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Distribution of Market Facilitation Program Payments and their Financial Impact for Illinois, Kansas, and Minnesota Farms

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  • Nicholas D. Paulson
  • Allen M. Featherstone
  • Joleen C. Hadrich

Abstract

The recent infusion of cash into production agriculture due to damages from retaliatory trade actions has been large. Up to $28 billion has been authorized through the Trade Mitigation Program in 2018 and 2019, accounting for a significant share of farm income and providing liquidity in an extended period of low prices. Using farm‐level data from Illinois, Kansas, and Minnesota, this research examines the importance of market facilitation program payments in supporting incomes and reducing credit default risk. Results illustrate the additional liquidity provided for farms, and the distributional effects across states and among farms within each state.

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  • Nicholas D. Paulson & Allen M. Featherstone & Joleen C. Hadrich, 2020. "Distribution of Market Facilitation Program Payments and their Financial Impact for Illinois, Kansas, and Minnesota Farms," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(2), pages 227-244, June.
    • Handle: RePEc:wly:apecpp:v:42:y:2020:i:2:p:227-244
    DOI: 10.1002/aepp.13055
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    1. Christine Wilson & Allan Featherston & Terry Kastens & John Jones, 2006. "Determining What's Really Important to Lenders: Factors Affecting the Agricultural Loan Decision-Making Process," Working Papers 06-07, Purdue University, College of Agriculture, Department of Agricultural Economics.
    2. Coppess, Jonathan & Schnitkey, Gary & Zulauf, Carl & Swanson, Krista, 2019. "The Market Facilitation Program: A New Direction in Public Agricultural Policy?," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 9(220), November.
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    4. Joseph P. Janzen & Nathan P. Hendricks, 2020. "Are Farmers Made Whole by Trade Aid?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(2), pages 205-226, June.
    5. Allen M. Featherstone & Laura M. Roessler & Peter J. Barry, 2006. "Determining the Probability of Default and Risk-Rating Class for Loans in the Seventh Farm Credit District Portfolio," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(1), pages 4-23.
    6. Schnitkey, Gary & Paulson, Nick & Swanson, Krista & Coppess, Jonathan & Zulauf, Carl, 2019. "The 2019 Market Facilitation Program," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 9(139), July.
    7. Thiemo Fetzer & Carlo Schwarz, 2021. "Tariffs and Politics: Evidence from Trump’s Trade Wars," The Economic Journal, Royal Economic Society, vol. 131(636), pages 1717-1741.
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    Cited by:

    1. Hendricks, Nathan P. & Murphy, Ashling M. & Morgan, Stephen & Padilla, Samantha & Key, Nigel, 2023. "Explaining the Source of Racial Disparities in Market Facilitation Program (MFP) Payments," 2023 Annual Meeting, July 23-25, Washington D.C. 337402, Agricultural and Applied Economics Association.
    2. Joseph P. Janzen & Nathan P. Hendricks, 2020. "Are Farmers Made Whole by Trade Aid?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(2), pages 205-226, June.
    3. Joseph P. Janzen & Trey Malone & K. Aleks Schaefer & Daniel P. Scheitrum, 2023. "Political returns to ad hoc farm payments?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(1), pages 555-578, March.
    4. Belasco, Eric J. & Smith, Vincent, 2022. "The impact of policy design on payment concentration in Ad-hoc disaster Relief: Lessons from the Market Facilitation and Coronavirus food Assistance programs," Food Policy, Elsevier, vol. 106(C).

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