While President Donald Trump works toward what he considers free, fair, and reciprocal trade deals, agricultural producers of all kinds have been hit hard. American farmers are expected to lose $11 billion this year due to retaliatory tariffs that have been placed on agricultural goods since these trade discussions began.

Last week, U.S. Secretary of Agriculture Sonny Perdue announced that the USDA will authorize up to $12 billion in financial aid to assist farmers. In a USDA press release, Perdue said this is a “short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy.“

The Market Facilitation Program was authorized under the Commodity Credit Corporation Charter Act and will be administered by the Farm Service Agency (FSA). It will offer incremental payments to producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs

USDA will also implement a Food Purchase and Distribution Program through the Agricultural Marketing Service (AMS) to purchase the unanticipated surplus of certain commodities. Those products will be distributed to food banks and through other nutrition programs.

There also will be a Trade Promotion Program administered by the Foreign Agriculture Service (FAS) in conjunction with the private sector to help develop new export markets for farm products.

The National Milk Producers Federation released a statement welcoming the tariff mitigation program. The organization estimates that these additional tariffs imposed by Mexico, China, and other key trading partners will cost U.S. dairy farmers $1.8 billion through the remainder of the year based on the decline in milk futures prices since the retaliatory tariffs were initiated.

As one would expect, there are critics of the plan as well. In The Wall Street Journal, an article indicated that many lawmakers expressed concerns about the plan, citing that farmers need certainty in trade, not a government bailout. They also said that aid might have to be extended to other sectors if the trade war continues.

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(c) Hoard's Dairyman Intel 2018
July 30, 2018
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