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USDA announces $12 billion in programs for farmers affected by trade war

WASHINGTON -- The U.S. Department of Agriculture on Tuesday announced it will enact $12 billion in programs to assist farmers affected by retaliatory tariffs.

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Agriculture Secretary Sonny Perdue, center, addresses the media during a March 9, 2018, event in North Dakota. Also in attendance were, from left, North Dakota Gov. Doug Burgum, U.S. Rep. Kevin Cramer, R-N.D., and U.S. Sen. John Hoeven, R-N.D., and Heidi Heitkamp, D-N.D. (Jenny Schlecht/Agweek)
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WASHINGTON - The U.S. Department of Agriculture on Tuesday announced it will enact $12 billion in programs to assist farmers affected by retaliatory tariffs.

Agriculture Secretary Sonny Perdue; Greg Ibach, USDA undersecretary for marketing and regulatory programs; Rob Johannson, USDA chief economist; Jason Hafemeister, USDA trade counsel to the secretary; and Brad Karmen, USDA assistant deputy administrator for farm programs announced three programs will be enacted to assist farmers and ranchers.

Meanwhile, U.S. Sen. Heidi Heitkamp, D-N.D., also announced on Tuesday that she is sponsoring a bill to make Trade Adjustment Assistance available to farmers affected by retaliatory tariffs.

In the USDA action, Perdue announced three programs: the market facilitation program, which will provide payments to producers dealing with disruptive markets; the food purchase and distribution program, which will purchase surplus goods and distribute them to food programs and food banks; and the trade promotion program, which will work with the private sector to develop new trade markets. All three programs are already authorized under the Commodity Credit Corporation.

"This is a short-term solution that will give President Trump and his administration time to work on long-term trade deals," Perdue said.

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The market facilitation program will focus on payments to producers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs - all U.S. agricultural products targeted by retaliatory tariffs. The food purchase and distribution program will look to buy fruits, nuts, rice, legumes, beef, pork, and various segments of dairy.

"This program is intended to offset the trade damage that we've seen facing our farmers in a number of commodities," Johannson said.

"Nearly all sectors of U.S. agriculture are being affected by these retaliatory actions," Hafemeister said.

Hafemeister indicated the programs are a signal to countries embroiled in trade wars that the U.S. will support farmers and ranchers.

"We're hoping that other countries will see that we're serious now about trade negotiations," he said.

Ibach said more details will be rolled out around Labor Day. Karmen explained that the producer payments will entail multiplying actual production this season for the given crops by a not-yet-determined rate.

Another direction for trade assistance

Heitkamp's relief bill for farmers, also announced on Tuesday, would expand Trade Adjustment Assistance to help farmers and industries affected by not having access to the export market. TAA has been in existence since 1962 but has up to this point only assisted people in industries hurt by imports into the country, Heitkamp explained.

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TAA right now is authorized at $90 million per year. Heitkamp acknowledges that would not go very far in the current situation. She would like to see money from tariffs imposed by the Trump Administration be moved to TAA in the future to go toward helping producers affected by retaliatory tariffs.

The program proposed by Heitkamp's bill would include a two-step process: farmers would have to qualify as a class of producers and individual farmers would have to meet specific program requirements to demonstrate that trade actions have negatively caused the commodity to decline, Heitkamp's office said.

Heitkamp's bill has a companion in the House, sponsored by Rep. Lisa Blunt Rochester, D-Del.

Heitkamp expressed mixed reactions to USDA's $12 billion aid package announcement. While she said anything to "bridge" the short-term impact is helpful, she worries about the cost of the program.

"This is $12 billion that we are borrowing. We don't have $12 billion sitting around," she said. "We already have a huge deficit problem in this country."

Heitkamp said the long-term impacts of the trade war already are being felt. Some trade partners are "not returning our phone calls," she said. "We may have lost those markets forever."

More meaningful assistance to farmers would include rolling back tariffs, rebuilding markets and "recalibrate" efforts to confront trade problems, she said, adding that farmers and ranchers would rather have strong trade than government programs.

"They want to trade. They want to sell their products," she said. "They don't want to just get a check from the government."

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North Dakota’s other U.S. senator, Republican John Hoeven, expressed similar sentiments regarding the $12 billion announcement.

“The goal of the administration we believe is to gain greater access to markets on a fair basis for our farmers and ranchers. But because agriculture has a positive balance of trade, our producers are heavily impacted by retaliatory tariffs,” Hoeven said in a statement. “That is why we are willing to work with USDA on a short term program to provide our producers with temporary relief as the administration continues its trade negotiations. At the same time however, we continue to press the administration to get better, more fair trade deals in place as soon as possible so that farmers can continue to do what they do best - provide our country and the world with the highest-quality, lowest cost food supply in the world.”

Related Topics: HEIDI HEITKAMP
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