More details emerged on the potential $12 billion in agricultural aid programs last week. As it turns out, the aid programs for producers harmed by international tariffs will initially amount to only about $6 billion.
On Monday, Aug. 27, USDA Secretary of Agriculture Sonny Purdue held a press call with members of ag media. During this brief call, more details came out on the aid programs previously announced July 24. These details involved roll-out dates, some sign-up details, and breakdowns of allocations to commodities.
Beef was not mentioned at all. Pork and especially soybeans are the primary benefactors.
The tariff aid effort is broken down into three programs. They are, with their respective funding levels, and online sign-up locations:
• The Market Facilitation Program, $4.7 billion, farmers.gov;
• The Food Purchase and Distribution Program, $1.2 billion, ams.usda.gov; and
• The Trade Promotion Program, $200 million, fas.usda.gov.
The Market Facilitation Program, overseen by USDA Undersecretary for Farm Production and Conservation Bill Northey, is a direct payment program. Northey explained that the program will be based on commodity-specific payment rates paid on 50 percent of cotton, corn, dairy, pork, soybeans, sorghum, and wheat growers’ actual 2018 production.
The payment rates and total payment caps for the program for each commodity are as follows:
• Cotton—6 cents per pound, $277 million;
• Corn—1 cent per bushel, $96 million;
• Dairy—12 cents per hundredweight drawn from the margin protection historical number, $127 million;
• Pork—$8 per pig owned on the operation as of Aug. 1, $290 million;
• Soybeans—$1.65 per bushel, $3.6 billion;
• Sorghum—86 cents per bushel, $156 million;
• Wheat—14 cents per bushel, $119 million.
Northey additionally explained that producers will still need to establish their eligibility.
“They’ll need to sign that they don’t have an excess of $900,000 adjusted gross income, they need to be in conservation compliance, and then that sign up will start Sept. 4,” he said.
USDA’s Chief Economist, Dr. Rob Johannson, repeatedly reminded call participants that the direct payments of the Market Facilitation Program are on 50 percent of producers’ actual production, but that it is possible that there will be an additional round of payments later on.
“The initial payment programs will be announced and implemented starting around Labor Day, Sept. 4,” he explained during the question-and-answer portion.
“And then we will continue to evaluate whether we have seen recovery, either from the current suite of retaliatory tariffs, or if we do see agreements as we have just seen today with the announcement of the Mexican portion of [North American Free Trade] agreement. We will continue to recalibrate our trade models to estimate what the damage is likely to be for the remainder of the year. That process will continue through this fall leading up to a decision-making point closer to December.”
In discussing the Food Purchase and Distribution Program, Undersecretary for Marketing and Regulatory Programs Greg Ibach outlined some of the purchases that will be made, and the program spending caps. These include pork ($558.8 million), apples (93.4 million), and dairy ($84.9 million).
He did not offer more examples of commodities that will be purchased through the program, but he did note that the commodities purchased will be those that usually go to export markets. Additionally, he specified that the government “feeding programs” that the commodities will be purchased for will be programs other than the school lunch program.
“We’re mainly targeting those consumers that are calorie deficient who don’t get enough food on a daily basis because it’s very important that as we move through these purchases and place more food to be available in feeding programs, that we don’t displace other products that would normally be purchased.”
Little additional information was presented for the Trade Promotion Program. It is open to all commodities and will function similarly to the Market Access Program and the Foreign Market Development program. Moneys will be distributed based on a competitive application process.
All three programs will open to applications on Sept. 4. More information and sign up instructions can be found for the different programs online, as listed above. — Kerry Halladay, WLJ editor
