USDA Announces Details of $12 Billion Ag Assistance
UNITED STATES - This week, U.S. Secretary of Agriculture Sonny Perdue announced the details of the U.S. Department of Agriculture’s (USDA) previously announced $12 billion ag assistance plan.
Citing “trade damage from unjustified retaliation by foreign nations,” Secretary Perdue and the Trump administration detailed the specifics of “a short-term relief strategy to protect agricultural producers while the Administration works on free, fair, and reciprocal trade deals to open more markets in the long run to help American farmers compete globally.”
He detailed the care with which the governmental organization crafted the strategy.
“Early on, the President instructed me, as Secretary of Agriculture, to make sure our farmers did not bear the brunt of unfair retaliatory tariffs,” noted Secretary Perdue, in a press release. “After careful analysis by our team at USDA, we have formulated our strategy to mitigate the trade damages sustained by our farmers. Our farmers work hard, and are the most productive in the world, and we aim to protect them.”
The Secretary outlined three programs designed to meet the needs of ag producers in disrupted markets. The three programs were outlined as follows:
- USDA’s Farm Service Agency (FSA) will administer the Market Facilitation Program (MFP) to provide payments to corn, cotton, dairy, hog, sorghum, soybean, and wheat producers starting September 4, 2018
- USDA’s Agricultural Marketing Service (AMS) will administer a Food Purchase and Distribution Program to purchase up to $1.2 billion in commodities unfairly targeted by unjustified retaliation. USDA’s Food and Nutrition Service (FNS) will distribute these commodities through nutrition assistance programs such as The Emergency Food Assistance Program (TEFAP) and child nutrition programs
- Through the Foreign Agricultural Service’s (FAS) Agricultural Trade Promotion Program (ATP), $200 million will be made available to develop foreign markets for U.S. agricultural products. The program will help U.S. agricultural exporters identify and access new markets and help mitigate the adverse effects of other countries’ restrictions
“We are still analyzing the details of this plan, but at first glance it appears USDA’s mitigation efforts will fall substantially short of making fruit, vegetable, and tree nut farmers whole for the damages they have incurred, and will continue to incur, as a result of the trade war with China,” said Western Growers President & CEO Tom Nassif, in a statement following the USDA’s announcement. “Even so, our fresh produce growers never expected the mitigation plan to fully make up for lost trade revenues and market shares, which is why we submitted a series of solutions the administration could adopt to ease the burdens of its trade policies on the industry. While we are pleased with their creative approach to targeting aid to exporters, we are disappointed that many of our other ideas are not reflected in USDA’s mitigation plan.”
As part of the USDA AMS’s Food Purchase and Distribution program, a number of produce categories were earmarked for up to tens of millions in commodity buyback, including $93,400,000 in apples, $48,200,000 in grapes, and $55,600,000 in fresh oranges. But despite this, Western Growers notes, the cost of trade losses due to a slew of retaliatory tariffs leveed by the U.S. and China far exceeds the allotted funds.
“According to a study released by U.C. Davis economists, the direct trade losses for U.S. fruit, vegetable, and tree nuts growers conservatively top $2.6 billion. When the price impacts on the domestic market are considered, the magnitude of damage exceeds $3.3 billion. These figures only represent the immediate consequences; the longer term effects will be much more catastrophic, and potentially permanent. While our fresh produce is the highest quality in the world, farmers in competing countries can and will fill the vacuum created by the trade war. Once China and other export markets find replacement suppliers, it will be extremely difficult to dislodge them,” continued Nassif. “Time is of the essence, and only one outcome will preserve our family farms: a rapid and successful conclusion of our trade conflicts and the restoration of commerce between American farmers and buyers across the globe.”
To read more about the specifics of Secretary Perdue’s plan, read the USDA’s announcement in its entirety here.
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