"China hasn’t played by the rules:" USDA releases breakdown of latest direct-to-farmer payouts

American President Donald Trump has authorized the department of agriculture to provide up to US$16 billion in assistance program payouts to American farmers. The announcement comes after President Trump directed Agriculture Secretary Sonny Perdue to create a relief strategy to support its farmers for the long-run as the country continues a trade war with China.

“China hasn’t played by the rules for a long time and President Trump is standing up to them, sending the clear message that the United States will no longer tolerate their unfair trade practices, which include non-tariff trade barriers and the theft of intellectual property,” says Perdue in a news release.

For this year, the Market Facilitation Program breaks down as follows (all figures in U.S. dollars):

  • $14.5 billion marked for direct payments to farmers
    • Producers of alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, mustard seed, dried beans, oats, peanuts, rapeseed, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, upland cotton, and wheat will receive a payment based on a single county rate multiplied by a farm’s total plantings to those crops in aggregate in 2019;
    • Dairy producers will receive a per hundredweight payment on production history, and hog producers will receive a payment based on hog and pig inventory for a later-specified time frame;
    • Tree nut producers, fresh sweet cherry producers, cranberry producers, and fresh grape producers will receive a payment based on 2019 acres of production.

Payments will be made in up to three tranches, the USDA says, 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.

To note, the per acre payments for commodities are not dependent on which of those crops are planted in 2019, and therefore will not distort planting decisions. Meaning, the total payment-eligible plantings cannot exceed total 2018 plantings, the department says.

In addition:

  • $1.4 billion will go towards the Food Purchase and Distribution Program
    • This money, through the Agricultural Marketing Service (AMS) will go to purchase surplus commodities affected by trade retaliation such as fruits, vegetables, some processed foods, beef, pork, lamb, poultry, and milk for distribution by the Food and Nutrition Service (FNS) to food banks, schools, and other outlets serving low-income individuals.
  • $100 million to be issued through the Agricultural Trade Promotion Program
    • The funding will be administered by the Foreign Agriculture Service to assist in developing new export markets on behalf of 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. 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,” Perdue says.

Additional details regarding eligibility and payment rates will be released later this year.

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