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FAQs: Perdue addresses Market Facilitation Program payments and ‘prevent plant’ policy

Progressive Dairyman Editor Dave Natzke Published on 11 June 2019

In late May, U.S. Secretary of Agriculture Sonny Perdue announced the USDA would roll out a three-pronged aid package aimed at helping U.S. farmers suffering financial damages due to ongoing trade disputes.

The package includes direct payments to farmers under the Market Facilitation Program (MFP), the purchases of surplus commodities for food banks and other nutrition programs under the Food Purchase and Distribution Program, and funds to develop new export markets under the Trade Promotion Program. (Read: USDA announces new farmer aid package to offset impact of tariffs, dairy details yet to come.)

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The biggest piece of the $16 billion package is the MFP, earmarked for $14.5 billion. But specifics regarding direct payments to dairy producers have yet to be released, and crop producers are still asking questions during a difficult planting season.

On June 10, Perdue pledged additional information in the coming weeks, and the USDA also posted a set of frequently asked questions regarding the USDA Risk Management Agency’s “prevented planting” policy and how it impacts MFP payments (see below).

Perdue said the USDA was not legally authorized to make MFP payments to producers for acreage that is not planted, but was still exploring “legal flexibilities” to provide a minimal per acre MFP payment to producers who filed “prevent plant” and chose to plant an MFP-eligible cover crop, with the potential to be harvested and for subsequent use of those cover crops for forage.

Efforts are ongoing on a couple of fronts to create both cropping and livestock feeding flexibility. In Congress, a proposal called the Feed Emergency Enhancement During Disasters Act (FEEDD Act) to give farmers and ranchers additional emergency flexibility to help alleviate feed concerns. The FEEDD Act would give the USDA emergency waiver authority to allow for haying, grazing or chopping of a cover crop before Nov. 1 in the event of a feed shortage due to excessive moisture, flood or drought without producers taking a further discount on their crop insurance.

Also, citing a “rapidly emerging forage crisis for livestock farmers across the Midwest,” a multistate coalition of agricultural organizations submitted a written request to the USDA, seeking approval for emergency provisions allowing the planting and harvesting of forages on prevented plant acres without date restrictions. (Read: Efforts underway to head off a looming ‘forage disaster.’)

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Frequently asked questions

1. What is the purpose of the Market Facilitation Program? What is the legal authority?

The Market Facilitation Program (MFP) assists farmers with the additional costs of adjusting to disrupted markets, dealing with surplus commodities, and expanding and developing new markets at home and abroad, consistent with the authorities of the Commodity Credit Corporation (CCC) Charter Act.

2. Last year, soybeans had the highest MFP payment per bushel; should I plant soybeans this year to get the highest payment if I have the opportunity?

You should plant what works best for your operation and what you would plant in any other year, absent any assistance from the USDA. 2019 MFP assistance is based on a single county payment rate multiplied by a farm’s total plantings to the MFP-eligible crops (outlined below) in aggregate in 2019. Those per-acre payments are not dependent on which of those crops are planted in 2019 and, therefore, will not distort planting decisions. Your total payment-eligible plantings cannot exceed your total 2018 plantings.

2019 MFP-eligible nonspecialty crops are alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, millet, mustard seed, dried beans, oats, peanuts, rapeseed, rye, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, triticale, upland cotton and wheat.

2019 MFP-eligible specialty crops are tree nuts, fresh, sweet cherries, cranberries and fresh grapes.

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3. My fields never dried out enough to get any crop in, do I get a 2019 Market Facilitation Program payment?

No, the USDA does not have the legal authority to make MFP payments to producers for acreage that is not planted. To qualify for a 2019 MFP payment, you must have planted a 2019 MFP-eligible crop. Producers unable to plant their crop should work with their crop insurance agent to file a claim.

4. I filed a prevented planting claim, and I am going to plant a cover crop to prevent erosion; does that count for 2019 MFP if it’s on the 2019 MFP-eligible list you announced in May?

If you choose to plant a cover crop with the potential to be harvested, because of this year’s adverse weather conditions, you may qualify for a minimal amount of 2019 MFP assistance. You must still comply with your crop insurance requirements to remain eligible for any indemnities received.

5. I heard that I could get 90% of my crop insurance guarantee as a prevented planting payment through the disaster bill, is that true?

The Additional Supplemental Appropriations for Disaster Relief Act of 2019 gives the USDA the authority to compensate losses caused by prevented planting in 2019 up to 90%. While the authority exists, the USDA must operate within finite appropriations limits. It is highly unlikely that the supplemental appropriation will support that level of coverage in addition to crop insurance. Congress appropriated $3.005 billion in assistance for a wide array of losses resulting from disasters throughout 2018 and 2019, requiring the USDA to prioritize how it is allocated. The department plans to provide assistance on prevented planting losses within the confines of our authority.

6. If I plant a second crop or cover crop, can I still get my full prevented planting payment? What about an MFP payment?

You must comply with crop insurance requirements to remain eligible for a full prevented planting indemnity. The USDA encourages you to visit with your crop insurance agent to ensure you are aware of those various options for your operation. If you choose to plant a cover crop with the potential to be harvested, because of this year’s adverse weather conditions, you may qualify for a minimal amount of 2019 MFP assistance.

7. I have heard that only acreage in a declared disaster area will qualify for prevented planting under the Disaster Relief Act. Is that true?

The USDA is currently evaluating the new authority provided under the Additional Supplemental Appropriations for Disaster Relief Act of 2019. However, it is generally true that producers with qualifying losses in a secretarial- or presidentially declared disaster area will be eligible for Disaster Relief Act assistance. Producers with qualifying losses outside of those areas will have eligibility determined on a case-by-case basis.

8. I have a revenue protection policy with a ‘harvest price option,’ do I get the higher of the projected price or harvest price for my prevented planting payment?

The Additional Supplemental Appropriations for Disaster Relief Act of 2019 gives the USDA the authority to compensate losses caused by prevented planting in 2019 and also provides additional authority to compensate producers on the higher of the projected price or harvest price. The USDA is currently exploring legal flexibility to provide assistance that better utilizes the harvest price in conjunction with revenue and prevent planting policies.

9. If I am prevented from planting but manage to get a cover crop or a forage in the ground, am I able to hay or graze that prior to Nov 1, given the forage shortage we’re going to experience?

The USDA encourages you to visit with your crop insurance agent to ensure you are aware of those various prevented planting, cover crop and harvest options for your operation. The USDA is currently reviewing the prevented planting restrictions in the Federal Crop Insurance Act to determine what options may be available to address this and other issues. Further clarity regarding this haying and grazing date will be forthcoming.

10. What if I don’t have crop insurance? How do MFP and disaster relief programs work for me if I’m prevented from planting due to natural disasters?

Crop insurance is not required to qualify for 2019 MFP assistance. However, the USDA requires that a producer plant a 2019 MFP-eligible crop to qualify for the 2019 MFP assistance.

If you choose to plant a cover crop with the potential to be harvested, because of this year’s adverse weather conditions, you may qualify for a minimal amount of 2019 MFP assistance.

The Additional Supplemental Appropriations for Disaster Relief Act of 2019 gives the USDA the authority to compensate losses caused by prevented planting in 2019. Producers with qualifying losses in a secretarial- or presidentially declared disaster area will be eligible for Disaster Relief Act assistance. Producers with qualifying losses outside of those areas will have eligibility determined on a case-by-case basis.  end mark

Dave Natzke
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