Ag Policy Blog

NCGA Urges Changes to Trade Aid Payments

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Changes to the methodology used to calculate a second round of trade aid payments are being called for by corn growers, contending the first payments did not take enough into account.

A first round of payments under USDA's Market Facilitation Program (MFP) are currently being disbursed and as the second round is being readied, the National Corn Growers Association (NCGA) wants USDA to broaden the areas it considers in putting those payments together.

Of commodities receiving MFP payments, first round payouts for corn set to be the lowest with a rate of $0.01 per bushel, yielding disbursements totaling $96 million. In a letter to USDA Secretary Sonny Perdue, NCGA President Lynn Chrisp cited an analysis it previously shared with the White House, conducted by Integrated Financial Analytics and Research (IFAR), which found trade disputes with China and the European Union (EU) caused an average decline in the price of corn of $0.44 per bushel.

As trade turmoil with the EU, China and others persists, causing "significant uncertainty," Chrisp asked Perdue to consider two changes to MFP payment calculations to more accurately address the negative effects being felt by US corn growers.

First, Chrisp asked that ethanol and distillers dried grains with solubles (DDGS) be added to the calculation of damages for corn. "Gross trade damages for ethanol and DDGS amounts to $254 million that was not accounted for in the first tranche of MFP payments," he wrote.

Second, farmers suffering production losses due to natural disasters should be allowed to use an alternate method for calculating 2018 production for the purpose of determining MFP payments. Such a change "would ensure that farmers in Kansas, Missouri and Texas, who are suffering from drought, and farmers in the Southeast, who are suffering losses from Hurricane Michael, would not be penalized twice," Chrisp said. Also, he added, it is "important that farmers be allowed to use RMA production records in MFP."


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