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FSA details terms of $12B initial tariff relief supports


Associate Editor

INDIANAPOLIS, Ind. — Plenty of farmers remember the USDA announcing the Trump administration would authorize $12 billion in direct payments to and market assistance for farms, to counter losses from retaliatory tariffs by other countries on agricultural exports in 2018.

But they may not know details are finally coming out about this federal Commodity Credit Corp. (CCC) funding. Last Thursday, USDA Farm Service Agency (FSA) Executive Director for Indiana Steve Brown hosted a short training session for other USDA employees about the Market Facilitation Program (MFP) payout, to prepare them for farmers beginning to sign up this week.

First, “This is a trade program; this is not a disaster program,” he said.

It is not for failed crops, like crop insurance; it is not for losses to wildfires or other natural disasters like in other states this year – MFP does not impact, nor is it impacted by, any payments for those. MFP payments also do not count against other 2014 farm bill payment limitations.

MFP is $4.7 billion worth of direct payments to producers of seven commodities the government has determined most affected by export tariffs this year. The rate set for each commodity will be paid on half the crop owner’s 2018 actual production; Brown said a second decision about payout on the remaining 50 percent will be made in early December.

The current crop rates per bushel are:

•Soybeans, $1.65 ($3.63 billion estimated payout nationwide)

•Sorghum, 86 cents ($156.8 million)

•Wheat, 14 cents ($119.2 million)

•Corn, 1 cent ($96 million)

•Cotton, 6 cents per pound ($276.9 million)

A simple example: Brown said if a grower harvests 100 bushels of soybeans, they could sign up to receive $82.50 ($1.65 X 50 bushels) for that crop alone. There is a cap of $125,000 per claimant for all combined eligible crops.

Dairy and hog producers are similarly eligible for MFP, but Brown said the government determined beef prices have not been affected by tariffs. The rate for milk is 12 cents per cwt. ($127.4 million estimated payout nationwide) and hogs, $8 each ($290.3 million).

Eligible dairy operations must have been in operation on June 1, and eligible live hogs were those owned on August 1. There is also a cap of $125,000 per claimant on all combined eligible dairy and hogs, separate from the crops cap.

FSA Price Support Disaster Chief Specialist Susan Houston noted the caps apply to each person – if a farmer signs up more than once because they are an owner in partnerships or companies, USDA will “count the warm bodies” to impose individuals’ caps.

There are other eligibility requirements, such as not having over $900,000 of adjusted gross income for tax years 2014-16, meeting FSA conservation regulations and actually owning the commodity (as opposed to farmers raising what another party owns).

Individual crops are subject to requirements too. They must be for grain; seed corn and beans are not eligible, nor is silage.

Since the MFP payments are not “first come, first served,” a producer can wait until they have all their proper documentation to sign up, or they can initiate the process now. If a grower wants to be paid for their 2018 wheat and soybeans, for instance, they could apply for a wheat payment now and soybean payment after the fall harvest – or just do it all at once after the bean harvest.

Brown noted some producers don’t want their MFP payment in 2018, for tax purposes – and that’s fine. The deadline to sign up is Jan. 15, 2019. He does not know how long it will take to receive payment after submitting the necessary paperwork, but thinks it would be within 30 days.

Houston warns farmers to make sure their necessary production certification is in order, since this is a high-profile program and claims may be subject to audits or spot checks. “We will not accept your shoebox full of ‘documentation,’” she said.

Brown urges county FSA directors to hold public meetings for their local farmers to answer questions and make the process easier on their employees, too.