U.S. Announces 2nd Round of Financial Aid for Farmers Hit by Trade War

U.S. Dept. of Agriculture building, Washington, D.C.

The U.S. Department of Agriculture today announced it would plow $16 billion into financial assistance for farmers to help make up for financial losses from President Donald Trump’s trade tit-for-tat with China.

“After China decided to renege on commitments they already made, [Trump] directed me immediately to implement a program,” U.S. Agriculture Secretary Sonny Perdue said Thursday in a call with reporters. “All of this would have been moot if China had acted appropriately and fairly” in the latest round of trade talks between the world’s largest and second-largest economies.

This year’s program will look a lot like one launched last year, which was $12 billion. However, the lion’s share of the aid program will go to the Market Facilitation Program, one of three prongs. Under that program, aid will be doled out at a flat rate to producers of all of the qualifying commodities, which will need to be listed by the USDA. Unlike last year, though, payment rates will vary by county. The MFP is getting $14.8 billion of the total.

The MFP will cover a range of commodities, some of which were listed by USDA officials on the call, including soybeans, hay, barley, canola, cotton, flax seed, lentils, long- and medium-grain rice, mustard seeds, grape seeds, oats, sesame seeds, safflower and wheat. Dairy and pork farmers also will be able to apply for funds as they were last year. 

The federal government isn’t finished determining the county-by-county reimbursement rates. Those details are due in an upcoming USDA rule, likely to be published at the end of July. Perdue said the proposed rule is under review by the White House Office of Management and Budget now.

$1.4 billion will go to a food purchasing and distribution program that benefits schools and food pantries around the country, and $100 million will go into a program that helps farmers diversify into new markets. 

Perdue told reporters Thursday that farmers should plant crops as they would had there been no financial aid package. If you don’t plant, you don’t get paid, he said. Like last year, farmers should apply with their county Farm Service Agency office, but not yet. The FSA does not have the final numbers.

The money for the aid package is coming from the Treasury, but Perdue was careful to say that it was Trump’s intent to earmark money collected by the U.S. from tariffs for the package. By law, tariff collections get deposited into the Treasury, he said, but then get appropriated out of the Treasury into the Commodity Credit Corporation, as it did last year.

Perdue said the aid distribution will skew heavily toward the first of the three payment waves. He does not expect the U.S. and China to strike a trade agreement by the end of July, he said. Therefore, the first payment is all but guaranteed, while the next two payments are contingent on trade negotiations.

“We would love China to come to the table any time,” Perdue said. “We made great progress … but then China reneged” on its promises. “It is really in China’s court,” he said.

–Dan Macy

 

Leave a Reply