Hoeven seeks to fill in blanks on ag trade aid

Sen. John Hoeven, R-N.D., hosts a “roundtable” to describe a quickly-organized Market Facilitation Program, asking for input on areas that can still be improved to offset trade-related market declines. He also described impact of prevented-planting crop insurance and disaster program payments.

Farmers of Williams County who planted a non-specialty crop on the USDA’s list in 2019 are eligible for $17 an acre in trade aid, up to 2018 planted and prevented planted acres.

That’s $2 more per acre than neighboring farmers in McKenzie County and Richland County, Montana, but well behind the $57 a Cass County farmer will get.

Welcome to trade aid 2019, which has used an entirely different methodology than the 2018 Market Facilitation Program to spread out a subsidy intended to take the edge off of retaliatory tariffs.

The program’s design was geared toward avoiding undue influence on planting decisions. For that reason, the details of trade aid were withheld until after the spring planting season. The aid was also county-based, rather than commodity.

To create these county-specific payment rates, USDA looked at national-level price damage for each crop to set a payment rate for each commodity.

It then analyzed production of each commodity in each county. From that, total aid per county was determined, then divided by the number of acres of farmland in that county. Farmers receive that rate per eligible acre, regardless of the particular commodity they chose to plant in 2019.

Puzzling disparities, but welcome assistance

While the method has led to disparities that have puzzled some farm groups, most, nonetheless, welcomed the aid.

“The challenge with last year’s (Market Facilitation Program) was that a lot of folks were just flat out left out,” Matt Perdue told the Williston Herald.

He is a farmer from Ray, and also a representative of the National Farmers Union.

“So this time, the county payment rate is their attempt to ensure everyone is able to access some relief,” Perdue said. “It’s a recognition of how all our commodity prices are tied together in some shape or form, and that is why we think it is a more equitable program than we saw last year.”

NFU’s affiliate, North Dakota Farmers Union said the disparity isn’t something they understand.

“We’d like to know their methodology, too,” Communications Director Pam Musland told the Williston Herald.

NDFU President Mark Watne, however, emphasized that the aid is much-needed.

“This is everything Farmers Union has worked on for months,” he said in a press release. “When other groups were telling us payments wouldn’t happen, we stood up and said, ‘It has to happen.’”

Net farm income has dropped for a sixth consecutive year, Watne notes, and crop markets have been devastated by the ongoing trade war with China.

“If the trade war continues, this will be the beginning of payments farmers will need for survival,” Watne said. “This payment isn’t peanuts. It will make a difference.”

Long-term solutions needed

Perdue, meanwhile, said that long-term solutions are needed to address the oversupply of commodities, particularly if trading relationships are not restored soon.

That echoed comments by NFU President Roger Johnson in a media release.

“Many farmers didn’t even know what to plant this last spring because they couldn’t begin to anticipate what might be profitable come harvest,” Johnson said.

But even before the trade war, family farmers and ranchers were struggling.

“Chronic oversupply and slumping commodity prices have beleaguered the agricultural economy for six consecutive years, putting most operations in the red,” Johnson said.

While unstable markets and rapidly fluctuating prices that Johnson said were caused by recent trade policies have made matters worse, the package needed to include incentives for reducing production, to alleviate the chronic oversupply that has been dragging down prices for years.

“In the future we urge the administration to work more closely with Congress to build on the existing safety net and provide certainty and stability in farm country,” Johnson said.

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