The U.S. Department of Agriculture (USDA) announced yesterday that President Donald Trump has authorized $16 billion in programs to be spent toward assisting agricultural producers affected by retaliatory tariffs on U.S. agricultural goods.
Specifically, Commodity Credit Corporation (CCC) Charter Act authority will be used to implement a $1.4 billion Food Purchase and Distribution Program (FPDP) to purchase surplus commodities – including poultry – affected by trade retaliation. The Agricultural Marketing Service will administer this program. The purchases will be distributed by the USDA’s Food and Nutrition Service (FNS) to food banks, schools and other outlets serving low-income individuals.
Additionally, CCC Charter Act authority will be used to authorize $100 million for the Agricultural Trade Promotion Program (ATP) to assist in developing new export markets on behalf of producers. The Foreign Agricultural Service (FAS) will administer this program.
CCC Charter Act authority will also be utilized by the Farm Service Agency (FSA) to administer the Market Facilitation Program (MFP), which will provide $14.5 billion in direct payments to producers. Commodities covered will include soybeans, corn and feed grains.
Payment rates would be based on historical plantings at the county level, resulting in a single rate by county for commodities covered by the program. The payments will be made on a per acre basis, decoupled from actual 2019 planting in an effort to not distort planting decisions. Total payment-eligible plantings may not exceed planting totals from the 2018 planting season.
The previous $12 billion trade aid package included MFP payments calculated on a per bushel basis for the first 50 percent of production at the farm’s proven yield. The rates were $1.65 per bushel for soybeans and 1 cent per bushel for corn, effectively providing a payment of $0.825 per bushel of soybeans and $0.005 per bushel of corn.
The original MFP payments for grain and oilseeds were subject to a payment limit of $125,000, but MFP payments did not count against the payment limit under the Ag Risk Coverage (ARC) and Price Loss Coverage (PLC) programs under the farm bill. USDA will release further details regarding eligibility and payment rates under this year’s program at a later date.
Payments will be made in up to three tranches, with the second and third tranches evaluated as market conditions and trade opportunities dictate. The first tranche will begin in late July/early August as soon as practical after FSA crop reporting is completed by July 15th. If conditions warrant, the second and third tranches will be made in November and early January.
