When USDA released their $12 billion trade aid package in August, there was a collective sigh of relief in farm country. However, as details have become clearer, farmers and bankers across the country are concerned the aid won’t be enough to make a measurable difference for all farmers.
“There are a lot of restrictions,” says Steve Nicholson of Rabo Agrifinance, adding that they were encouraged when the package was released and showed soybean farmers would receive $1.65 per bu. of soybeans, until they started seeing the program qualifications.
“No one can get more than $125,000 [for grain production]. Taxable income [in 2014, 2015 and 2016] has to be below $900,000 to qualify. So, there's gonna be a lot of people who, unfortunately, are not going to get any relief because they don't fall in those particular categories,” he explains. “So, it looks good on the surface but you start digging down it like makes you concerned.”
According to Nicholson, when you do some calculations on how many bushels of soybeans the program will cover you realize USDA does not intend for everyone to get a payment.
“If I take $1.65 and look at, you know, $3.6 million dollars, that only covers about 2 billion bushels of beans,” he explains. “We're already producing over 4 billion bushels.”
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