What is Holding up the 2nd MFP Farm Payment?
As low commodity prices persist and the trade war between the U.S. and China continues, many farmers are eager to hear positive news. What is holding up the second round of Market Facilitation Program payments? Will the details be announced before 2018 comes to a close?
When the Market Facilitation Program (MFP) was announced in the summer of 2018, USDA said payments to help farmers negatively impacted by ongoing trade disputes with China would be divided into two parts. In total, up to $12 billion was set aside for trade aid programs that payments to farmers and market development.
The application period for the first payment opened on September 4, 2018.
According to Undersecretary of Farm Production and Conservation Bill Northey, feedback from USDA office staff and farmers was largely positive regarding the simplicity of the process the first time around.
On October 29, Secretary of Agriculture Sonny Perdue confirmed there will be a second payment. Perdue said the rate will likely be the same as the first payment. More details were expected to be announced in the first week of December.
On December 11, sources said the second payment would be delayed after an increase in optimism that China would begin buying U.S. soybeans again.
At a press conference following a roundtable discussion with Iowa farmers and agribusiness leaders on December 14, Deputy Secretary of Agriculture Steve Censky assured concerned producers that USDA is pushing for the second round of payments to be made.
“We think that the justification is there for the second round. Farmers have still been impacted by the illegal retaliation,” he said.
Censky continued by explaining, “We have been having a little bit of a disagreement with a few others, our budget office within the government, the Office of Management and Budget. Of course, their job is to control spending and to say no. We’re saying the need is there, the circumstances haven’t changed.”
According to Censky, Perdue is planning to take the issue directly to President Trump. The deputy secretary declined to specify a timeline, but acknowledged farmers’ need for timely action. “We know that they’ve been impacted price-wise. We know that farmers are going to be starting to visit with their bankers, talking about financing for next year. The time is now to make that announcement and get those payments made.”
Reuters reported the meeting between Trump and Perdue could happen as soon as Friday.
The USDA confirmed the private sales of 1.13 million tons of U.S. soybeans to China on Thursday, but Censky says that amount is a “drop in the bucket compared to the 30 to 35 million tons that we regularly export to them.”
He added, “Even if we see some very much robust purchases well beyond the million metric tons, farmers have still been impacted.”