Agriculture Secretary Sonny Perdue estimates there is less than a 10% chance that farmers will get more Market Facilitation Program payments this year and says China is sending “signals” it intends to honor its pledges to ramp purchases of U.S. farm commodities.
Perdue made his prediction about the chances for a 2020 MFP to reporters after a three-hour appearance Wednesday before the House Agriculture Committee where he was peppered with questions about the prospects for the payments and expanded exports.
He told the committee that China’s moves to lower non-tariff trade barriers and accompanying “chatter” made him optimistic that there would be an eventual surge in U.S. exports and that “a huge majority of the agricultural sector will benefit.” The "phase one" agreement doesn’t publicly disclose which products China intends to buy.
Perdue said he expects China to start buying U.S. soybeans in late spring and summer, which would be in line with past practices.
Committee Democrats led by Chairman Collin Peterson, D-Minn., expressed concern that trade with China would increase sufficiently this year, and some lawmakers pressed Perdue about the possibility of additional MFP payments.
Peterson said farm income would have “been in the tank” last year if not for the payments, and he said that President Donald Trump’s recent tweet about the possibility of additional aid doesn't "give me a lot of hope” that markets will turn around in 2020.
Trump tweeted on Feb. 21 that he would provide more money to farmers this year if his trade deals don’t “fully kick in.”
According to the latest monthly survey of farmer sentiment by Purdue University and the CME Group, 45% of producers expect additional MFP payments this year, but the polling was done prior to Trump's tweet.
At Wednesday’s hearing, Perdue continued to warn that farmers shouldn’t count on additional MFP payments and plant for the market instead.
“I’m telling farmers that if we get the exports, we get the trade, and we don’t see prices increase, then the Market Facilitation Program was not a price-support program. It was a trade destruction program,” Perdue told the lawmakers.
But Rep. Angie Craig, D-Minn., said Trump and Perdue were sending conflicting signals that were unfair to farmers.
"This kind of policymaking is not predictable, it’s not reliable,” said Craig. “It’s no way to make farmers run their businesses, and given that farm debt is increasing twice as fast as farm equity, how can lenders ignore such a statement from the president?”
Asked by a reporter after the hearing about the odds of additional MFP payments this year, Perdue responded, “I would say probably from my perspective now less than 10%. … It’s always a risk when you put a number on something like that, but I'm really trying to emphasize to producers to look at the market, … look at the lenders and plan for the market and and do that.”
During the hearing, Perdue vigorously defended the program from allegations that it was structured in 2019 to favor southern growers. He briefly displayed a large map (committee photo above) showing relative amounts that states had received. County-by-county data analyzed by Agri-Pulse showed that the payments were broadly distributed across the Midwest and Plains states with additional pockets in California and the lower Mississippi Valley.
At one point the former Georgia governor made a joking reference to how much went to Peterson’s home state of Minnesota. “I’m proud of the fact that the chairman’s congressional district got more than all of the state of Georgia did,” Perdue said.
Peterson quipped in response: “Just doing my job.”
Democrats also used the hearing to push the Trump administration to support the House-passed Farm Workforce Modernization Act, but Perdue wouldn't endorse the measure and wouldn’t identify who opposed it in the White House.
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The bill would expand the H-2A visa program and impose limits on wage increases. But immigration hard-liners in the administration and in Congress criticized the bill for providing a path to legal status for workers who are now in the country illegally.
Referring to that issue, Perdue said that immigration concerns needed to be separated from the ag labor issue.
Rep. Kim Schrier, D-Wash., pressed Perdue to personally bring the bill up with Trump. Perdue replied only that “we’re very aware” of the legislation.
“That didn’t sound reassuring,” Schrier responded.
Several Democrats also denounced a series of rules that will reduce participation in the Supplemental Nutrition Assistance Program, including one taking force in coming weeks to restrict waivers from SNAP work requirements for able-bodied adults without dependents.
“Mr. Secretary, you’re hurting people,” said Rep. Jim McGovern, R-Mass.
Perdue insisted that the rules were consistent with his legal authority and the intent of the 1996 welfare reform law.
The committee’s ranking Republican, Mike Conaway of Texas, said senators assured him during negotiations on the 2018 farm bill that Perdue had the authority to make the changes. Conaway was chairman of the House committee at the time.
Also at the hearing, Perdue said he was “amenable” to holding an additional general signup for the Conservation Reserve Program. The first general signup in four years ended Feb. 28, and Perdue said he was unhappy that landowners had experienced technical glitches and other problems in trying to file applications.
