USDA gives details on trade war ag aid package

U.S. Secretary of Agriculture Sonny Perdue announced more details Thursday of a $16 billion package aimed at supporting American agricultural producers while the Trump Administration continues to work on trade.

In May, President Donald Trump directed Perdue to craft a relief strategy in line with the estimated impacts of retaliatory tariffs on U.S. agricultural goods and other trade disruptions, a release from USDA issued Thursday said. The Market Facilitation Program, or MFP, Food Purchase and Distribution Program, or FPDP, and Agricultural Trade Promotion Program, or ATP, are set to assist agricultural producers while Trump works to address long-standing market access barriers, the release said.

Signup for the Market Facilitation Program will begin Monday at local FSA offices and will run through Friday, Dec. 6.

“China and other nations have not played by the rules for a long time, and President Trump is the first president to stand up to them and send a clear message that the United States will no longer tolerate unfair trade practices,” Perdue said. “The details we announced today ensure farmers will not stand alone in facing unjustified retaliatory tariffs while President Trump continues working to solidify better and stronger trade deals around the globe.

“Our team at USDA reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers. Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them,” Perdue added.

Ongoing trade war

China and the United States have been engaged in what some call a trade war, with increasing tariffs being imposed by both countries.

Trump started imposing tariffs on Chinese goods last year, with China retaliating on products including agricultural products.

A tariff typically is a tax imposed on imported goods to try to increase their prices to increase purchases of domestic goods. The company buying the imported product typically pays the tariff, and generally passes the cost on to its consumers — so the people who usually pay the tariff end up being the people buying the product in the end.

Trump has been criticizing China for its trade practices since before he ran for president. He criticized its trade practices while campaigning in 2016.

In January 2018 he started imposing tariffs on some products, and in March 2018 imposed tariffs on steel and aluminum.

In April 2018, China started retaliating, imposing tariffs on about $3 billion in U.S. goods.

The war with tariffs has been ongoing since, although talks to resolve the issues have also been ongoing, with trade talks between the countries set for next week.

In response to Trump’s tariffs, China blocked imports of U.S. soybeans and raised tariffs on other farm products.

The Associated Press reports that Chinese officials said this week the country plans to start increasing its importation of U.S. agricultural goods, although they said that has nothing to do with the talks set for next week.

China agreed last year to buy more U.S. agricultural products, but canceled that after Trump again increased tariffs.

Market assistance

The release said that, under MFP, FSA will make payments to producers of eligible crops, under the authority of the Commodity Credit Corporation.

County payment rates range from $15 to $150 per acre, depending on the impact of unjustified trade retaliation in that county, the USDA release said.

A release forwarded by the Montana Grain Growers Association says the rates for Chouteau County are $16 per acre, and the rates for Blaine, Hill and Liberty counties are $15 an acre.

The USDA release said the payments will be made to producers of alfalfa hay, barley, canola, corn, crambe, dried beans, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, millet, mustard seed, oats, peanuts, rapeseed, rye, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, triticale, upland cotton and wheat.

“MFP assistance for those non-specialty crops is based on a single county payment rate multiplied by a farm’s total plantings of MFP-eligible crops in aggregate in 2019,” the release said.

The producers total payment for eligible plantings cannot exceed the total acreage planted in 2018.

MFP payments will be made in up-to three tranches, with the second and third tranches evaluated as market conditions and trade opportunities dictate. If conditions warrant, the second and third tranches will be made in November and early January, respectively. The first tranche will be comprised of the higher of either 50 percent of a producer’s calculated payment or $15 per acre, which may reduce potential payments to be made in tranches two or three. USDA will begin making first tranche payments in mid-to-late August.

Dairy producers and specialty crop producers also are eligible for benefits.

Acreage of non-specialty crops and cover crops must be planted by Aug. 1 to be considered eligible for MFP payments.

MFP payments are limited to $250,000 per person or legal entity for each specialty and non-specialty crops and dairy or hog producers, with the combined payments per person or entity limited to $500,000.

Eligibility also is limited by the producer’s average adjusted gross income and they must derive most of their income through farming and ranching.

Producers who filed a prevented planting claim due to natural disasters such as flooding and planted a FSA-certified cover crop, with the potential to be harvested qualify for a $15 per acre payment. Acres that were never planted in 2019 are not eligible for a MFP payment.

In June, House Resolution 2157, the Additional Supplemental Appropriations for Disaster Relief Act of 2019, that was passed by Congress was signed into law by President Trump, requiring a change to the first round of MFP assistance provided in 2018.

Producers previously deemed ineligible for MFP in 2018 because they had an average AGI level higher than $900,000 may now be eligible for 2018 MFP benefits. Those producers must be able to verify 75 percent or more of their average AGI was derived from farming and ranching to qualify. This supplemental MFP signup period will run parallel to the 2019 MFP signup, from July 29 through December 6, 2019.

For more information on the MFP, people can visit http://www.farmers.gov/mfp or contact your local FSA office, which can be found at http://www.farmers.gov/.

In the USDA Food Purchase and Distribution Program, the Agricultural Marketing Service will use up to $1.4 billion o purchase surplus commodities affected by trade retaliation such as fruits, vegetables, some processed foods, beef, pork, lamb, poultry and milk for distribution by the Food and Nutrition Service to food banks, schools and other outlets serving low-income individuals.

In the Agricultural Trade Promotion Program, USDA’s Foreign Agricultural Service 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. Last week, USDA awarded $100 million to 48 organizations through the ATP to help U.S. farmers and ranchers identify and access new export markets, the USDA release said.