The package includes three programs and totals US$16 billion
By Diego Flammini
The USDA is providing financial assistance to farmers affected by disrupted trade with China for the second consecutive year.
American farmers will receive US$16 billion in federal aid to offset market conditions and profit uncertainty caused by the trade war with China.
“The package we are announcing today ensures farmers will not bear the brunt of (unfair) trade practices by China or any other nation,” Agriculture Secretary Sonny Perdue said on a conference call Thursday. “While farmers themselves would tell you they’d rather have trade than aid, (and) without the trade that’s been possible, they’re going to need some support from a profitability standpoint.”
This recent package is in addition to the $12 billion of federal help the USDA announced last year.
The latest plan is like last year’s as it will include the same three Market Facilitation, Food Purchase and Distribution, and Agricultural Trade Promotion programs.
The Market Facilitation Program, which provides direct payments to producers, will receive US$14.1 billion.
The program itself is split into three categories – specialty crops, non-specialty crops, and dairy and pork.
Non-specialty crops include corn, soybeans, wheat, canola, sorghum and cotton, while specialty crops include tree nuts, sweet cherries, cranberries and fresh grapes.
Because of the time of year, the USDA made changes to how it will calculate payments.
Last year, farmers of non-specialty crops received their payments based on total production.
This year, the USDA will distribute money based on individual county figures, said Bill Northey, the USDA’s undersecretary of farm production and conservation.
“We will look at one single payment,” he said on the conference call.
USDA Chief Economist Rob Johannson’s team will evaluate the trade damage each county has faced. That number will then be placed into a formula, Northey said.
“We divide (the dollar amount) by the acres planted within that county, and then have a single payment no matter which of those crops that you plant,” Northey said. “We’re still in a place where some producers are making planting decisions and we need to make sure that folks have the complete flexibility in this challenging planting season to plant what works for them.”
Payments for specialty crop producers will work differently than other grain farmers.
The USDA will make payments “based on the (financial) impact to the (individual) commodity times the acres of production,” Northey said.
The USDA will pay dairy farmers per hundredweight based on production history, and pork producers will receive payments based on an inventory timeframe the USDA chooses.
The department plans to distribute payments during three windows: one in late July or early August, one in November and one in early 2020. Officials are still working out details on eligibility and payment rates.
The July or August payments are all but a certainty and the later ones could depend on how trade talks continue with China, Perdue said.
The Food Purchase and Distribution Program will receive US$1.4 billion.
The Agricultural Marketing Service will use the funds to purchase surplus fruits, vegetables, beef, pork and other products for distribution to schools, food banks and other avenues.
And the Agricultural Trade Promotion Program will see US$100 million dedicated to developing new export opportunities.