WASHINGTON — The Trump administration has announced a plan for $12 billion in emergency aid for U.S. farmers hurt by escalating trade disputes with other countries, including China, the European Union, Mexico and Canada.
U.S. Secretary of Agriculture Sonny Perdue announced July 24 that USDA will take several actions to assist farmers in response to trade damage resulting from retaliatory imposition of tariffs on U.S. goods.
USDA said the agency will authorize up to $12 billion in programs, which is in line with the estimated $11 billion impact of the unjustified retaliatory tariffs on U.S. agricultural goods. These programs will assist agricultural producers to meet the costs of disrupted markets.
“This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy,” Perdue said. “The president promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong. Unfortunately, America’s hard-working agricultural producers have been treated unfairly by China’s illegal trading practices and have taken a disproportionate hit when it comes illegal retaliatory tariffs. USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations. The programs we are announcing today help ensure our nation’s agriculture continues to feed the world and innovate to meet the demand.”
The agriculture department pointed out that of the total unjustified retaliatory tariffs imposed on the U.S., a disproportionate amount was targeted directly at American farmers. Trade damage from such retaliation has impacted a host of U.S. commodities, including field crops like soybeans and sorghum, livestock products like milk and pork, and many fruits, nuts, and other specialty crops. High tariffs disrupt normal marketing patterns, affecting prices and raising costs by forcing commodities to find new markets.
Additionally, the department said, there is evidence that American goods shipped overseas are being slowed from reaching market by unusually strict or cumbersome entry procedures, which can affect the quality and marketability of perishable crops. This can boost marketing costs and discount U.S. prices, and adversely affect American producers.
USDA will use the following programs to assist farmers:
- The Market Facilitation Program, authorized under The Commodity Credit Corporation (CCC) Charter Act and administered by Farm Service Agency (FSA), will provide payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs. This support will help farmers manage disrupted markets, deal with surplus commodities, and expand and develop new markets at home and abroad.
- Additionally, USDA will use CCC Charter Act and other authorities to implement a Food Purchase and Distribution Program through the Agricultural Marketing Service to purchase unexpected surplus of affected commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs.
- Finally, the CCC will use its Charter Act authority for a Trade Promotion Program administered by the Foreign Agriculture Service (FAS) in conjunction with the private sector to assist in developing new export markets for U.S. farm products.
American Farm Bureau Federation President Zippy Duvall said the $12 billion package of agricultural assistance “will provide a welcome measure of temporary relief to our farmers and ranchers who are experiencing the financial effects of the trade war. This should help many of our farmers and ranchers weather the rough road ahead and assist in their dealings with their financial institutions.”
However, Duvall added, “We cannot overstate the dire consequences that farmers and ranchers are facing in relation to lost export markets. Our emphasis continues to be on trade and restoring markets, and we will continue to push for a swift and sure end to the trade war and the tariffs impacting American agriculture.”
U.S. soybean producers have been among the hardest hit by imposition of tariffs on exported product. In 2017, China imported 31percent of U.S. production, equal to 60 percent of total U.S. exports and nearly one in every three rows of harvested beans. Since late May, U.S. soy prices have dropped more than $2 per bushel.
The American Soybean Association said that 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. 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.
John Heisdorffer, ASA president, stated, “Our best course of action is to expand other markets and develop new ones to buy the soybeans we’re not selling to China. This means finishing the NAFTA (North American Free Trade Agreement) negotiations as soon as possible so we can begin talks on new bilateral agreements with other key soybean markets including Japan, Vietnam, Indonesia and the Philippines.”
Kevin Skunes, president of the National Corn Growers Association and a North Dakota farmer, said, “NCGA appreciates the administration’s recognition of the harm to producers caused by tariffs and trade uncertainty. The fine print will be important. We know the package won’t make farmers whole but look forward to working with USDA on the details and implementation of this plan.”
“NCGA’s grower members are confronting their fifth consecutive year of declining farm incomes while facing high levels of uncertainty due to ongoing trade disputes and disruptions in the ethanol markets,” Skunes added. “Corn farmers prefer to rely on markets, not an aid package, for their livelihoods.”
The CCC is a Depression-era program created as a division of the USDA in 1933 to offer a financial backing for farmers. The program allows the CCC to borrow up to $30 billion from the Treasury Department to “stabilize, support and protect farm income and prices.”
This initiative, which does not authorize any new money, does not need approval from Congress and is expected to go into effect by Labor Day.