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USDA Assists Farmers Harmed by Tariffs

A news release from USDA on Tuesday stated that, “U.S. Secretary of Agriculture Sonny Perdue today announced that the [USDA] will take several actions to assist farmers in response to trade damage from unjustified retaliation. President Trump directed Secretary Perdue to craft 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. Specifically, USDA will authorize up to $12 billion in programs, which is in line with the estimated $11 billion impact of the unjustified retaliatory tariffs on U.S. agricultural goods. These programs will assist agricultural producers to meet the costs of disrupted markets.”

“Trade in the Balance, The Importance of International Markets to U.S. Agriculture.” CoBank (July 2018).

Tuesday’s update explained:

“USDA will use the following programs to assist farmers:

  • The Market Facilitation Program, authorized under The Commodity Credit Corporation (CCC) Charter Act and administered by Farm Service Agency (FSA), will provide payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs. This support will help farmers manage disrupted markets, deal with surplus commodities, and expand and develop new markets at home and abroad.
  • Additionally, USDA will use CCC Charter Act and other authorities to implement a Food Purchase and Distribution Program through the Agricultural Marketing Service to purchase unexpected surplus of affected commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs.
  • Finally, the CCC will use its Charter Act authority for a Trade Promotion Program administered by the Foreign Agriculture Service (FAS) in conjunction with the private sector to assist in developing new export markets for our farm products.

Bloomberg writers Alan Bjerga and Justin Sink reported Tuesday that, “Farm state Republicans in Congress, who’ve been warning President Donald Trump that some of his most loyal supporters were being hurt by his trade policies, criticized the plan as welfare for farmers who would be better served by an end to the trade war, which is already dragging down prices for soybeans and other crops.

‘There will never be enough money to solve the problem’ created by Chinese duties on U.S. farm goods, said Senator Jerry Moran of Kansas, a Republican. ‘Farmers and ranchers recognize that the Trump administration cares about them. They are worried about tariffs.’

“The plan for providing price supports, which don’t need congressional approval, was rolled just two days before Trump is set to travel to Iowa,” the Bloomberg article said.

Wall Street Journal writer Vivian Salama reported Tuesday that, “A number of lawmakers, including many from Mr. Trump’s Republican Party, dismissed the plan as a bailout and called for long-term solutions that benefit American farmers and honor longstanding trade relationships.”

The Journal article pointed out that, “‘Tariffs are the greatest!‘ Mr. Trump declared early Tuesday. ‘Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs,’ the president tweeted.”

However, the Post article noted that, House Ag Committee Chairman Mike Conaway (R., Tex.) backed the executive branch action:

‘Our president stood up to a bully, now he’s standing up for rural America,’ said [Conaway], referring to Trump’s trade struggle with China. ‘This is the right fight to have but in the meantime our producers have got to … live, while this fight’s going on.’

Paletta and Dewey added, “This week could prove a crucial one for Trump’s trade strategy. He is scheduled to meet Wednesday with European Commission President Jean-Claude Juncker, who has been very critical of the way Trump is trying to use tariffs to extract concessions from a range of countries.”

In addition, DTN Ag Policy Editor Chris Clayton reported Tuesday that, “The aid package comes as Congress is working to finish a new farm bill, and lawmakers from both parties have been critical of the idea of the Trump administration providing a separate aid package. Republican senators told Trump earlier this spring that farmers want trade, not aid. That’s become a mantra of sorts.”

Meanwhile, Associated Press writers Ken Thomas and Paul Wiseman reported Tuesday that, “[T]he plan magnified objections among many Republicans that the tariffs amount to taxes on American consumers. House Speaker Paul Ryan of Wisconsin said lawmakers are making the case to Trump that tariffs are ‘not the way to go.’

“Sen. Bob Corker, R-Tenn., said the administration ‘finally seems to understand that the Trump-Pence tariffs are hurting the American people. These tariffs are a massive tax increase on American consumers and businesses, and instead of offering welfare to farmers to solve a problem they themselves created, the administration should reverse course and end this incoherent policy.'”

And Politico writers Adam Behsudi, Catherine Boudreau, Helena Bottemiller Evich and Megan Cassella reported Tuesday that, “Senate Agriculture Chairman Pat Roberts told Politico recently that tariff retaliation could have long-term effects on access to foreign markets.

“‘I think the question in farm country that is equal to what’s happening now is: What is our future down the road? How do we put these trade agreements back together? Once you lose a market, you lose it,’ he said. ‘We are trying to make the point that we don’t want aid, we want trade.'”

Keith Good

Keith Good is the social media manager for the farmdoc project at the University of Illinois. He is well known in agricultural circles for the daily FarmPolicy.com News Summary.

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