USDA WORKS TO
OFFSET UNFAIR
TARIFF LOSSES Market
Facilitation
Program Will
Provide Assistance
To Ohio Farmers
A USDA IS IN THE MARKET
TO BUY
thriving agriculture industry doesn’t just
positively impact the local population, it
leaves a lasting impression on the world.
Agriculture has been a way of life for
American families for generations. And if we
were to shift our gaze to our own backyard, we
would see that of the 2 million farms identified
nationwide in 2017 by Statista, about 73,200
are located here in Ohio. When farmers were
targeted by “unfair retaliatory tariffs” earlier
this year, Secretary of Agriculture Sonny
Perdue and the USDA got to work. Under the
direction of President Trump, they formulated
a “strategy to mitigate the trade damages
sustained by our farmers.”
The USDA announced details of its short-term
efforts to help agricultural producers meet
the costs of disrupted markets. The USDA,
according to a press release, will authorize up
to $12 billion in programs, including:
•
•
•
The Market Facilitation Program,
which will provide incremental
payments to soybean, sorghum, corn,
wheat, cotton, dairy and hog producers
in an effort to help manage disrupted
markets, deal with surplus commodities
and expand and develop new markets.
The Food Purchase and Disruption
Program, which will work with the
Agricultural Marketing Service to
purchase unexpected surplus of affected
commodities such as fruits, nuts,
rice, legumes, beef, pork and milk for
distribution to food banks and other
nutrition programs.
Agricultural
Trade
Promotion
Program, which will help develop
new export markets for American farm
products.
“Unfortunately, America’s hard-working
agricultural producers have been treated
unfairly by China’s illegal trading practices
and have taken a disproportionate hit when it
4
Rise & Shine • Fall 2018
comes to illegal retaliatory tariffs,” explained
Secretary Perdue. These programs will “help
ensure our nation’s agriculture continues
to feed the world and innovate to meet
the demand.”
MARKET FACILITATION
PROGRAM BENEFITS
According to the USDA, payment rates that
result from the Market Facilitation Program
will be determined by the severity of the
trade disruption and the period of new trade
patterns, based on each producer’s actual
production.
To apply for assistance, your harvest must be
100 percent complete, and you must:
•
•
•
Have an ownership interest in the
commodity being produced.
Be actively engaged in farming.
Have an average adjusted gross income
for tax years 2014, 2015 and 2016, of
less than $900,000.
Those who qualify for the program will
receive an advance payment of 50 percent of
the final production multiplied by the rate for
each crop or commodity:
Crop/Commodity
Amount Est. Total Payout
Cotton 6¢ / lb $277 million
Corn 1¢ / bushel $96 million
Dairy 12¢ / 100 weight $127 million
$290 million
Pork $8 / head Soybeans $1.65 / bushel $3.6 billion
Sorghum 86¢ / bushel $157 million
Wheat 14¢ / bushel $119 million
Most funds will be paid after November
when harvests are complete. Dairy producers
will receive payment based on their highest
milk production history for 2011-13. Hog
producers will receive payment based upon
the number of hogs they had on hand as of
Aug. 1, 2018.
In addition to using the Market Facilitation
Program to help make producers whole as a
result of the Chinese tariffs, the USDA will
purchase more products to provide food
assistance to those in need.
The products will be purchased through the
Food Purchase and Distribution program in
four phases to allow for timely transactions
and distribution to nutrition assistance
programs, including the National School
Lunch Program. Around $1.4 billion will be
spent on a variety of fresh products, including:
almonds, apples, beef, cranberries, dairy,
grapes, kidney beans, navy beans, pears, peas,
pork, potatoes, strawberries, sweet cherries,
sweet corn and walnuts and more.
Naturally, the USDA is working to expand its
pool of vendors. In addition to reaching out
to USDA agents, there are resources available
online. You can learn more at www.ams.usda.
gov/selling-food/becoming-approved.
NEXT STEPS
While you might not be able to benefit from
any of these programs this very second, it’s
important to be aware that they exist, so
the minute you wrap up your harvest, you
can apply for funds. Those who are dairy
farmers, on the other hand, should reach out
to your local Ohio Farm Service Agency
to get the ball rolling. Feel free to give me
a call to learn more about these programs
or to help you figure out what you stand
to gain.
by: Brian Kempf,
CPA, Principal, &
Agribusiness
Specialist
212 N. Washington St.
Millersburg, OH 44654
330.521.4549
[email protected]