USDA Announces Second Round of Trade Aid for Farmers

U.S. Secretary of Agriculture Sonny Perdue announced that the U.S. Department of Agriculture (USDA) will take several actions to assist farmers in response to trade damage from unjustified retaliation and trade disruption.  President Trump directed Secretary Perdue to craft a relief strategy to support American agricultural producers while the Administration continues to work on free, fair, and reciprocal trade deals to open more markets in the long run to help American farmers compete globally.

“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,” Secretary Perdue said.  “President Trump has great affection for America’s farmers and ranchers, and he knows they are bearing the brunt of these trade disputes. In fact, I’ve never known of a president that has been more concerned or interested in farmer wellbeing and long-term profitability than President Trump.  The plan we are announcing today 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.  Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them.”

Specifically, the President has authorized USDA to provide up to $16 billion in programs, which is in line with the estimated impacts of unjustified retaliatory tariffs on U.S. agricultural goods and other trade disruptions.  The trade aid consists of:

  • $14.5 billion for the Market Facilitation Program (MFP), which consists of payments to producers of eligible crops and livestock;
  • $1.4 billion for a Food Purchase and Distribution Program to purchase surplus commodities for distribution to food banks, schools and low-income services; and
  • $100 million for an Agricultural Trade Promotion Program to assist in developing new export markets.

Farmer organizations across the nation have stated their support for efforts to address China’s unfair trade practice and appreciation for financial assistance during the turbulent times that are depressing markets.  Many organizations are also asking that a long-term solution be sought as soon as possible though.

North Dakota Grain Growers Association President Jeff Mertz said the programs won’t help farmers recoup all value lost from recent trade disruptions but call it “a step in the right direction.”  Mertz said the new MFP should provide added stability moving forward as it “is based more on total production acres so it’s not making crops compete with one another.”

The National Corn Growers Association (NCGA) followed up the announcement with a list of recommendations for the new assistance package.  NCGA would like to see the MFP factor market impacts into the payment rate calculations.  According to the organization’s analysis, there was an average price loss of 20 cents per bushel of corn from May 2018 to April 2019.  As negotiations with China lingered on after that, losses widened to nearly 40 cents per bushel.

“Farmers across the country are struggling.  Wet spring weather, trade disputes and tariffs, and demand destruction in the ethanol market are forcing farmers to make difficult decisions.  We appreciate the Administration’s recognition of these challenges and support for America’s farmers,” NCGA President Lynn Chrisp, who joined President Trump for the White House announcement, said.  “NCGA looks forward to continuing our dialogue with the Administration to craft a complete package that will provide corn farmers with more equitable short-term relief while also supporting and expanding the market opportunities farmers need most.”

National Farmers Union President (NFU) Roger Johnson expressed appreciation for the recent trade aid package as well and said it will cover a broader range of commodities than the 2018 MFP.  However, he said, “basing payments on 2019 planted acres fails to help those who have faced or are facing impossible planting conditions.”  Johnson called the package “a short-term fix for a very long-term problem.”

“Farmers rely on markets to make a living.  Our ongoing trade wars have destroyed our reputation as a reliable supplier and have left family farmers with swelling grain stores and empty pockets.  The very least we can do is provide our country’s struggling food producers with the certainty of a longer-term plan that also addresses the persistent and pernicious problem of oversupply,” Johnson concluded.


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