$12 Billion Relief Package Unveiled
Published: Friday, August 3, 2018
Secretary of Agriculture Sonny Perdue last Tuesday announced a $12 billion relief package to U.S. farmers and ranchers who have born a disproportionate share of the financial burden brought on by disruptions surrounding trade.
"The Trump administration will be taking several actions in response to the trade damage caused by the illegal, retaliatory tariffs that have been imposed on the United States in recent months," Perdue said. "It is a short-term solution to give President Trump time to work on a better trade deal for ag as well as all sectors of the American economy. The actions are a firm statement that countries cannot bully our agricultural producers to force a cave in."
The program will encompass three approaches which are all authorized under the Commodity Credit Corp. (CCC) Section V, and do not require congressional approval.
The three programs will include direct payments through the Market Facilitation Program, surplus purchases for distribution to food banks through the Food Purchase and Distribution Program and finally a Trade Promotion Program to develop new markets both globally and domestically for U.S. agricultural products.
Perdue emphasized that all three programs are short-term in nature and expects them to be authorized for approximately one year.
The current tariffs are estimated to impose $11 billion in direct farm losses, placing the $12 billion program is in line with projected disruption.
The Market Facilitation Program will provide direct payments based on harvest results to soybean, sorghum, cotton, wheat, dairy and hog producers. The funds will be distributed proportionately with losses to each sector. Distribution formulas and program details are being calculated using current conditions and may be adjusted as tariffs are lifted or added during trade negotiations.
Details are expected to roll out through local Farm Service Agency offices with a Labor Day 2018 deadline. Funds are designated for 2018 crop and individuals will need to harvest crops to obtain any loss supplement payments.
The Food Purchase and Distribution Program will focus on purchasing surpluses of fruits, nuts, rice, legumes, beef, pork and dairy products and distributing products through food banks.
The programs were welcomed by the American Farm Bureau Federation and a confirmation that the agriculture voice has been heard by the Trump administration. AFBF 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. We are grateful for the administration's recognition that farmers and ranchers need positive news now and this will buy us some time."
Indiana Farm Bureau President Randy Kron applauded the announcement for temporary relief to Hoosier farmers.
"The importance of trade and open markets is essential to supporting our farmers' bottom-line. Farm income has dropped about 50 percent over the last five years," Kron said. "Recent drops in corn and soybean prices compound the real dollars lost to Indiana farmers, their families, rural communities and our state's economy. The administration's announcement of the assistance package is confirmation that our concerns have been heard but there is still work to do. We will continue to express the importance of reliable trade agreements to Indiana's representatives in Congress."
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