Pile of Trade War Buttons With US Flag, 3d illustration cbies/ThinkstockPhotos

Farm groups pleased with trade aid

USDA rolls out details of $16 billion trade aid package in wake of ongoing trade war.

Agriculture Secretary Sonny Perdue on Thursday (May 23) released the details of another round of trade aid for farmers impacted by retaliatory tariffs and trade disruption.

“President Trump has great affection for America’s farmers and ranchers, and he knows they are bearing the brunt of these trade disputes,” Perdue said. “In fact, I’ve never known of a president that has been more concerned or interested in farmer wellbeing and long-term profitability than President Trump. The plan we are announcing today ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners.”

The trade aid package features a three-prong approach similar to the 2018 package. The components:

  • Market Facilitation Program, which will provide $14.5 billion in direct payments to producers.
  • Food Purchase and Distribution Program, which will use $1.4 billion to purchase surplus commodities.
  • Agricultural Trade Promotion Program, which assists in developing new markets. A total of $100 million is allocated for this program.

Here’s what we’re hearing from ag industry groups in reaction to the announcement:

“This trade aid will help repair some of the damage inflicted upon U.S. pork producers,” said David Herring, a pork producer from Lillington, N.C., and president of the National Pork Producers Council. "The U.S. pork industry has been one of the most adversely affected sectors, receiving a one-two punch in the form of a 50% punitive tariff from China on top of the existing 12% duty and, until recently, a 20% punitive tariff from Mexico.”

“While the share for dairy is not yet known, this trade relief package will include important market facilitation payments to dairy farmers as well as financial resources to continue USDA purchases of dairy products including fresh, nutritious milk to benefit food banks and food insecure Americans,” said Michael Dykes, CEO and president, International Dairy Foods Association. “Retaliatory tariffs by China and other important markets have led to huge losses for our IDFA members while the Chinese market has increased dairy imports since the initial tariffs went into effect last July. Sales of U.S. dairy to China are down through March, with U.S. cheese exports declining 44% and U.S. whey to China falling 32% during the past nine months. What we need is a predictable, transparent and rules-based system of international trade that provides the agricultural economy with certainty and a clear path to growth.”

The American Soybean Association says the trade aid is appreciated, yet only a temporary solution.

“The key word from today’s announcement is ‘facilitation’,” said Davie Stephens, American Soybean Growers Association president and soybean grower from Clinton, Kentucky. “Trade assistance will only facilitate soy grower’s ability to farm, not make their losses whole or tariff woes disappear long term. Trade assistance will only help in the short term.”

The National Corn Growers Association welcomed the aid and called on USDA to update the Market Facilitation Program to factor market impacts into the calculation of Market Facilitation Program payment rates. NCGA analysis showed the average price loss of 20 cents per bushel from May 2018 to April 2019. As trade talks with China lagged on in March and April of 2019, losses widened closer to 40 cents per bushel.

“NCGA looks forward to continuing our dialogue with the Administration to craft a complete package that will provide corn farmers with more equitable short-term relief while also supporting and expanding the market opportunities farmers need most,” said NCGA President Lynn Chrisp.

The National Association of Wheat Growers may similar comments.

“While we appreciate the trade mitigation program, it doesn’t make farmers whole,” said NAWG President and Lavon, Texas, farmer Ben Scholz. “The U.S. exports 50% of its wheat which means we need a long-term solution.”

The National Milk Producers Federation estimates dairy farmers have lost at least $2.3 billion through March due to higher tariffs against U.S. dairy products, which has lowered milk prices for all producers.

“We know that USDA is concerned about the damage being done to dairy farmers by ongoing tariff battles,” said Jim Mulhern, NMPF President and CEO. “We hope it will use the full range of tools available to provide a large segment of the payment in the first tranche to appropriately assist milk producers who have experienced a prolonged downturn in prices because of these conflicts.”

Here’s what lawmakers are saying:

“Too many farmers are struggling as this administration continues to pursue a chaotic trade agenda,” said Sen. Debbie Stabenow, ranking member of the Senate Committee on Agriculture, Nutrition and Forestry. “Our farmers need a focused strategy, access to export markets, and long-term stability. Unfortunately, this complex scheme leaves them with more questions than answers. I have a number of concerns about whether this plan is fair and equitable to all farmers. Government checks are no replacement for lost markets, and this temporary support will only go so far.”

“Today’s announcement from USDA leaves far more questions than answers, and the department has provided dangerously little detail about how this most recent bailout will operate,” said Rep. Marcia L. Fudge, D-Ohio, House Agriculture Nutrition, Oversight, and Department Operations Subcommittee chairwoman. “What we do know is that this is the second time USDA has been asked to provide a supposed ‘one-time’ fix for the problems the administration has caused for our farmers.  Even more concerning are reports that more than half of the administration’s previously issued bailout funds were paid to only 10% of U.S. farmers.”

Source: USDA, National Pork Producers Council, International Dairy Foods Association, Office of Sen. Debbie Stabenow, American Soybean Association, House Agriculture Committee, National Corn Growers Association, National Association of Wheat Growers, National Milk Producers Federation, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. 
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