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Trade aid package is temporary fix

Article cover photo
The USDA announced a $16 billion trade aid package today, created to assist farmers in response to trade damage from unjustified retaliation and trade disruption. (Photo: Joseph L. Murphy/Iowa Soybean Association)

By Bethany Baratta, ISA senior writer

The U.S. Department of Agriculture (USDA) today announced another round of payments for farmers affected by market disruptions as a result of turbulent trade negotiations between the United States and China.

Under the Market Facilitation Program for 2019, $14.5 billion in direct payments will be provided to producers who plant soybeans, corn and/or 24 other crop and seed products.

Unlike the last round of payments, the 2019 program is based on a single county rate multiplied by a farm’s total plantings to those crops in aggregate in 2019. The USDA said this will not distort planting decisions. Total payment-eligible planting cannot exceed total 2018 planting, according to the USDA.

The program also has provisions for dairy and hog farmers as well as tree nut producers and fresh sweet cherry, cranberry and  grape producers.

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

Iowa Soybean Association (ISA) President Lindsay Greiner said the announced aid package is necessary, but it does little to guarantee a resolution to the trade impasse.

“The encouraging part is that USDA and the White House understand that we, as farmers, have taken the biggest hit through the whole trade war,” the Keota soybean farmer said.

Multi-step payments

According to details outlined in a release from the USDA, payments will be made in three installments, with the second and third tranches evaluated as market conditions and trade opportunities dictate. The first tranche will begin in late July/early August as soon as practical after Farm Service Agency crop reporting is completed by July 15th. If conditions warrant, the second and third tranches will be made in November and early January, the USDA said. More details are expected to be announced in the near future.

Food Purchase and Distribution Program

A $1.4 billion Food Purchase and Distribution Program was also announced today. The program will purchase surplus commodities affected by trade retaliation, including fruits, vegetables, some processed foods, beef, pork, lamb, poultry and milk. Food would then be distributed to food banks, schools, and other outlets serving low-income individuals, according to the USDA.

Agricultural Trade Promotion Program

The USDA said $100 million will be issued through the Agricultural Trade Promotion Program to assist in developing new export markets on behalf of producers.

Trade, not aid

While formally announcing the $16 billion in payments today, President Donald Trump noted that farmers have been “patriots” while his administration continues to stand up against China.

“We will ensure that our farmers get the relief they need and very, very quickly,” Trump said from the Roosevelt Room of White House.

He said China is ultimately paying for the trade aid package in the retaliatory tariffs they are facing as a result of this trade impasse.

“It all comes from China. We’re taking in, over a period of time, hundreds of billions of dollars of tariffs and charges to China and our farmers will be greatly helped,” he said. “The $16 billion in funds will help keep our cherished farms thriving and make clear that no country has veto   on America’s economic and national security.”

Still, the trade aid package isn’t enough, Greiner  said.

“Farmers have been reassured time and time again over the past year that results will be achieved, and agreements made with key trading partners,” he said. “Yet it’s been all talk and no action. It’s well past time for Congress and the Administration to put aside partisan differences, break the policy gridlock and get to work on issues that truly matter for the American people.”

Iowa Ag Secretary Mike Naig said the programs and associated payments are only a temporary solution.

“We appreciate President Trump and the USDA offering an interim solution to assist farmers affected by trade disruption,” said Naig. “However, farmers want trade, not aid. Farmers need markets to sell their products. This current situation is not sustainable. We need long-term trade agreements, and I believe we can get there, but we need China to come to the table to negotiate. It’s also imperative that Congress takes action to pass USMCA as quickly as possible to provide certainty for our farmers and businesses.”

Contact Bethany Baratta at bbaratta@iasoybeans.com.

For media inquiries, please contact Katie Johnson, ISA Public Relations Manager at kjohnson@iasoybeans.com or Aaron Putze, ISA Communications Director at aputze@iasoybeans.com

For permission to republish articles or to request high-res photos contact Aaron Putze at aputze@iasoybeans.com. Iowa Soybean Association | 1255 SW Prairie Trail Pkwy | Ankeny | IA | 50023 | US

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