The programs are designed to help farmers manage current trade disruptions
By Diego Flammini
The USDA is implementing three programs to help farmers impacted by tariffs.
This afternoon, Sonny Perdue, the secretary of agriculture, announced his agency is authorizing up to US$12 billion for the programs, which will help offset the estimated US$11-billion economic impact of trade tariffs on American agriculture.
Farmers will not be able to sign up for programs right away as the USDA prepares its materials, but the agency expects them to come into effect around Labor Day.
The first is called the Market Facilitation Program.
It will provide direct payments to corn, soybean, wheat, sorghum, cotton, dairy and hog producers “to help manage disruptive markets, deal with commodity surplus and expand new markets,” Perdue told reporters today during a conference call.
The program will use a predetermined formula to estimate payments for farmers.
“It will be a fairly simple sign up (process),” Brad Karmen, USDA assistant deputy administrator for farm programs, said during the media availability. “Basically for 2018, producers will tell us what they actually produced in 2018, (we will) multiply it by a payment rate and give them a payment based on that formula.”
The second offering is called the Food Purchase and Distribution Program.
Under this scheme, the USDA will purchase surpluses of affected commodities like fruits, nuts, and legumes, as well as some beef, pork and dairy products.
Those products will be distributed through nutrition programs and food banks.
The third offering, the Trade Promotion Program, will work with the private sector to develop new export markets for American farmers.
The USDA does not identify these programs as permanent solutions for the ag industry. Rather, they will serve as a stopgap to help complete trade talks and guide producers through these challenging times.
“We hope (these programs) will allow time to conclude trade negotiations that will open (export) markets and restart trade,” Greg Ibach, undersecretary for marketing and regulatory programs, said during the conference call.
Ag groups appear cautiously optimistic about the USDA’s program announcement.
The American Soybean Association and National Corn Growers Association released statements showing appreciation for the USDA’s actions, but highlighting the need for global trade.
"While soybean growers appreciate the Administration’s recognition that tariffs have caused reduced exports and lower prices, the announced plan provides only short-term assistance," the soybean association's statement said. "ASA continues to call for a longer-term strategy to alleviate mounting soybean surpluses and continued low prices, including a plan to remove the harmful tariffs."
A joint statement from the National Association of Wheat Growers and U.S. Wheat Associates echoed similar sentiments.
This damage is self-afflicted, so the Administration is right to take steps to address it, but the next step should be ending the trade war," the joint statement said.