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MFP 2.0 Makes Prevent Plant Decisions Even More Difficult


On Thursday USDA announced a few details of the 2019 Market Facilitation Program (MFP). While the program has been expanded to include several crops not included in the 2018 aid, farmers will only be paid on crops planted, which makes already fraught prevent plant crop insurance decisions all that more difficult.

The MFP plan for non-specialty crops includes one single payment rate per county. According to Undersecretary Bill Northey, USDA Chief Economist Rob Johansson and his team will assess trade damage to each county as well as historical production data and will use that information to calculate a single payment rate for all crops covered.

Farmers will only be paid for crops planted, Johansson confirmed on a Thursday morning call with reporters. Which economists say makes prevent plant insurance decisions extra tricky.

“If I am reading it right, prevent plant (PP) acres will not be eligible for any MFP payments.  So, what if Mother Nature pushes planting past crop insurance prevent date?  I wanted to plant corn but I literally could not and so cannot get the payment on my PP corn acres,” University of Illinois ag economist Scott Irwin tweeted adding it seems really unfair when prevented planting is not the farmer’s fault.

Farmers expressed their prevent plant concerns on Twitter too:

Jim Smith PH.D.@JimSmith87

Regardless of the rhetoric from USDA this announcement will affect planting and PP decisions.

Top Third Ag🇺🇸@TopThird

Ken Smithmier@SouthTradr

Anna-Lisa Laca@AnnaLaca1

Our understanding is that payments will not be based on 19 yields…. they will be based on total planted acres in the county.

Jeff Caldwell@jeffacaldwell

Seems like that’s worse in some ways. Say my county gets 7 inches of rain in the last 7 days I can plant corn and I have no other choice than to file a PP claim…how does what I did render me ineligible for MFP assistance? Makes no sense.

‘The Professor’ Moritz@6ColumnGuy
Scott Irwin@ScottIrwinUI

1. I’m just gonna say it. I think it is inexcusable that the USDA did not announce the payment rates. Clearly, USDA is trying not to influence planting decisions but someone wants the political glory of helping farmers while leaving out a critical detail. https://twitter.com/kannbwx/status/1131593610149781505 

Scott Irwin@ScottIrwinUI

I understand that logic. But you are impacted in theory if you intended to plant the affected crop but an act of God prevented it. Basic fairness issue relative to narrow trade mitigation perspective. I think this will be a big issue

As expected, criticism of the plan poured in following its announcement. House Agriculture Livestock and Foreign Agriculture Subcommittee Chairman Jim Costa (D-Ca.) called the aid a poorly planned bailout.

“For more than a year now, producers of every commodity have said the same thing: they want long-term access to export markets, not hasty attempts by the federal government to clean up its own mess,” he said in a statement. “Rather than waste more time and resources on temporary band-aids, USDA should focus on implementing the safety net Congress established in the farm bill. I urge the White House to rescind the tariffs and sit down in a constructive manner with the Chinese to address issues that will actually improve the market for our farmers. This just shows, as I’ve long said, nobody wins a trade war—everyone has leverage.”

While many voiced frustrations about payment rate announcements being delayed, the Illinois Corn Growers Association applauded that move.

“We feel that the Trump Administration took prudent action today in holding off on announcing specific payment amounts to farmers in the planned second round of trade aid payments. Illinois corn farmers are significantly behind in planting their crop this year.” llinois Corn Growers Association President Ted Mottaz said in a statement. “As we move toward turning the calendar from May to June, the decisions about what to plant and when are complicated enough. Adding a specific monetary figure in a trade-aid payment to the mix is a variable that likely would cause significant market implications.”

USDA’s intent was to ensure acreage mixes aren’t altered by MFP payments and the details are so murky, most farmers have no idea what to do.

Chip Flory@ChipFlory

I’m not saying that at all. That is a producer’s decision. I’m just saying that 2019 acres are not capped at 2018 acres.

Ryan Wagner@wagner_farms

My new hot take that I just developed five seconds ago is that this is so confusing it may not impact acres after all

David Widmar@davidwidmar

Another feature: the math to calculate a farms payments will be so complicated it’ll be impossible to distort planting decisions.

Meghan Vick@MeghanVick

Details on a 2nd round of MFP payments are expected this afternoon. Our sources indicate the program will be based on 2019 plantings (not to exceed 208 plantings) with a single county payment rate. More details here: https://www.profarmer.com/markets/policy/16-billion-mfp-2-package-coming-county-payment-rate-likely #pfnews #MFP2 #agnews

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Source: Anna-Lisa laca, Farm Journal

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