USDA Monday announced details of a three-pronged plan to assist U.S. farmers and ranchers in response to trade damages from retaliatory tariffs by China and other countries.
The plan includes nearly $4.7 billion in direct payments to producers harmed, more than $1.2 billion in government food purchases and $200 million to develop foreign markets.
“For months President Trump has been standing up to China and other nations sending a clear message that the United States will no longer tolerate the unfair trade practices, which include non-tariff barriers and forced transfer of intellectual property,” Sonny Perdue, USDA secretary, said in a phone conference with the media.
“President Trump has said enough is enough,” he said.
But he also did not want agricultural producers bearing the brunt of the retaliatory tariffs and instructed Perdue to craft a short-term relief strategy, Perdue said.
Economic pressure already exists in farm country, where net farm income has dropped more than 50 percent in the last five years. Producers simply cannot pay their bills with patriotism, he said.
The $6.1 billion in farm assistance announced Monday is about half the $12 billion USDA expects in lost exports. There may be another round of aid depending on how the trade disputes evolve, but the goal is to begin taking applications for assistance Sept. 4.
Direct payments to producers will be capped at $125,000 per person, and payments could go out as early as mid-September, Bill Northey, USDA undersecretary for farm production and conservation, said.
Direct payments will be provided to cotton, corn, dairy, pork, soybeans, sorghum and wheat producers. Farmers need to establish eligibility with the Farm Service Agency and will be paid a certain rate for each commodity for 50 percent of their actual production, he said.
“We want to make it simple for producers but also effective,” he said.
Total payments in this round of assistance are expected to range from about $3.6 billion for soybean producers to $96 million for corn producers.
Wheat producers are expected to get $119.2 million.
USDA’s Agricultural Marketing Service will administer the food purchases and distribution leg of the assistance. Purchases will be spread out over several months in four phases and many will be different than what USDA normally purchases, reflecting the specific products that are being hit with the tariffs, Greg Ibach, USDA undersecretary for marketing and regulatory programs, said.
The agency will guard against displacing the Section 32 purchases it already makes for nutrition-assistance programs, he said.
More than 30 different products will be purchased, including fruits, nuts, livestock products, legumes, potatoes, rice and sweet corn. Top expected purchases are about $559 million for pork, $111.5 million for sweet cherries, $93.4 million for apple and $85 million each for dairy and pistachios.
USDA also expects purchases of $2.1 million for hazelnuts, $44.5 million for potatoes and $63.3 million for almonds.
The Foreign Agricultural Service will administer the trade-promotion assistance. It will be a cost-share program and more flexible and more streamlined than existing market-development programs. Assistance will likely begin being distributed in early 2019, Ted McKinney, USDA undersecretary for trade and foreign agricultural affairs, said.