Some growers may collect three or even four payments on land where they were unable to plant a crop this spring due to persistent rain and flooding, but no one is going to get rich off of it, said Agriculture Secretary Sonny Perdue on Wednesday. “There is no way that would come up to a good crop.”
The USDA is close to announcing details on up to $14.5 billion in Trump tariff payments on this year’s production, Perdue told reporters, though he declined to say exactly when that might be. So far, only the skeleton of the program has been revealed, and it calls for payments to farmers based on trade losses in each county and how many acres a grower planted of the more than two dozen eligible crops.
Analysts say multiple payments are possible on prevented-planting land. First would be a crop insurance indemnity. Perdue said during a speech to the National Council of Farmers Cooperatives that the USDA would “top off” the crop insurance indemnities with money from the recently enacted disaster bill. The land also could draw a “minimal” trade payment if planted in a cover crop that is part of the Trump package. Last, in some parts of the country, the USDA will hold signups to share the cost, through the Environmental Quality Incentives Program, of cover crops.
If farmers sow a cover crop on prevented-planting land, they can harvest it or graze livestock on it starting Sept. 1, creating a chance for revenue.
Still, all the payments combined will not match the revenue from a good grain crop, said Perdue. The prevented-planting indemnity is set at 55 percent of the crop insurance guarantee. “Prevented planting is not a strategy. It is a fallback safety mechanism,” he said.
The USDA was “intentionally vague” about the trade mitigation program to keep producers from farming the program, Perdue said. But now, with the passing of the final dates for filing prevented-planting claims, “I think we can begin disclosing some of these plans, pull the curtain back, and let you know everything you want to know.”
Cover crops cost from $25 to $40 an acre for seed and planting, which is somewhat more than the cost of weed control on fallowed land, said university economists writing at the farmdoc daily blog. The expense may lead “to concerns for economic benefits in the future. Low returns likely for this year could exacerbate those concerns.” Before deciding whether to plant a cover crop, they said, growers may want to wait for guidance from the USDA on which cover crops will qualify for a Trump payment or to see if EQIP aid will be offered in their area
According to a progress report on implementation of the 2018 farm law, the USDA plans to open enrollment in September for farmers to choose between the insurance-like Agriculture Risk Coverage subsidy and the traditionally styled Price Loss Coverage subsidy. In December, the USDA will offer a “general” signup to enroll large tracts of fragile land in the Conservation Reserve Program.