Market Facilitation Program details released
Thursday, July 25, 2019
Posted by: Aaron Stauffacher, assoc. director of gov. affairs
Today, the U.S. Department of Agriculture released details of the $16 billion trade aid package announced in May. USDA is spreading the funds over three different programs with $14.5 billion in direct payments to farmers through the Market Facilitation Program (MFP).
Beginning on Monday, farmers will be able to sign up for the first direct payment. Subsequent payments may be scheduled for November and January if the USDA determines they are necessary. Farmers are encouraged to sign up as soon as possible. Signup ends Dec. 6.
Dairy payment rates are set at 20 cents per cwt and based on a farm’s historical production for the Dairy Margin Coverage (DMC) program.
A farm’s DMC milk production is calculated using the highest annual production during the 2011, 2012 and 2013 calendar years. Farmers who have not participated in DMC can still sign up. If a farmer was not farming during those three years, the payment will be calculated in the same way it would be if the farmer was newly signing up for DMC. Dairy farms must have been in operation on June 1, 2019, to participate. (First payment = $0.20 x 50 percent of total milk production).
Dairy farmers will also be eligible for other commodity payments. Please note USDA has expanded the list to include alfalfa hay, barley, canola, corn, millet, oats, rapeseed, rye, sorghum, soybeans, triticale, and wheat, among others. Unlike the previous payments, crop farmers will receive per-acre payments regardless of commodity. The payment will be based on a single county multiplied by a farm’s total plantings of eligible crops in total in 2019. Individual county rates can be found here.
The first payment for dairy and all other crops will be either 50 percent of a farmer’s payment or $15 per acre, whichever is higher. USDA is planning to make payments in mid-to-late August.
Farmers who filed prevented planting claims but then planted FSA-certified cover crops prior to Aug. 1 qualify for a $15/acre payment.
The direct payments are limited to $250,000 per person or legal entity for dairy farms and $250,000 for non-specialty crop farms per person or legal entity. No applicant can receive more than $500,000 in total MFP payments.
To be eligible, farmers must:
- Have an average adjusted gross income of less than $900,000 for tax years 2014, 2015 and 2016; OR derive at least 75 percent of their adjusted gross income from farming.
- Comply with highly erodible land and wetland conservation requirements.
- Have a farm number with USDA’s Farm Service Agency.
Applications will be available starting on July 29. More on MFP can be found here.
The second part of the aid package is the Food Purchase and Distribution Program though which $1.4 billion will be spent to buy food products and distribute them to food banks. Dairy food purchases will make up $68 million of the total.
For the third leg of the package, earlier this month USDA awarded the $100 million trade promotion program to 48 qualifying organizations. This program will help build long-term trading relationships and open market access for dairy products. Program recipients and more information can be found here.
Contact us with questions.
Associate director of government affairs