Thursday, May 16, 2019

Another Round of MFP Payments?

There's been discussion this week, and a promise by the President, that farmers will receive more money to compensate for losses due to the trade war with China.

That's well and good, but I'm not sure of the nitty-gritty.  Let me backtrack:

For the first MFP I initially thought USDA was tapping Section 32 funds.  Did a bit of research on that possibility.  (Roughly, Section 32 provides authority for USDA to use a portion of certain tariff revenues for certain aid to agriculture.  It dates back to the New Deal days.)  But that turned out to be a mistake of mine.  Instead USDA tapped CCC's borrowing authority, which also dates back to the New Deal.  CCC has authority to borrow up to $30 billion from the Treasury and spent it to aid agriculture in certain ways..

I've tried, half-heartedly, to find out how much borrowing authority CCC has left.  When it's tapped out, CCC has to stop its operations until Congress passes legislation to replenish the authority.  (I'm skating on the edge of my comprehension of these matters, but I do have a clear memory of a time when CCC ran out of authority just before we were to make deficiency payments, notably because my screwup cost the taxpayers a few million dollars. (A story for another day.)

Bottom line, I didn't find the answer. 

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