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U OF ILLINOIS ISSUES REPORT "TRADE AND COVID-19 AD HOC PAYMENTS BY COMMODITY"
Sep. 18, 2020
Source: U of Illinois news release
To view the complete report, click here.
This article examines the distribution by commodity of the $33 billion in payments by the Market Facilitation Program (MFP) announced in 2018 (MFP 2018), MFP announced in 2019, and Coronavirus Food Assistance Program announced in 2020 (CFAP 2020) (see Figure 1).
Soybeans dominate, accounting for 45% of all payments, perhaps signaling a need to change the safety net for soybeans. Collectively, 2018 farm bill covered program commodities account for 79% of all payments, but the share going to non-covered commodities has increased with each program. This article extends our discussion of ad hoc farm payments in the farmdoc daily article of July 29, 2020.
Background
MFP and CFAP payments are related to a disruption in demand, not farm production. MFP specifically addresses economic damage from lower exports due to retaliatory tariffs placed on US farm exports by other countries in response to tariffs the US imposed on their exports to the US. CFAP addresses economic damage attributed to the COVID-19 pandemic.
MFP and CFAP payments are considered ad hoc because they (a) are not from the existing farm safety net and (b) cover current or past, not future, years. Data sources are the American Farm Bureau Federation for MFP 2018 and US Department of Agriculture (USDA), Farmers.gov for MFP 2019 and CFAP 2020.
Payment by Individual Commodity
Soybeans have received 45% of all payments by the 3 programs, the largest share of any commodity by far (see Figure 2 and Data Note 1). Cattle, corn, cotton (almost all to upland cotton) and milk/dairy complete the top 5, accounting collectively for 40% of all payments.
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