USDA Secretary Sonny Perdue on June 10 issued a statement to clarify prevented planting insurance requirements for growers facing unprecedented planting delays due to wet weather. Perdue also addressed uncertainties about Market Facilitation Program (MFP) eligibility and farmer access to up to $16 billion in federal aid for trade war disruptions.
“I have been out in the country this spring and visited with many farmers. I know they’re discouraged, and many are facing difficult decisions about what to do this planting season or if they’ve got the capital to stay in business, but they shouldn’t wait for an announcement to make their decisions,” Perdue said. “I urge farmers to plant for the market and plant what works best on their farm, regardless of what type of assistance programs USDA is able to provide.”
Perdue reiterated that USDA will use up to $16 billion in MFP support and another $3 billion in disaster aid “to provide as much help as possible to all our affected producers.” He stressed that USDA is not legally authorized to make MFP payments to producers for acreage that has not been planted, but he said the agency is “exploring legal flexibilities” to provide a minimum per acre MFP payment to growers who filed prevented planting claims and chose to plant an MFP-eligible cover crop.
Even for those who lack crop insurance, USDA said growers who plant MFP-eligible cover crops on prevented planting ground “may qualify for a minimum amount of 2019 MFP assistance.”
In an FAQ that accompanied Perdue’s statement, USDA attempted to answer a number of more specific questions. At the outset, USDA urged growers to “plant what works best for your operation and what you would plant in any other year, absent any assistance from USDA.”
To qualify for a 2019 MFP payment, USDA said growers are required to plant a 2019 MFP-eligible crop, while producers who were unable to plant their crop “should work with their crop insurance agent to file a claim.” USDA urged growers to “comply with crop insurance requirements to remain eligible for a full prevented planting indemnity.”
While noting that the Additional Supplemental Appropriations for Disaster Relief Act of 2019 gives USDA the authority to compensate losses caused by prevented planting up to 90 percent, the agency cautioned that it still must operate “within finite appropriations limits.”
“It is highly unlikely that the supplemental appropriation will support that level of coverage in addition to crop insurance,” USDA said. “Congress appropriated $3.005 billion in assistance for a wide array of losses resulting from disasters throughout 2018 and 2019, requiring USDA to prioritize how it is allocated. The department plans to provide assistance on prevented planting losses within the confines of our authority.”
USDA also clarified that it has some discretion to consider disaster relief eligibility for producers who farm outside of a federally declared disaster area, but this is only on a “case-by-case basis.” USDA stated that it is “generally true that producers with qualifying losses in a Secretarial or Presidentially-declared disaster area” are only eligible for Disaster Relief Act assistance.
USDA said it is currently reviewing the prevented planting restrictions in the Federal Crop Insurance Act to determine what options growers have for haying and grazing cover crops, as well as other possible restrictions. “In the coming weeks, USDA will provide information on the Market Facilitation Program payment rates and details of the various components of the disaster relief legislation,” Perdue said.