The U.S. Department of Agriculture has authorized up to $12 billion in a “Trade Retaliation Mitigation” (farm tariff) aid package for 2018. The program came about to help offset the financial impacts resulting from ongoing trade disputes with China, Mexico, Canada and other countries. The aid package will include direct payments to producers of affected farm commodities, purchases of surplus commodities for food and feeding programs, and trade promotion programs. The financial aid package will be administered in a manner that is consistent with World Trade Organization requirements.

The USDA aid package will be implemented in 2018 and will include three components:

Direct payments to farmers — USDA will provide direct aid payments under the “Market Facilitation Program” to producers of  soybeans, corn, sorghum, wheat, cotton, hogs and dairy. The MFP program will be administered under the USDA Commodity Credit Corporation through local Farm Service Agency offices. The MFP payments will be made in two phases, with the first payments to begin after Sept. 4. Total allocation for the first phase of the MFP program is approximately $4.7 billion.

Purchase of surplus commodities USDA will purchase excess 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.

Agricultural Trade Promotion Program The ATPprograms will be administered by USDA’s Foreign Agriculture Service, with the goal of securing new agriculture trade relations and agreements in the future. Approximately $200,000 has been allocated for ATP programs.

Details for the Market Facilitation Program

The sign-up period will begin on Sept. 4 and continue through Jan. 15, 2019. MFP applications can be made at local FSA offices or can be submitted to FSA offices electronically.

To be eligible for MFP payments, a producer’s adjusted gross income may not exceed $900,000, the producer must meet FSA requirements for 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.

Crop producers requesting MFP payments must have a 2018 crop acreage report on file at their local FSA office. Application for MFP program can be made once they have completed their 2018 harvest and submit the MFP application form, which includes the method of production verification.

FSA will be doing spot-checks to verify crop production levels, so be sure to keep verification records on file. Acceptable crop production verification methods will be similar to other required yield verification through FSA or federal crop insurance. Be sure to not co-mingle 2018 grain production with previous years, prior to verifying the 2018 production levels. If there are questions on verification of crop production, it is advisable to check with the local FSA office.

Payments for dairy producers will be based off the historical milk production levels which have been reported to FSA offices under the Margin Protection Program. 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 Aug. 1. 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 Sept. 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. Details on the second MFP payments (if they occur) will be announced by USDA in December.

FSA offers the following suggestions to expediate the MFP sign-up process: Hog and dairy producers are encouraged to apply in September before crop harvest is completed. Crop producers are encouraged to apply one time for all crops after harvest is completed.Producers are encouraged to make MFP application online (web address below), using Form CCC-910. Producers do not need to supply production information when they apply for the MFP program. However, they should keep records on file for FSA spot-checks.

The MFP application form (CCC-910), a MFP fact sheet, and other very useful application tips for the program are available on the USDA web site at: www.farmers.gov/MFP.

 

Kent Thiesse is a government farm programs analyst and a vice president at MinnStar Bank in Lake Crystal, Minn. He may be reached at (507) 726-2137 or kent.thiesse@minnstarbank.com.