The USDA will offer more than $16 billion in programs to help farmers impacted by trade disruption and “unjustified retaliation.”
U.S. Secretary of Agriculture Sonny Perdue announced May 23 that the USDA will take several actions to assist farmers with programs that estimate the “impacts of unjustified retaliatory tariffs on U.S. agricultural goods and other trade disruptions.”
“China hasn’t played by the rules for a long time and President Trump is standing up to them, sending the clear message that the United States will no longer tolerate their unfair trade practices, which include non-tariff trade barriers and the theft of intellectual property,” Purdue said in a press release. “President Trump has great affection for America’s farmers and ranchers, and he knows they are bearing the brunt of these trade disputes.”
According to the USDA, American farmers have dealt with unjustified retaliatory tariffs and years of non-tariff trade disruptions, which have curtailed U.S. exports to China. Farmers have experienced the effects of U.S.-China trade disruptions for those who produce crops such as soybeans and wheat and the dairy industry.
“High tariffs disrupt normal marketing patterns, raising costs by forcing commodities to find new markets,” the USDA stated. “Additionally, American goods shipped to China have been slowed from reaching market by unusually strict or cumbersome entry procedures, which affect the quality and marketability of perishable crops. These boost marketing costs and unfairly affect our producers.”
Purdue said the plan the USDA announced ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners.
“Our team at USDA reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers,” he said. “Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them.”
The USDA announced several programs to assist farmers, such as the Market Facilitation Program for 2019, which will provide $14.5 billion in direct payments to producers. This will apply to producers of several crops including soybeans and wheat. According to the USDA, farmers will receive a payment based on a single-county rate multiplied by a farm’s total plantings to those crops in total in 2019.
Dairy producers will also see some relief by receiving a per-hundredweight payment on production history.
“These payments will help farmers to absorb some of the additional costs of managing disrupted markets, to deal with surplus commodities and to expand and develop new markets at home and abroad,” the USDA stated.
Farmers should expect to see payments made in three periods, the second and third dependent on market conditions: July and early August, after the FSA crop report is completed by July 15; November; and early January.
In addition to the programs, the USDA states that a $1.4 billion Food Purchase and Distribution Program will surplus commodities affected by trade disruption. These products will be distributed by the Food and Nutrition Service to food banks, schools and other outlets serving low-income individuals.
Finally, the CCC will use its Charter Act authority for $100 million to be issued through the Agricultural Trade Promotion Program administered by the Foreign Agriculture Service to assist in developing new export markets on behalf of producers, according to the USDA.
Further details regarding eligibility and payment rates will be released at a later date.