Agriculture Secretary Sonny Perdue today announced up to $12 billion in programs to aid farmers affected by the retaliatory trade tariffs associated with the ongoing negotiations between the U.S. and China as well as several other countries.
The U.S. Department of Agriculture said 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 -- have all been affected. Additionally, the agency 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.
As such, USDA will use the following programs to assist farmers:
- The Market Facilitation Program, authorized under The Commodity Credit Corp. (CCC) Charter Act and administered by the 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 the CCC Charter Act and other authorities to implement a Food Purchase & Distribution Program through the Agricultural Marketing Service to purchase unexpected surpluses of affected commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs.
- Finally, 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.
USDA said the program total of up to $12 billion is in line with the estimated $11 billion impact on U.S. agricultural goods. Further details about the exact nature of the relief measures will be unveiled later in the summer, USDA officials said.
“This is a short-term solution to allow President [Donald] 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.”
He continued, “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.”
Perdue noted that, for decades, China has engaged in unfair practices as well as in the forced transfer or outright threat of intellectual property. “It’s clear to everyone that President Trump has gotten China’s attention like never before,” he said.
“The programs we are announcing today are a firm statement that other nations cannot bully our agricultural producers to force the United States to cave in,” Perdue added.
Long-term solution needed
The U.S. agriculture industry’s reaction to the USDA announcement was mostly positive as many groups expressed appreciation for the “temporary” assistance to farmers. However, several emphasized the necessity of achieving a long-term solution for market restoration to key trading partners.
“The $12 billion package of agricultural assistance announced today by the Administration will provide a welcome measure of temporary relief to our farmers and ranchers who are experiencing the financial effects of the trade war,” American Farm Bureau Federation president Zippy Duvall said. “This should help many of our farmers and ranchers weather the rough road ahead and assist in their dealings with their financial institutions.”
He continued, “We are grateful for the Administration’s recognition that farmers and ranchers needed positive news now, and this will buy us some time. This announcement is substantial, but 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.”
The National Pork Producers Council (NPPC) hailed the news, as pork has been heavily targeted by retaliatory tariffs.
“President Trump has said he has the back of U.S. farmers and today demonstrated this commitment with an aid package to sustain American agriculture cut off from critical export markets as his Administration works to realign U.S. global trade policy,” said NPPC president Jim Heimerl, a pork producer from Johnstown, Ohio.
U.S. pork began the year in expansion mode to capitalize on unprecedented global demand but now faces punitive tariffs on 40% of its exports, he explained. “The restrictions we face in critical markets such as Mexico and China – our top two export markets by volume last year – have placed American pig farmers and their families in dire financial straits. We thank the President for taking immediate action,” Heimerl said.
The National Milk Producers Federation (NMPF), which has been engaged in ongoing discussions with USDA about how to reduce the economic harm caused by the trade disagreements between the U.S. and other nations, said the newly announced plan “should provide badly needed economic assistance to dairy farmers facing significant financial losses."
“We thank the Administration for incorporating our recommendations. We will continue working with USDA on program details to achieve provisions that are efficient, cost effective and equitable to farmers of all sizes in all regions,” NMPF president and chief executive officer Jim Mulhern said.
NMPF is also encouraging the Administration to conclude the North American Free Trade Agreement negotiations and pursue new trade opportunities, “which is the long-term solution to the current situation. We need this assistance for now, but we also need new trade deals that allow our farmers to reach customers in other nations,” Mulhern said.
Sen. Chuck Grassley (R., Iowa) released a statement saying he doesn’t fault the President for trying to get a better deal for Americans but said it is unfair fair to expect farmers to bear the brunt of retaliation for the entire country in the meantime.
“The President’s announcement of billions of dollars in aid that will be made available to struggling farmers later this year is encouraging for the short term. What farmers in Iowa and throughout rural America need in the long term are markets and opportunity, not government handouts,” Grassley said.