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USDA to provide $16 billion in 'trade aid' to farmers in 2019

By: Sean Ellis
Published in Blog on  May 24, 2019

USDA will provide up to $16 billion this year to help U.S. farmers and ranchers hurt by unjustified retaliatory tariffs that China and other trading partners have placed on American farm products.

By Sean Ellis

Idaho Farm Bureau Federation

POCATELLO – U.S. Secretary of Agriculture Sonny Perdue announced May 23 that USDA will provide up to $16 billion this year to help U.S. farmers and ranchers hurt by unjustified retaliatory tariffs that China and other trading partners have placed on American farm products.

In a USDA news release, the department said President Donald Trump directed Perdue to “craft a relief strategy to help U.S. agricultural producers while the administration continues to work on free, fair and reciprocal trade deals to open more markets in the long run to help American farmers compete globally.”  

The $16 billion total, the news release said, “is in line with the estimated impacts of unjustified retaliatory tariffs on U.S. agricultural goods and other trade disruptions. These programs will assist agricultural producers while President Trump works to address long-standing market access barriers.”

USDA last year provided $12 billion in so-called “trade aid” to U.S. ag producers impacted by tariffs and trade disruptions.

According to USDA, the 2019 trade aid package will provide $14.5 billion in direct payments to crop and livestock producers.

The list of eligible crops includes alfalfa hay, barley, wheat, dry peas, canola, corn lentils, oats, dried beans and chickpeas, all of which are grown in Idaho.

The payments will also go to dairy producers and dairy is Idaho’s No. 1 farm commodity in terms of total farm-gate receipts.

Payments will also be made to producers of fresh sweet cherries and grapes, both of which are grown in Idaho.

“These payments will help farmers absorb some of the additional costs of managing disrupted markets, to deal with surplus commodities and to expand and develop new markets at home and abroad,” the USDA news release states.

The payments will be made in up to three stages, with the first phase of payments scheduled to begin in late July or early August. If conditions warrant, a second and third stage of payments will be made in November and early January.

The 2019 trade aid package includes $1.4 billion that will be used by the federal Agricultural Marketing Service to purchase surplus commodities affected by trade, including vegetables, fruits, beef, lamb, milk and some processed foods. This food will be distributed to food banks, schools and other outlets serving low-income people.

USDA will also provide $100 million through the Agricultural Trade Promotion Program to assist in developing new export markets on behalf of ag producers.

According to the news release, more details regarding eligibility and payment rates will be released later.

After meeting with Trump and Perdue at the White House May 23, American Farm Bureau Federation President Zippy Duvall said the administration’s ag assistance program “is welcome relief to an economic sector that has been battered by foreign competitors and retaliatory tariffs. We thank the president for living up to his commitment to stand by our farmers and ranchers.”

Farmers and ranchers would rather earn their income from the marketplace but they have been suffering during the agricultural downturn and trade war, Duvall added.

“This aid package will help us weather the storm as the administration works to correct unfair trade practices that have hurt the U.S. economy for too long,” Duvall said.

In the USDA news release, Perdue said Trump has great affection for American farmers and ranchers “and he knows they are bearing the brunt of these trade disputes.”

“The plan we are announcing today ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners,” Perdue said. “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.”

Leaders of Idaho’s farming industry said their members appreciate the assistance and acknowledgement by the administration that the U.S. agricultural industry is being negatively impacted by retaliatory tariffs.

But they also said they would rather not have to be provided the assistance.

“We’d rather have trade than aid,” said Scott Brown, a wheat and barley grower from Soda Springs. “A level playing field is all us American farmers want.”

Brown, who serves on the Idaho Barley Commission, said farmers understand and support the administration’s goal of ensuring China and other trading partners are truly engaging in free and fair trade but they also wish they weren’t bearing the brunt of the retaliation.

“Farmers support the principle and idea of what is taking place,” he said. “But we also wish there could have been successful negotiations from day one. Farmers are hurting; prices are down. We understand what’s happening and that things take time but sometimes our bankers don’t understand that.”

Idaho Dairymen’s Association Executive Director Rick Naerebout said that Idaho’s dairy farmers “would much rather have free trade than a payment from the government.”

U.S. dairy producers received a total of 12 cents per hundred pounds of production in trade aid last year but Naerebout said the retaliatory tariffs are costing U.S. dairy operations about $1 per hundred pounds of production.

“It was offensive that they thought (12 cents) was an acceptable amount to reimburse dairy farmers who have been stuck in a trade war that they want nothing to do with,” he said. “We’re hopeful that this year’s amount will be meaningful but at the end of the day, it probably won’t be.”

U.S. wheat producers received 14 cents per bushel in trade aid in 2018 and corn producers receive 1 cent per bushel.

An AFBF analysis of last year’s USDA trade aid package estimated that Idaho dairy, wheat and corn producers received a total of $30 million in assistance.

AFBF estimated Idaho dairy producers received a total of $17 million, the state’s wheat growers received $12.6 million and Idaho corn farmers received a total of $320,000.

 

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