President Donald Trump and Agriculture Secretary Sonny Perdue Dec. 17 launched the second and final round of trade mitigation payments aimed at assisting farmers suffering from damage due to trade retaliation by foreign nations.
The Trump administration has called the tariffs that other countries have imposed unjustified, but Trump first imposed tariffs on imported steel and aluminum on national security grounds. The other countries followed by imposing tariffs on United States farm products and other goods.
Until the announcement, it was unclear whether the Trump administration would follow through with the second round of payments. It had been reported that Perdue and Assistant Secretary of Agriculture Steve Censky said the Office of Management and Budget was trying to delay or stop the payments in hopes that the Chinese would start buying more U.S. farm products. The Chinese did increase purchases, but they still make up only a small portion of what they bought in years past.
Instead, Trump tweeted, “Today I am making good on my promise to defend our Farmers & Ranchers from unjustified trade retaliation by foreign nations. I have authorized Secretary Perdue to implement the 2nd round of Market Facilitation Payments. Our economy is stronger than ever—we stand with our Farmers!”
In a release, Perdue said, “The president reaffirmed his support for American farmers and ranchers and made good on his promise, authorizing the second round of payments to be made in short order. While there have been positive movements on the trade front, American farmers are continuing to experience losses due to unjustified trade retaliation by foreign nations. This assistance will help with short-term cash flow issues as we move into the new year.”
Producers of certain commodities will now be eligible to receive Market Facilitation Program payments for the second half of their 2018 production. According to a chart issued by USDA, the total cost of the commodity payments will be $9.6 billion.
Producers need only sign up once for the MFP to be eligible for the first and second payments. The MFP sign-up period opened in September and runs through January 15, 2019, with information and instructions provided at www.farmers.gov/mfp.
Producers must complete an application by Jan. 15, 2019, but have until May 1, 2019, to certify their 2018 production.
For farmers who have already applied, completed harvest and certified their 2018 production, a second payment will be issued on the remaining 50 percent of the producer’s total production, multiplied by the MFP rate for the specific commodity.
The MFP provides payments to almond, cotton, corn, dairy, hog, sorghum, soybean, fresh sweet cherry and wheat producers who have been significantly impacted by actions of foreign governments resulting in the loss of traditional exports. The MFP is established under the statutory authority of the Commodity Credit Corporation CCC Charter Act and is under the administration of USDA’s Farm Service Agency. Eligible producers should apply after harvest is complete, as payments will only be issued once production is reported.
As with the first tranche, payments will be given in the following amounts on 50 percent of a farmer’s production:
Corn: 1 cent a bushel;
Cotton: 6 cents a pound;
Sorghum: 86 cents a bushel;
Soybeans: $1.65 a bushel; and
Wheat: 14 cents a bushel.
Pork producers will be paid $8 a head for 50 percent of the pigs they owned on Aug. 1, while dairy farmers will receive a payment of 12 cents per hundredweight.
For farmers who have already applied, completed harvest, and certified their 2018 production, a second payment will be issued on the remaining 50 percent of the producer’s total production, multiplied by the MFP rate for the specific commodity.
USDA has also initiated two other programs:
USDA’s Agricultural Marketing Service is administering 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 is distributing these commodities through nutrition assistance programs, such as The Emergency Food Assistance Program and child nutrition programs. So far, USDA has procured some portion of 16 of the 29 commodities included in the program, totaling more than 4,500 truckloads of food. AMS will continue purchasing commodities for delivery throughout 2019.
Through the Foreign Agricultural Service’s Agricultural Trade Promotion program, $200 million is being 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. The application period closed in November with more than $600 million in requested activities from more than 70 organizations. FAS will announce ATP funding awards in early January.
Farm groups react
American Farm Bureau Federation President Zippy Duvall praised the release of the MFP funds.
