U.S farmers received some good news as aid started flowing from the government and a new trade deal was agreed to with our southern neighbor.
U.S. farmers now know how $4.7 billion of the $12 billion share of programs to help the U.S. agricultural sector will be utilized. The direct government aid will compensate for market losses caused by Chinese tariffs. Growers of soybeans will get $3.6 billion, with pork producers receiving the second highest payment of $290 million, reported St. Louis Post-Dispatch (Aug. 27).
Specifically, USDA will focus on three programs to help U.S. farmers:
- USDA’s Farm Service Agency (FSA) will administer the Market Facilitation Program (MFP) to provide payments to corn, dairy, hog, sorghum, soybean and wheat producers starting Sept. 4.
- USDA’s Agricultural Marketing Service (AMS) will administer a Food Purchase and Distribution Program to purchase up to $1.2 billion in commodities targeted with tariffs by China. USDA’s Food and Nutrition Service (FNS) will distribute these commodities through nutrition assistance programs such as The Emergency Food Assistance Program (TEFAP) and child nutrition programs.
- Through the Foreign Agricultural Service’s (FAS) Agricultural Trade Promotion Program (ATP), $200 million will be made available to develop foreign markets for U.S. agricultural products. The program will help U.S. agricultural exporters identify and access new markets and help mitigate the adverse effects of other countries’ restrictions.
Although a welcome benefit for farmers, most argued that trade is what is most needed for the U.S. agricultural sector. “This trade assistance is welcome news for the soybean farmers who have suffered from trade retaliation and have a crop to sell this year,” Missouri Farm Bureau President Blake Hurst said.
“Short-term aid does not create long-term market stability,” said Doug Schroeder, Illinois Soybean Growers vice chairman. “Producers need trade, not aid.”
USDA noted it will issue further payment in the future, if necessary.
The news follows recent developments regarding NAFTA. The U.S. and Mexico reached a deal to update their trade agreements, which will be called The United States-Mexico Trade agreement, according to President Trump. Trump added that the deal will be beneficial for farmers and manufacturers. A Mexican official stated Canada will now “re-engage” in the negotiations, reported CNBC (Aug. 27).
Additionally, China formally requested “dispute consultations” regarding U.S. tariffs with the WTO. The request focuses on the recently-deployed $16 billion in tariffs issued Aug. 23, reported Yakima Herald-Republic (Aug. 27).
We covered the initial announcement of the programs in a July 23 article in The Food Institute Blog entitled “Cavalry en Route for U.S. Agricultural Producers” that first outlined the programs. The three major components of the initial announcement via three special filings placed for public inspection in the Federal Register by USDA’s Commodity Credit Corporation (CCC) Aug. 27, including two rules (Agricultural Trade Promotion Program and Market Facilitation Program) and a notice of available funds for the Market Facilitation Program. More information regarding each program can be found below.
Market Facilitation Program
The Market Facilitation Program (MFP) was established under the statutory authority of the CCC and will be administered by FSA. For each commodity covered, the payment rate will be dependent upon the severity of the trade disruption and the period of adjustment to new trade patterns, based on each producer’s actual production.
| Commodity | Initial Payment Rate |
Estimated Initial Payment* |
|---|---|---|
| Corn | $0.01 / bushel | $96,000 |
| Dairy (milk) | $0.12 / cwt. | $127,400 |
| Pork (hogs) | $8.00 / head | $290,300 |
| Soybeans | $1.65 / bushel | $3,629,700 |
| Sorghum | $0.86 / bushel | $156,800 |
| Wheat | $0.14 / bushel | $119,200 |
*In 1,000’s
Food Purchase and Distribution Program
The amounts of commodities to be purchased are based on an economic analysis of the damage caused by tariffs imposed on the crops listed below. Their damages will be adjusted based on several factors and spread over several months in response to orders placed by states participating in the FNS nutrition assistance programs. USDA noted program details for almonds and sweet cherries are yet to be determined, but expected to purchase $63.3 million and $11.5 million of the products, respectively.
|
Commodity |
Target Amount* |
Commodity |
Target Amount* |
|---|---|---|---|
|
Apples |
$93,400 |
Apricots |
$200 |
|
Beef |
$14,800 |
Blueberries |
$1,700 |
|
Cranberries |
$32,800 |
Dairy |
$84,900 |
|
Figs |
$15 |
Grapefruit |
$700 |
|
Grapes |
$48,200 |
Hazelnuts |
$2,100 |
|
Kidney Beans |
$14,200 |
Lemons/Limes |
$3,400 |
|
Lentils |
$1,800 |
Macadamia |
$7,700 |
|
Navy Beans |
$18,000 |
Oranges (Fresh) |
$55,600 |
|
Orange Juice |
$24,000 |
Peanut Butter |
$12,300 |
|
Pears |
$1,400 |
Peas |
$11,800 |
|
Pecans |
$16,000 |
Pistachios |
$85,200 |
|
Plums/Prunes |
$18,700 |
Pork |
$558,800 |
|
Potatoes |
$44,500 |
Rice |
$48,100 |
|
Strawberries |
$1,500 |
Sweet Corn |
$2,400 |
|
Walnuts |
$34,600 |
Total |
$1,238,800 |
*In 1,000’s
Agricultural Trade Promotion Program
The FAS will administer the ATP under authorities of the CCC. The ATP will provide cost-share assistance to eligible U.S. organizations for activities such as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research, and technical assistance. Applications for the ATP will be accepted until Nov. 2, 2018 or until funding is exhausted. Funding should be allocated to eligible participants in early 2019. The ATP is meant to help all sectors of U.S. agriculture, including fish and forest product producers, mainly through partnerships with non-profit national and regional organizations. Some $200 million will be available under the program.