Aid for farmers in response to retaliatory tariffs by China is expected to be on the way soon.
In a media conference call on the morning of Thursday, May 23, Agriculture Secretary Sonny Perdue, along with USDA undersecretaries and staff, announced the implementation of a new trade aid program for farmers.
Aid program differences from last year
Dr. Rob Johannson, chief economist for USDA, said the relief is roughly the same as the last year’s program. Trade damages from the past year’s tariffs and the differences in trade from tariffs on exports were evaluated in order to create a relief strategy.
The new aid program is capped at $16 billion, as opposed to the $12 billion of last year. The relief program will be compromised of three programs: a Market Facilitation Program; a Food Purchase and Distribution Program; and an Agricultural Trade Promotion Program.
Market Facilitation Program
The Market Facilitation Program will provide direct payment to producers through Farm Service Agency county offices and $14.5 billion of the total funds will be allocated to this program. Funds will be divided between specialty crops, non-specialty crops, and dairy and pork.
Non-specialty crops include alfalfa hay, canola, corn, sorghum, soybean, and wheat. Specialty crops cover tree nuts, sweet cherries, cranberries, and grapes.
The major difference in this year’s program is that payments will be paid as one single payment per county, as opposed to by commodity. Payments will be evaluated on a per-county basis and based on assessment of trade damage in the county.
Bill Northey, USDA undersecretary for farm production and conservation, said this difference was implemented in order to ensure farmers had flexibility during this year’s planting season to plant what works for them.
“This economic decision will not be impacted by the payment they receive, depending on which production they choose,” Northey said.
Payments will be received based on county acres of production in 2019 and commodity impact, and are not a blended rate like last year. Three sets of payments are scheduled, with the first expected to arrive sometime in late July or early August, and two subsequent payments to follow later if a trade deal is not reached with China.
Food Purchase and Distribution Program
The second component of the relief strategy will be to appropriate $1.4 billion to purchase surplus commodities affected by trade retaliation, such as fruits and vegetables, beef, lamb and pork, milk, and some processed foods.
Purchased products will be utilized in food banks and school lunch programs in order to provide aid to those requiring nutrition assistance. Commodities will be purchased in phases, similar to last year, in order to match food bank capacities and ensure a variety of products are available to hungry citizens.
Agricultural Trade Promotion Program
The final component of the relief program will be to allocate an additional $100 million to cooperators to develop, enhance and grow new markets. This is an increase to the $600 million appropriated last year.
Exact payment amounts will vary from county to county, and program specifications will be released in the future. — Anna Miller, WLJ editor
