The Almond Alliance of California appreciates the efforts by the U.S. Department of Agriculture to work out the necessary details to provide direct payments to almond growers to help ease the pain of the retaliatory tariffs imposed by China and Turkey on almonds imported from California.
Market Facilitation Program for Almonds
In July 2018, U.S. Secretary of Agriculture Sonny Perdue announced that the administration would take several actions to assist farmers in response to trade damage from retaliatory tariffs. The short-term relief strategy resulted in three programs: The Market Facilitation Program (MFP), the Food Purchase and Distribution Program, and the Trade Promotion Program.
The MFP was originally developed for the Title 1 Commodities, e.g., soybeans, corn, wheat, etc. However, in September 2018, Secretary Perdue announced the addition of almonds and fresh sweet cherries to the program. MFP is being operated under the Commodity Credit Corporation (CCC), and administered by the USDA Farm Service Agency (FSA).
Unfortunately, the current trade environment means we are faced with retaliatory tariffs rather than a market based solely on supply/demand considerations. This is the first-time almonds have been included in a direct payment program. It is important that growers apply for the program – whether or not they ultimately are eligible – as it will help determine what changes need to be made to the program, or if a direct payment program is a viable option for the almond industry.
What Does This Mean for Almond Growers?
Almond growers can sign up for the MFP payments between September 24 through January 15, 2019; however, payments to eligible growers will only be issued once harvest is 100% complete, and production is reported. A payment will be issued on 50% of the grower’s total marketable/edible production, multiplied by the MFP rate for almonds, which is $0.03 per pound. On or about December 3, 2018, USDA may announce a second payment rate, which will apply to the remaining 50% of the grower’s remaining production. The calculation of the payment is:
(50%) x (2018 marketable/edible production) x ($0.03)
NOTE: The MFP rate for cherries is $0.16. Growers who are producing both almonds and cherries could apply for payments against the reported production of each crop.
Which almond growers are eligible?
Not all almond growers will be eligible for direct payments under the MFP program due to USDA limitations:
- Payments are capped per person or legal entity at $125,000 for almonds (kernel basis). If growers are producing both almonds and cherries, the payment limitation is still a combined $125,000.
- Eligible applicants must have an ownership interest in the 2018 marketable production.
- Eligible applicants must have an average adjusted gross income (AGI) of less than $900,000 for 2018. The AGI for 2018 is based on the average of 2014, 2015, and 2016.
- Applicants must also comply with the provisions of the highly erodible land conservation and wetland conservation provisions, which are commonly referred to as the conservation compliance provisions.
NOTE: In the case of a partnership, the AGI and payment limitations do not apply to the partnership as a whole, but rather to each individual partner. The charts below provide more details on how to determine your eligibility to participate in the program.
Click on FACT SHEET below for more information on the application process.