In farm bailout, southeastern counties reap rewards

Caroline County Virginia soybean field
A soybean field in Caroline County. (Sarah Vogelsong/ For the Virginia Mercury)

If granted three wishes, Virginia farmers hit hard by the China-U.S. trade war might ask first for good growing weather, second for an end to the yearlong conflict and third for an address in Southampton County or the city of Franklin.

Why? Because farmers there are entitled to the highest payouts in the state under the U.S. Department of Agriculture’s Market Facilitation Program, a federal effort to ease the trade war’s burden on farmers by compensating producers for lost profits.

Southampton and Franklin farmers are guaranteed $126 for every acre they plant with “non-specialty” crops, a label that applies to most agricultural big-hitters, including alfafa, barley, canola, beans and peas, cotton, rice, peanuts, sorghum, soybeans and wheat. That’s almost 30 percent higher than the next-highest payment rate of $97 per acre, which farmers in Greensville or Emporia can draw, and three times the mean rate of $42 for the state.

In fact, eight of Virginia’s top 10 county payment rates are found in its southeastern region (Fauquier and Culpeper counties also slip into the upper ranks, although at $60 and $59 per acre, respectively, their farmers receive less than half of what Southampton’s growers do). All the lowest rates, a mere $15 per acre, go to farmers in the southwestern portion of the state.

So just what’s driving this flow of cash to southern Tidewater? Few explanations were immediately forthcoming. The Virginia Farm Bureau Federation recommended asking USDA’s Farm Service Agency, which administers the Market Facilitation Program, but officials there largely directed the Mercury to the program website, which provides only general details about the nationwide program.

Herman Ellison, the Virginia state statistician with the National Agricultural Statistical Service, said his office isn’t responsible for the county rates but did provide information about crop acreage and yields, both of which are used to calculate the rates.

Those calculations, which the USDA explained in an August report from the Office of the Chief Economist, differed from the ones used in 2018. Last year, a specific payment rate was assigned to each non-specialty crop, so if a farmer harvested 1,000 bushels of soybeans and 1,000 bushels of corn, the USDA would apply its rate of $1.65 per bushel for soybeans and $0.01 per bushel for corn and pay the farmer $1,650 + $10, or $1,750.

This year, though, the USDA wanted to avoid what it called “large payment-rate discrepancies” across crops and also influence farmers’ planting decisions as little as possible. As a result, it came up with county-wide payment rates, calculated using a three-step process. First, the agency multiplied the acres of each non-specialty crop planted in a given county by that crop’s yield and a new crop-specific payment rate. Then it added all of those totals together. Finally, it divided the sum by the total acreage of all of the county’s non-specialty crops to arrive at the county rate.

Sound complicated? It’s actually even more so. Instead of using data from a single source or a single year for its calculations, the USDA elected to use data from a 10-year period for some numbers, as well as data from several offices, including the National Agricultural Statistical Service, the USDA Risk Management Agency and the Farm Service Agency. (If you want the full breakdown, the details are in the Office of the Chief Economist report.)

The resulting figures might more accurately reflect tariff impacts, but they make it virtually impossible to replicate the government’s calculations, especially because certain crop numbers are considered confidential if they’re small enough that they would allow the public to figure out an individual farmer’s yields.

Circling back to the original question of just why Southampton farmers are getting such a windfall, the best answer might be cotton: In 2017 the county was the largest producer of the crop, growing almost 40,000 acres of it. At the same time, it also produced 24,000 acres of soybeans, 15,000 acres of corn and 11,000 acres of peanuts.

That would be in line with the findings of other agricultural economists who hypothesized that cotton and soybeans were the biggest drivers of the “MFP 2.0” payments. But absent sophisticated mathematical software, Virginia farmers looking for concrete answers might have to throw up their hands — and maybe move to Southampton.