The U.S. Department of Agriculture was in fine form for baseball season Monday, with a wind-up, pitch, and a curve, right in the farmer’s wheelhouse. Although it will be some time before we know whether the farmer swung and connected, it was a wide, breaking curve that only USDA lawyers could have contrived.
But let’s re-cap the inning, which began with two significant hits. The White House ordered USDA to develop a $16 billion program to mitigate the continuing trade impact on commodity prices and farm revenue, resulting from the tariffs applied on Chinese products imported into the US. This big brother repeat of a similar program in 2018 was initiated when it appeared that it may take a long time to recover the commodity markets lost in the trade war with China.
But the questions included: What would be paid to farmers, and who would get what share of the USDA funds? Suddenly, there were rules announced that funds would only be issued to farmers who planted a crop in 2019, and ostensibly would have a crop to sell at the prices pushed lower by the trade conflict.
While that might seem reasonable, one must factor in the horrible spring planting weather, and the inability of thousands of farmers to plant wet fields, through no fault of their own. And most of those farmers would try to recapture production costs via their crop insurance. But why should they be denied a USDA “trade aid” payment, just because of inclement weather?
That is when Congress stepped up to the plate while the disaster bill was being created to help Puerto Rico and other hurricane victims from the recent past. Members of the Senate Agriculture Committee devised a plan to set aside funds for the farmers filing a prevented planting claim on their crop insurance. The House went along with the concept, and those weather-beaten farmers across the Cornbelt were feeling much better about the prospects for black ink on their year-end balance sheet.
So with the White House funding on second base, and the Congressional funding on first base, the USDA stepped up to bat to administer the programs and issue checks. But here comes that curve ball.
Long after everyone left their office Monday night, USDA issued a statement from Agriculture Secretary Perdue, lamenting the plight of the farmer and how he hoped the White House funding would be salve for sore wounds. But, oh, by the way, “USDA is not legally authorized to make Market Facilitation payments to producers for acreage that is not planted.”
But he said USDA is trying to find ways to get the money to producers who plant certain cover crops on their unplanted acreage, that could eventually be harvested, and make the USDA lawyers happy. More like a wild pitch than just a curve ball.
We’ll wait to see how many farmers will swing at it.