U.S. Secretary of Agriculture Sonny Perdue today announced details of actions the U.S. Department of Agriculture (USDA) will take to assist farmers hurt by the trade war after the federal government imposed tariffs. Last month, President Donald Trump authorized up to $12 billion in programs.
“Early on, the President instructed me, as Secretary of Agriculture, to make sure our farmers did not bear the brunt of unfair retaliatory tariffs. After careful analysis by our team at USDA, we have formulated our strategy to mitigate the trade damages sustained by our farmers. Our farmers work hard, and are the most productive in the world, and we aim to protect them,” said Secretary Perdue.
These programs will assist agricultural producers to meet the costs of disrupted markets:
–USDA’s Farm Service Agency (FSA) will administer the Market Facilitation Program (MFP) to provide payments to corn, cotton, dairy, hog, sorghum, soybean, and wheat producers starting September 4, 2018. An announcement about further payments will be made in the coming months, if warranted.
–USDA’s Agricultural Marketing Service (AMS) will administer a Food Purchase and Distribution Program to purchase up to $1.2 billion in commodities unfairly targeted by unjustified retaliation. 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.
“President Trump has been standing up to China and other nations, sending the clear message that the United States will no longer tolerate their unfair trade practices, which include non-tariff trade barriers and the theft of intellectual property. In short, the President has taken action to benefit all sectors of the American economy – including agriculture – in the long run,” said Secretary Perdue. “It’s important to note all of this could go away tomorrow, if China and the other nations simply correct their behavior. But in the meantime, the programs we are announcing today buys time for the President to strike long-lasting trade deals to benefit our entire economy.”
Secretary Perdue Overview of Trade Mitigation Package
Background on Market Facilitation Program:
MFP is established under the statutory authority of the Commodity Credit Corporation (CCC) and 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.
Interested producers can apply after harvest is 100 percent complete and they can report their total 2018 production. Beginning Sept. 4, MFP applications will be available online at www.farmers.gov/mfp. Producers will also be able to submit their MFP applications in person, by email, fax, or by mail.
Eligible applicants must have an ownership interest in the commodity, be actively engaged in farming, and have an average adjusted gross income (AGI) for tax years 2014, 2015, and 2016 of less than $900,000. Applicants must also comply with the provisions of the “Highly Erodible Land and Wetland Conservation” regulations. On September 4, 2018, the first MFP payment periods will begin. The second payment period, if warranted, will be determined by the USDA.
Market Facilitation Program
|Commodity||Initial Payment Rate||Est. Initial Payment**|
|Cotton||$0.06 / lb.||$276,900|
|Corn||$0.01 / bu.||$96,000|
|Dairy (milk)||$0.12 / cwt.||$127,400|
|Pork (hogs)||$8.00 / head||$290,300|
|Soybeans||$1.65 / bu.||$3,629,700|
|Sorghum||$0.86 / bu.||$156,800|
|Wheat||$0.14 / bu.||$119,200|
** Initial payment rate on 50% of production
The initial MFP payment will be calculated by multiplying 50 percent of the producer’s total 2018 actual production by the applicable MFP rate. If CCC announces a second MFP payment period, the remaining 50 percent of the producer’s total 2018 actual production will be subject to the second MFP payment rate.
MFP payments are capped per person or legal entity at a combined $125,000 for dairy production or hogs. Payment for dairy production is based off the historical production reported for the Margin Protection Program for Dairy (MPP-Dairy). For existing dairy operations, the production history is established using the highest annual milk production marketed during the full calendar years of 2011, 2012, and 2013. Dairy operations are also required to have been in operation on June 1, 2018 to be eligible for payments. Payment for hog operations will be based off the total number of head of live hogs owned on August 1, 2018.
MFP payments are also capped per person or legal entity at a combined $125,000 for corn, cotton, sorghum, soybeans and wheat.
Background on Food Purchase and Distribution Program:
The amounts of commodities to be purchased are based on an economic analysis of the damage caused by unjustified 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.
|Commodity||Target Amount (in $1,000s)|
Program details yet to be determined
|Commodity||Target Amount (in $1,000s)|