All Posts from July 27, 2018

Trump Announces $12 B Farm Aid Package to Compensate for Trade Losses

USDA Secretary Sonny Perdue on July 24 announced a $12 billion aid program to help U.S. farmers negatively impacted by tariffs and ongoing trade uncertainty. According to Perdue, the funds will be paid out through three programs administered by USDA under the Commodity Credit Corporation (CCC) Charter Act.

“Today we’re formally announcing that the Trump administration will be taking several actions to assist farmers in response to the trade damage caused by the illegal retaliatory tariffs that have been imposed on the U.S. in the past few months,” Perdue said in a press conference on Tuesday. “This administration will not stand by while our hard-working agriculture producers bear the brunt of unfriendly and illegal tariffs enacted by other nations.”

The aid package will be structured through direct payments to farmers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs; purchases of foods, including fruits, nuts, rice, legumes, beef, pork, and milk for distribution to food banks and nutrition programs; and a trade promotion program to provide private sector assistance to develop new markets. Because the “one-time” package draws on CCC funds without authorizing any new money, the program does not need approval from Congress.

Specific details about how the program will work, how it will be implemented, and how farmers can sign up for payments have not been announced. According to USDA Undersecretary Greg Ibach, the details will be released closer to Labor Day, when USDA plans to fully implement the program. Payments are expected to start going to producers in September.

Bloomberg reported that the program was criticized by some Republicans in Congress, who said it failed to address the underlying problem of the White House’s own trade policies. Several major agricultural trade groups also weighed in, voicing both appreciation and skepticism that the program will be sufficient.

“The National Corn Growers Association (NCGA) appreciates the administration’s recognition of the harm to producers caused by tariffs and trade uncertainty,” said NCGA President Kevin Skunes. “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. Corn farmers prefer to rely on markets, not an aid package, for their livelihoods.”

The American Soybean Association (ASA) said the program “provides only short-term assistance,” and a longer‐term strategy is needed “to alleviate mounting soybean surpluses and continued low prices,” including a plan to remove harmful tariffs.

“Our best course of action is to expand other markets and develop new ones to buy the soybeans we’re not selling to China,” said ASA President John Heisdorffer. “That includes finishing NAFTA negotiations soon and establishing trade deals with Japan, Vietnam, Indonesia, and the Philippines.”

The White House attempted to head off criticism of the plan, and to ease farmer concerns about ongoing trade disputes. “When you have people snipping at your heels during a negotiation, it will only take longer to make a deal, and the deal will never be as good as it could have been with unity,” Trump said on Twitter on July 25. “Negotiations are going really well, be cool. The end result will be worth it!”

“Crops don’t grow overnight,” said Farmers for Free Trade (FFT) Executive Director Brian Kuehl. “Farmers and producers need time and long-term certainty to do their jobs, not constant chaos created by haphazard trade policy. Despite what President Trump tweets, his harmful trade policies are hurting farmers and families across the country.”

The Agricultural Retailers Association (ARA) had no comment on the new aid package, but ARA President and CEO Daren Coppock addressed the impact of an ongoing trade war on agriculture in an earlier op-ed (GM July 13, p. 1).

“If the U.S. loses even a share of its market for agricultural products to China or other export markets, there isn’t a farm bill program large enough to mitigate the short-term damage to farmers and their business partners,” Coppock wrote on July 6. “Despite noble intentions, the Agriculture Department cannot create a program to immediately restore broken trade relationships and reputations, mitigate the damage to input suppliers and grain merchants who serve farmers, or prevent our export customers from finding or creating new sources of supply.”

The Fertilizer Institute (TFI) said it is “closely following the new tariff’s impact on growers,” but issued no formal comment on the administration’s aid package.