“This latest trade mitigation package announcement will help our farmers and ranchers weather the continuing trade storm,” Duvall said in a news release. “We continue to feel price pressure and very real economic damage due to the trade actions other nations have taken against our U.S. farm exports. While this assistance package will help a number of our farm families during this year of severe economic challenge, the best way to provide lasting relief is to continue pushing for trade and tariff reform from trading partners like China, Canada, Mexico, India, Turkey and the European Union.”
Soybean farmers, who will receive the bulk of MFP funding, welcomed the news of a second payment.
“Soy growers are very thankful that President Trump understands the need for this payment on the full 2018 production and that the administration will deliver the second half of the aid as promised. While it will not make our losses whole, it will certainly help offset the drop in prices we have experienced since China cut off U.S. soybean imports,” said American Soybean Association President Davie Stephens, a soybean producer from Clinton, Kentucky.
“We saw some initial sales of U.S. soybeans to China last week, which was also welcomed news and we hope a sign that the trade war could be turning a corner as a result of President Trump’s recent meeting with President Xi.”
National Sorghum Producers Board of Directors Chairman Dan Atkisson, a sorghum farmer from Stockton, Kansas, said, “Sorghum producers are at the end of a difficult harvest season in many regions of the Sorghum Belt, and these payments will help mitigate the drop in prices sorghum farmers have faced since China stopped importing U.S. sorghum earlier this spring.
“We are also encouraged by the recent soybean purchases made by China, and we remain hopeful these sales are a sign negotiations between the U.S. and China will soon lead to a positive resolve. U.S. sorghum farmers look forward to working with our Chinese customers again in the near future, and NSP will continue to work on behalf of our members to achieve long-term markets solutions that benefit sorghum farmers.”
National Cotton Council Chairman Ron Craft, a Plains, Texas, ginner, said, “The National Cotton Council is very appreciative of Secretary Perdue and his team at USDA. This tariff mitigation program will help address a portion of the losses cotton producers are facing in the marketplace.”
Not everyone was happy with the payments. The National Corn Growers Association expressed disappointment that corn farmers impacted by trade tariﬀs and ongoing trade uncertainty would receive virtually no relief in the second round of MFP payments, again setting the payment rate for corn at just 1 cent per bushel, despite the fact that corn farmers have suﬀered an average 44 cent per bushel loss since tariﬀs were ﬁrst announced.
“Farmers of all crops have felt the impact of trade tariﬀs,” NCGA President Lynn Chrisp said. “NCGA appreciates the progress the administration has made to advance ethanol, reach a new agreement with Mexico and Canada and move forward on negotiations with Japan, but the beneﬁts of these eﬀorts will take time to materialize and farmers are hurting now.”
“One cent per bushel is woefully inadequate to even begin to cover the losses being felt by corn farmers. USDA did not take into account the reality that many of our farmers are facing,” Chrisp added.
NCGA called on USDA to add ethanol and distillers dried grains with solubles to the calculation of damages for corn, roughly $254 million. The organization also asked that farmers who suﬀered production losses from disasters be allowed to use an alternative to 2018 production for their MFP calculation, ensuring those suﬀering losses from natural disasters would not be penalized twice. These requests were repeated in subsequent conversations between NCGA and administration oﬃcials but ultimately ignored in USDA’s ﬁnal payment calculation for round two.
National Farmers Union President Roger Johnson said that while the payments are appreciated, they are not enough to mitigate the substantial losses family farmers and ranchers will experience for years to come due to President Trump’s trade wars.
“Support through MFP is welcome news to family farmers and ranchers who are suffering the brunt of the retaliation from China and other trading partners, but this trade aid falls woefully short of the sort of support required to blunt current and future damages of the administration’s trade wars,” Johnson said.
“The administration needs to understand the grave consequences of its international trade strategy for American family farmers and ranchers, and act in a meaningful way to support farm families during this time of significant financial strife.”
Larry Dreiling can be reached at 785-628-1117 or firstname.lastname@example.org.