Trump's Expansion of Farm Payments

Here's a piece on how the Trump administration has expanded federal payments to farmers.

Implementing the Trade War Payments I

Agweb has the announcement of the CCC programs, which include these details (from Jim Wiesemeyer, who was a pain in the neck  back in 1983 during the the implementation of the Payment-in-Kind (PIK) Program).

“USDA says it will take some time to develop the needed rules and regulations for the efforts and there will be a Federal Register notice published,” Wiesemeyer said. “There will be a relatively simple signup —producers will need to tell USDA what their 2018 production is for the crops targeted, and that level of what they actually produced times a payment rate and producers would get a payment based on that formula.”

Specific details for how the program will work, how the program will be implemented and how farmers can sign up for payments have not been announced. According to USDA undersecretary, Greg Ibach, the details will be released closer to Labor Day when USDA plans to fully implement the program.

“Payments are expected to start going to producers in September and will be also dictated by when the producer actually harvests the crops where the direct payments will be made,” Wiesemeyer said. “That would signal most wheat producers would be first up to receive the payments along with pork and dairy producers.”

I suspect there's some parallels with PIK--USDA and FSA have been working on the program for a couple months.  And they'll be working even harder now the announcement is out.  Based on my experience with PIK and other programs, the biggest problem will have been figuring out what decisions need to be made, specifically things like which commodities will be included and the economic logic for computing payment rates. How long do you assume the trade war is going to last is a big one.  Maybe you can compute an impact on prices for the 2018 crops of wheat, corn, soybeans, etc and assume that the trade war will be over in time for the 2019 crop?  But for dairy and pork the exact duration is more important.  Or maybe you set up a continuing program so you can do multiple computations and multiple payments?

Those are policy issues for the big shots in USDA and OMB--I hope Sec. Perdue's policy team is well staffed and works smoothly, much more smoothly than the administration's foreign policy team.

The bureaucratic issues are of more interest to me.  Developing the signup forms and procedures, writing the regulations, and getting OMB clearance on the forms and regulations are big jobs. In 1983 we didn't have all the tools they have now--IIRC Wordperfect was our major tool.  I know for sure we were still printing forms and procedures then. And those had to be shipped to state and county offices and arrive before farmers could sign up for the program.

 My big question on this program is how Trump's EOs on reducing the burden of regulations and the number of regulations will come into play.  I'm sure at the beginning of the year USDA and OMB didn't plan on having at least one brand new regulation, and more likely three new ones, to fit under the Trump rules.  Three new rules would mean having to do away with six old ones.  My cynical take is OMB will waive the rules and no one of any consequence will notice.

I'm also curious how FSA in DC will train the states and counties.  I know they're doing a lot of training online.  In 1983 DC had to train the states and the states would train the counties.  Preparing training materials when issues are still in up in the air is fun.  Getting up in front of 100 state people who are impatient to get going and nervous over the jam they're in is great fun.  The reality though is that "training" is more complicated than simply passing on information and procedures.  In-person training is an opportunity to find out the holes and flaws in what you (the DC specialist) has done.  And it's an opportunity over the long run to build trust--if you promise to get an answer from the big shots and are able to deliver, people trust you more.  And I think that trust ultimately pervades the whole network of people from DC specialist through to the farmer applying for benefits.

Thoughts on the Trump Bailout

Apparently the Market Facilitation Program payments will be tied to actual production:

• I wonder how the program provisions will interact with other farm programs, particularly the crop insurance policies for whole farm revenue?
• I wonder whether they will apply a payment limitation on the benefits.  Under the legislation authority they're using I don't believe they would have to, but might be criticized if they don't.  I've already seen a query on Twitter about payments to big farmers.
• On the fraud end, it would seem that cross-referencing insurance production data and MCP data would be necessary.  Fortunately FSA and RMA have ironed out all the differences in their databases so that will be a piece of cake (won't it-- :-)

The Post, Farmers, and the Trump Bailout

Via Tamar Haspel on twitter, the Washington Post has a page asking farmers for their input on the Trump bailout program, including contact information so reporters can follow up.  The approach is new to me.  Worth trying IMHO but while the Post's audience may have expanded and diversified with the impact of the internet, I'm not sure how much attention it will attract.

BTW Haspel is maybe the best Post reporter they've had since Ward Sinclair, which is going back a bit.