Agriculture Producers Eligible for Direct Payments Need to Act Now

Earlier this summer, Agriculture Secretary Sonny Perdue announced a $12 billion program to help farmers who are bearing the brunt of unfriendly and illegal tariffs that have been imposed on the United States in the past few months. We recently asked firm partner Mike Regan how agriculture producers can take action to receive aid.

 Mike has devoted the last 25 years serving the agriculture industry across the Midwest, specifically grain and farm supply cooperatives, privately-held grain and farm supply companies, and farm producers. On a day-to-day basis, you might find Mike reviewing audit reports or income tax returns, providing strategic business and tax advice to clients and staff, or meeting with a board of directors to report on audit results and income tax scenarios. Below is a recap of information Mike has received from the federal government regarding the program:

Beginning September 4 through January 15, 2019, certain agricultural producers are eligible to take advantage of the Market Facilitation Program established by the U.S. Department of Agriculture (USDA) Farm Service Agency (FSA).

Program name: Market Facilitation Program (MFP)

Who is administering the program: The MFP is established under the statutory authority of the Commodity Credit Corporation (CCC) Charter Act.

What does it do: Provides direct payments to producers who have been directly impacted by illegal retaliatory tariffs resulting in the loss of traditional exports.

Who can apply: Corn, cotton, sorghum, soybean, wheat, dairy and hog producers who are individuals or legal entities actively engaged in farming in 2018. A producer must be in compliance with highly erodible land conservation compliance provisions and a producer’s average adjusted gross income may not exceed $900,000.

Dairy and hog producers – the payment for dairy production is based on the historical production reported for the Margin Protection Program for Dairy. For existing dairy operations, the production history is established using the highest annual milk production marketed during the full calendar years of 2011, 2012 and 2013. Dairy operations are also required to have been in operation on June 1, 2018. Payment for hog operations will be based on the total number of head of live hogs on August 1, 2018. Production records for hogs may include, but are not limited to: breeding records, inventory records, sales receipts, rendering receipts or veterinary records.

How are payments issued: A payment will be issued on the first 50% of the producer’s total production of the commodity. On or about December 3, the CCC will announce a second payment rate, if applicable, that will apply to the remaining 50% of the crop and certifies the amount of production.

How much will be paid: The initial MFP rates are as follows:

  • Cotton – $0.06 per pound
  • Corn – $0.01 per bushel
  • Dairy – $0.12 per cwt.
  • Hogs – $8.00 per head (number of head as of August 1, 2018)
  • Sorghum – $.86 per bushel
  • Soybeans – $1.65 per bushel
  • Wheat – $0.14 per bushel

MFP payments are capped per person or legal entity as follows:

  • A combined $125,000 for eligible crop commodities
  • A combined $125,000 for dairy production and hogs

MFP payments do not count against other 2014 Farm Bill payment limitations.

How to apply: MFP applications are available online at Applications can be completed at a local FSA office or submitted electronically either by scanning, emailing or faxing. The guidelines listed above are not inclusive, other restrictions may apply.

Not sure where to start? Agribusiness expert Mike Regan is on hand to help you evaluate your options. Start here to get a conversation going.


CATEGORIES: Agribusiness | Featured | Tax & Audit
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