By Sarah Everhart
This article is not a substitute for legal advice. See here for the site’s reposting policy.
One potential benefit to farmers from the federal government shutdown is the extended period of time farmers have to apply for the Market Facilitation Program (MFP). The original deadline for signing up for the MFP was January 15, 2019 but the deadline has now been extended, allowing the opportunity for more farmers to take advantage of the program.
In July 2018, Secretary of Agriculture Sonny Perdue announced the U.S. Department of Agriculture (USDA) would “act to aid farmers in response to trade damage from unjustified retaliation.” For example, on July 6 China imposed a 25% on imported U.S. soybeans. Given the large amount of U.S. grown soybeans typically purchased by the Chinese, this tariff and its after effects, have had a significant impact on U.S. soybean growers.
According to USDA, “President Trump directed Secretary Perdue to craft a short-term relief strategy to protect agricultural producers while the Administration works on free, fair, and reciprocal trade deals to open more markets in the long run to help American farmers compete globally.” In reaction to the directive, USDA established the MFP under the statutory authority of the Commodity Credit Corporation CCC Charter Act and designated the USDA’s Farm Service Agency (FSA) to administer the Program. The MFP provides payments to producers with commodities that have been significantly impacted by actions of foreign governments resulting in the loss of traditional exports.
Specifically, the MFP provides direct payments to eligible producers of soybeans, sorghum, corn, wheat, cotton, dairy, hogs, shelled almonds, and fresh sweet cherries. Eligible producers should apply after harvest is complete, as payments will only be issued once production is reported. Eligible applicants must have an ownership interest in the commodity, be actively engaged in farming, and have an average adjusted gross income (AGI) for tax years 2014, 2015, and 2016 of less than $900,000. Applicants must also comply with the provisions of the “Highly Erodible Land and Wetland Conservation” regulations.
For each commodity covered, the payment rate will be dependent upon the severity of the trade disruption and the period of adjustment to new trade patterns, based on each producer’s actual production. MFP participants will receive an MFP payment, based on the eligible production multiplied by the participant’s share multiplied by the MFP payment rate.The initial rate will apply to the first 50 percent of the producer’s total production of the selected commodity and second rate will apply to the remaining 50 percent of the producer’s production for the selected commodity.
Initial Rate Second rate($/unit)
Soybeans……………….bushel……………$1.65……………..$1.65 Sorghum………………..bushel……………$0.86……………..$0.86
Wheat……………………bushel……………$0.14……………..$0.14 Cotton…………………..pounds…………..$0.06……………..$0.06
Corn……………………..bushel……………$0.01……………..$0.01 Hogs…………………….per hog…………..$8.00……………..$8.00
Milk…………………hundredweight…….$0.12……………..$0.12
Shelled Almonds………pound…………..$0.03…………….$0.03
Fresh Sweet Cherries..pound……………$0.16………….. $0.16
For corn, cotton, sorghum, soybeans and wheat producers, MFP payments are capped per person or legal entity at a combined $125,000.
The original timeline for submission of an applicant for producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs was September 4, 2018-January 15, 2019. The government shutdown, however, which began December 22, 2018, subsequently caused FSA offices to be closed on December 28, 2018 and prevented farmers from filing MFP applications.
According to Secretary Perdue, USDA has decided to “extend the application deadline for a period of time equal to the number of business days FSA offices were closed, once the government shutdown ends.” On January 16, USDA announced some FSA offices would open on January 17, 18 and 22 for certain services. These announced days of limited staff availability during the shutdown will not constitute days open in calculating the extension. Farmers who want information about MFP, should go to https://www.farmers.gov/manage/mfp.