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Perdue Provides More Clarity On Tariff Aid

16:10PM May 24, 2019
Chrysanthemum

As rain and wind continue to hammer much of the Corn Belt, farmers were glued to their phones, computers, TVs and radios Thursday in an attempt to learn as much as they could about the 2019 tariff aid package announced by the Trump administration. Still, the details released by USDA left more questions then answers. Agriculture Secretary Sonny Perdue cleared up some of the cloudiness on Friday in an interview with AgriTalk host Chip Flory.  

“I think [farmers] should make their decisions based on if there were no program at all, because certainly we have not disclosed details that would distort planting intentions for intentional purposes,” he told Flory. “We always want our producers to plan for the market, not for government programs, whether they be farm bill programs, safety nets or something like this.”

Because farmers, and their planters, have been sidelined for much of May, most of the country’s corn crop has yet to be planted. That has left farmers to consider claiming a record number of prevent plant acres. But Thursday’s announcement added some confusion to that decision a little more complicated because an aid payment will not be made on prevented plant acres. 

“We have a safety net program for prevented plant, government insurance perspective, it's pretty lucrative, honestly,” Perdue said. “The premise behind this market facilitation program is trade disruption and if you don't have a crop to sell, you have difficulty proving a tariff disruption or tariff damage in that regard. We're gonna have to rely on our basic safety net programs through the farm bill for prevented plant.”

University of Illinois economist Scott Irwin has repeatedly said he does not agree with this provision of the aid program and that farmers should not be punished for Mother Nature keeping them from being in the fields. 

Another concern that rose to the top Thursday was the limitation that farmers will not be paid for acres of Title I crops that exceed their 2018 plantings. Perdue clarified that this does not exclude acres added to a farming operation that had previously been planted to Title I crops.  

“If those acres were farmed last year, and in those Title I crops, they will be eligible,” he said. “If they're plowing up pasture or grasslands or planting a Title I crop for this program, they would not be covered. But if you were planting 1,000 acres last year, and I planted 1,000 acres and you retired, and I took and planted your thousand, so I had 2,000. Both of those would be eligible because they were they were planted in 2018. But if I had 1,000 acres of grasslands and I said well, I'm gonna go plant wheat or soybeans so I get this payment, that will not be eligible.”

Secretary Perdue would not specify when the county level payment rates would be announced, but he said it’s not likely to be before the June acreage report. The secretary did say, however, that media reports of rates have been incorrect.

“You mentioned a $2 amount on soybeans. I can tell you, unequivocally that article was inaccurate,” Perdue said. “I'm not sure where they came up with their guess. But I want to make sure no other media has picked it up. But the originating media did not have the correct information.

“I want to let people know they need to make their planting decisions are cropping decisions, all of their production decisions based on what they see the market, and where they see their own weather patterns and when they can get into the fields in their own area,” he said. “And that's one of the reasons we're being discreet about that is just so we do not distort the market and create the actions that would not be helpful.”

While the payment cap has not been announced yet, Perdue assured Flory there would be a cap. He also said a means test would be applied to eligibility. 

“There will be a means test as there has been but there again will be somewhat different. Not necessarily what people have been used to,” he said. “Again, we want to be very careful. While we want people to know there is help on the way, we don't want to change their behavior. I don't like being opaque Chip, but I think it's important that we maintain the discipline so producers will know there’s help on the way but do what you ordinarily would don't try to second guess this program or figure out how you can game the system.”