Tariff Aid Package Details announced by USDA

Today, the USDA announced the details of their assistance for farmers impacted by unjustified retaliation.  The Market Facilitation Program (MFP), established under the authority of the Commodity Credit Corporation (CCC) and administered by the Farm Service Agency (FSA), will provide direct payments to producers impacted by the trade dispute.  The payment rate is based on each individual producer’s actual production.  Producers may apply for the program beginning on September 4, 2018, but must wait until their 2018 harvest is complete.  Applications are available at www.farmers.gov/mfp, and can be submitted in person at the producer’s local FSA office, or by email, fax, or mail.

In order to be eligible, an applicant must:

1) have an ownership interest in the commodity,

2) be actively engaged in farming,

3) have an average adjusted gross income for tax years 2014, 2015, and 2016 of less than $900,000, and

4) must comply with the provisions of the “Highly Erodible Land and Wetland Conservation” regulation.

The USDA will issue payments in two parts.  Only the first part is guaranteed. The initial payment is calculated by taking the producer’s actual total 2018 production and multiplying it by the MFP rate for each specific commodity.  That total is then cut in half.  If CCC announces a second payment period, the remaining half of the producer’s total 2018 production will be multiplied by the second MFP payment rate. 

The payments are capped per person or legal entity at a combined $125,000. 

For existing dairy operations, the production history is established using the highest milk production marketed during the full calendar years of 2011, 2012, and 2013, and the operation must have been in operation on June 1, 2018 to be eligible.  Payment for hog producers are based off the total number of head of live hogs owned on August 1, 2018.

In addition to outlining the details of the MFP, the USDA provided background on the Food Purchase and Distribution Program and Agricultural Trade Promotion Program.  The USDA intends to purchase over $1.2 billion in various commodities including apples, apricots, beef, blueberries, cranberries, dairy, figs, grapefruit, grapes, hazelnuts, kidney beans, lemons/limes, lentils, macadamia, navy beans, fresh oranges, orange juice, peanut butter, pears, peas, pecans, pistachios, plums/prunes, pork, potatoes, rice, strawberries, sweet corn, walnuts, almonds, and sweet cherries. The USDA also intends to spend $200 million on a trade promotion program to target new markets.

Check Dickinson Law’s Iowa Agribusiness Law Blog for the latest on these programs. 

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.

- Emily Staudacher