The U.S. Agriculture Secretary and other federal agriculture officials are outlining the details of an updated $16 billion package aimed at compensating farmers for the impacts of the trade war.
The Market Facilitation Program, Food Purchase and Distribution Program and Agricultural Trade Promotion Program is the three-part package intended to protect agricultural producers from the impact of retaliatory tariffs.
This is the second year of the support package. The focus is the MFP, or Market Facilitation Program, which makes compensatory payments for a number of affected crops. Agriculture Secretary Sonny Perdue said it’s been updated and revised. “I’m proud of our American farmers and ranchers as the most productive and competitive in the world and this level of success however has left them vulnerable. President Trump instructed me when the China talks broke down to prepare a strategy to help protect our farmers and ranchers from this unfair retaliatory tariff. And our team at USDA took in a lot of input from last year’s program to most effectively redesign this program to support farmers. We also took into account the unprecedented weather this spring and summer across the country and other operational difficulties amid already depressed markets. So we’ve instituted a number of flexibilities to account for these additional hardships.”
USDA Chief Economist Dr. Rob Johannson says payment rates are based on estimates of trade damage. “The trade damage is calculated as that difference between the tariff estimated level of trade and what the baseline would be without those tariffs. One difference with this year’s program is we looked at trade over the past ten years and determined what was the maximum amount of trade that the retaliating countries could have imported from us as a result we do get larger amounts of damages. Other differences: we know that that the retaliatory tariffs from Canada and Mexico have been removed and so we do not consider those in this trade model. The three programs under MFP will be the non-specialty crop and then we also have a national level rate for hogs and dairy similar to last year’s program.”
USDA Under Secretary for Farm Production and Conservation Bill Northey notes that there will be payment limitations in each category, although payments are higher than last year. “What we need from a producer is the number of acres that producer planted to qualifying crops in that county. In many cases we already have that. For the most part this should be a fairly simple process. We want signup to be easy for producers, straightforward. Dairy producers, pork producers as well. Pork producers will be based on an inventory. Dairy producers will be based on a hundredweight payment.”
Sign-up begins July 29th and ends December 6th. Payments are expected to start in mid-to-late August.
