by | Dec 17, 2018

NCGA: Trade Aid Comes Up Short, Again

The National Corn Growers Association today expressed disappointment that corn farmers impacted by trade tariffs and ongoing trade uncertainty would receive virtually no relief through the U.S. Department of Agriculture’s (USDA) Market Facilitation Program (MFP).

NCGA’s comments follow USDA’s announcement of the second round of MFP payments, again setting the payment rate for corn at just one cent per bushel, despite the fact that corn farmers have suffered an average 44 cent per bushel loss since tariffs were first announced.

“Farmers of all crops have felt the impact of trade tariffs,” said NCGA President Lynn Chrisp. “NCGA appreciates the progress the administration has made to advance ethanol, reach a new agreement with Mexico and Canada and move forward on negotiations with Japan, but the benefits of these efforts will take time to materialize and farmers are hurting now.”

“One cent per bushel is woefully inadequate to even begin to cover the losses being felt by corn farmers. USDA did not take into account the reality that many of our farmers are facing,” Chrisp added.

In a November 19 letter to USDA Secretary Perdue, Chrisp stressed the disappointment around USDA’s approach to calculating MFP payments. Many farmers felt it was too narrow in scope and did not capture real-time impacts of trade disruptions.

NCGA called on USDA to add ethanol and distillers dried grains with solubles (DDGS) to the calculation of damages for corn, roughly $254 million. The organization also asked that farmers who suffered production losses from disasters be allowed to use an alternative to 2018 production for their MFP calculation, ensuring those suffering losses from natural disasters would not be penalized twice. These requests were repeated in subsequent conversations between NCGA and administration officials but ultimately ignored in USDA’s final payment calculation for round two.

According to an NCGA-commissioned economic analysis, corn farmers suffered a 44 cent per bushel loss in the price of corn from the beginning of May, right before tariffs were announced, through July, when tariffs were implemented. Based on USDA yield averages and acres of corn planted, that amounts to a $6.3 billion loss to corn farmers.

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