On July 24, USDA Secretary Sonny Perdue announced a plan to assist farmers in response to trade damage from unjustified retaliation. Specifically, USDA will authorize up to $12 billion in programs, which is in line with the estimated $11 billion impact of the unjustified retaliatory tariffs on U.S. agricultural goods. These programs will assist agricultural producers to meet the costs of disrupted markets. Secretary Perdue said, “The President promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong. Unfortunately, America’s hard-working agricultural producers have been treated unfairly by China’s illegal trading practices and have taken a disproportionate hit when it comes to illegal retaliatory tariffs. USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations.”
These assistance programs were announced:
Market Facilitation Program - authorized under the Commodity Credit Corporation (CCC) Charter Act and administered by the Farm Service Agency; will provide payments incrementally (as 2018 production becomes known) to producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs.
Food Purchase and Distribution Program - implemented through the Agricultural Marketing Service to purchase unexpected surplus of affected commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs.
Trade Promotion Program - administered by the Foreign Agriculture Service in conjunction with the private sector to assist in developing new export markets for our farm products.USDA officials indicated that Market Facilitation Program payments to farmers will be based on 2018 actual production multiplied by a ‘to-be-determined’ payment rate. USDA Trade Counsel Jason Hafemeister stressed that the assistance programs will not be a long-term platform that bleeds into 2019. “This is a short-term bridge to help the president successfully negotiate these deals,” he said. Hafemeister also explained that the payments should easily fall within current WTO guidelines for domestic support. Greg Ibach, Under Secretary for Marketing and Regulatory Programs, when asked about relief for ag input and service providers who may also be affected by tariff retaliation, said, “As a farmer myself, I can assure you that as we improve the economic conditions of our nation’s farmers and ranchers, as a community we are notorious about reinvesting those funds back into our community in purchasing goods and services that allow us to have continuing and viable farm operations. So the indirect and ripple effect of these investments will be seen in that way.” The plan detailed by USDA does not require congressional approval. More details will be announced in mid-August with signup for the Market Facilitation Program expected to begin in early September.
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