- The U.S. Department of Agriculture said Monday that initial aid in its emergency plan to help farmers impacted by retaliatory tariffs will consist of about $4.7 billion in payments.
- The federal government also said it plans to purchase up to $1.2 billion in certain “commodities unfairly targeted by unjustified retaliation.”
- A third part of the aid will consist of up to $200 million in spending to help develop foreign markets for agricultural products.
With some U.S. farm products getting slammed by retaliatory tariffs, the Trump administration is prepared to start its emergency plan for agriculture right after Labor Day in a “three-pronged approach” that will initially include about $6 billion in aid.
The U.S. Department of Agriculture said in its announcement that it is authorized to provide up to $12 billion in aid to the agricultural industry. On Monday, though, the department said initial aid will consist of about $4.7 billion in payments to agricultural producers of seven commodities, as well as federal government purchases of up to $1.2 billion in certain “commodities unfairly targeted by unjustified retaliation.”
A third part of the aid will consist of up to $200 million in spending to help develop foreign markets for agricultural products.
Soybean farmers stand to get the biggest share of nearly $4.7 billion in payments in the Market Facilitation Program, which also will provide payments to producers of corn, cotton, dairy, hog, grain sorghum and wheat starting Sept. 4. The USDA first unveiled the trade mitigation package on July 24 but at the time provided few details.
“We always knew that agriculture would be the tip of the spear if other nations decided to retaliate,” said USDA Secretary Sonny Perdue in a conference call with reporters Monday. “We also knew the economic pressure was already there for farmers, even without these unfair trade tariffs.”
Soybeans have been hard hit by Chinese tariffs and stand to get up to $3.6 billion in assistance under the Market Facilitation Program. Another $290 million will go to pork, about $277 million for cotton and $156 million for grain sorghum, as well as $127 million for dairy, $119 million for wheat and $96 million for corn.
According to Perdue, farmer payments the government will make under its relief plan “will be bifurcated so that we can monitor and factor in events,” such as trade breakthroughs like the U.S. announced Monday with Mexico. “An announcement about further payments will be made in the coming months, if warranted,” he added.
Some of the aid from the Trump plan is coming through the authority of the Commodity Credit Corp., a federal agency dating back to the Great Depression. The Market Facilitation Program, which was established under the CCC, will determine the payment rate to farmers of a commodity covered by looking at “the severity of the trade disruption and the period of adjustment to new trade patterns, based on each producer’s actual production,” the USDA said.
The market aid payments will be administered by the USDA’s Farm Service Agency and are limited to farmers having an average adjusted gross income of less than $900,000 for the tax years 2014 through 2016. Payments also will be capped per person or legal enterprise at a combined $125,000.