disrupted markets. The USDA aid package will be implemented in 2018 and will include three components:
  • USDA’s Farm Service Agency (FSA) will administer the Market Facilitation Program (MFP) to provide direct payments to farmers for corn, cotton, dairy, hog, sorghum, soybean, and wheat producers starting September 4, 2018. Total allocation for phase 1 of the MFP program is approximately $4.7 billion, plus a similar amount for phase 2, if all payments are allocated.
  • USDA’s Agricultural Marketing Service (AMS) will administer a Food Purchase and Distribution Program to purchase up to $1.2 billion in commodities unfairly targeted by unjustified retaliation such as pork, beef, dairy products, rice, fruits, vegetables, nuts, and other ag products for distribution to school nutrition programs, food banks and other outlets. Approximately $1.3 billion has been allocated for these commodity purchases.
  • Through the Foreign Agricultural Service’s (FAS) Agricultural Trade Promotion Program (ATP), $200 million will be made available to develop foreign markets for U.S. agricultural products. The program will help U.S. agricultural exporters identify and access new markets and help mitigate the adverse effects of other countries’ restrictions.
The sign-up period began on September 4, 2018 and continues through January 15, 2019. MFP applications can be made at local FSA offices, or can be submitted electronically to FSA offices via scanning, e-mail, or fax. Crop producers can apply for the MFP program once they have completed their 2018 harvest and can verify their production bushels.  Crop producers requesting MFP payments must have a 2018 crop acreage report on file at their local FSA office. Acceptable crop production verification will be similar to other required yield verification through FSA or federal crop insurance.

Commodity Initial Payment Rate Est. Initial Payment** (in $1,000s)
Cotton $0.06 / lb. $276,900
Corn $0.01 / bu. $96,000
Dairy (milk) $0.12 / cwt. $127,400
Pork (hogs) $8.00 / head $290,300
Soybeans $1.65 / bu. $3,629,700
Sorghum $0.86 / bu. $156,800
Wheat $0.14 / bu. $119,200
Total $4,696,300

To be eligible for MFP payments, producers must meet FSA requirements for adjusted gross income and “actively engaged” in farming, as well as wetland and conservation requirements. Total MFP payments to producers for all grain crops will be capped at a combined $125,000 per person or legal entity. Similarly, total livestock payments for hogs and dairy will also be capped at $125,000. MFP payments will not count against other farm program payment limits. Eligible applicants must have an ownership interest in the commodity, be actively engaged in farming, and have an average adjusted gross income (AGI) for tax years 2014, 2015, and 2016 of less than $900,000.

Payments for dairy producers will be based off the historical milk production levels that have been reported to FSA offices under the Margin Protection Program (MPP) for dairy producers, and dairy producers must have been in operation on June 1, 2018.  Payments to hog producers will be on a per head basis and will be based on the number of hogs owned on August 1, 2018. Production records for hogs will include breeding records, inventory record, sales receipts, rendering receipts, and veterinary records.

The first payment will be 50 percent of the calculated payment, based on the payment formula. The first payments to producers will be made after September 4, once the production information has been verified by FSA.  USDA will determine later if there will be a second payment and what the payment level will be, which will be paid on the remaining 50 percent of the 2018 production levels. The second MFP payment details will be announced by USDA in December, 2018.  The formula for the first payment will be bushels (grains), head (hogs), or pounds (milk), times the payment rate for each commodity, times 50 percent.

More information, a MFP fact sheet, and other useful MFP application tips are available on a special USDA web site at:

Background on Market Facilitation Program:
MFP is established under the statutory authority of the Commodity Credit Corporation (CCC) and administered by FSA. For each commodity covered, the payment rate will depend upon the severity of the trade disruption and the period of adjustment to new trade patterns, based on each producer’s actual production.

Interested producers can apply after harvest is 100 percent complete and they can report their total 2018 production. MFP applications will be available online at Producers will also be able to submit their MFP applications in person, by email, fax, or by mail.

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