USDA tariff relief could aid more than 600,000 American farmers

10 September 2018 6:36pm

29 August 2018. By Kat Lucero and Maxwell Fillion.

More than 600,000 American farmers could benefit from the federal government’s tariff relief program, a spokesperson for the US Department of Agriculture told MLex.

The USDA said it will begin Sept. 4 issuing the first set of payments to farmers whose production have taken a financial hit from the “unfair retaliatory tariffs” imposed by foreign governments in the wake of President Donald Trump’s own set of tariffs, according to an Aug. 27 announcement.

The relief, which could total up to $12 billion, is part of the Trump administration’s plan to help farmers while his administration negotiates broader trade deals. The president first announced the plan in July, authorizing the USDA to develop a short-term financial aid program for farmers affected by the recent trade wars.

The USDA may issue another set of payments based on the second half of the producer’s total output.

“USDA will review the trade landscape in early December 2018 and determine if an additional payment is warranted and if so what the appropriate payment rate should be,” USDA press secretary Meghan Rodgers said in an e-mailed response to MLex’s inquiry for more details about the department’s latest announcement.

Cotton, corn, dairy, pork, soybeans, sorghum and wheat producers will be the payment recipients under the Market Facilitation Program, or MFP, according to the USDA’s Aug. 27 announcement.

Payments will be capped at a combined $125,000 for dairy and hogs and another combined $125,000 for the other crops. Calculations for the initial payments will be based on half of the producer’s total production.

Eligible applicants must have completed 100 percent of the harvest and report their total 2018 production, as well as have an average adjusted gross income of $900,000 or less from the past three consecutive tax years of 2014, 2015 and 2016.

Applicants must also have an ownership interest in the commodity, not necessarily the land.

“For example, a farmer must have an ownership interest in the sorghum crop and not simply be a landlord who is paid cash rent,” Rodgers said. “In the pork industry, there are contract growers who do not own the hogs. They house and feed them for a price. They would not be eligible to participate in the program.”

The USDA will also purchase up to $1.2 billion in goods from producers and distribute them through nutrition assistance programs across the country. Another $200 million would also be set aside to help agricultural exporters identify markets and help mitigate the adverse effects of other countries’ restrictions.

A coalition of farmers, however, doesn’t believe the federal aid will help solve the problem.

“Farmers don’t want to make decisions based on a government program,” said Casey Guernsey, a spokesperson for the Americans for Farmers and Families, or AFF.

“It messes up both the markets and decisions made on the farm,” Guernsey told MLex.

For example, Guernsey’s family, who's been raising Black Angus cattle for more than 100 years in Missouri, was forced to sell a cattle trailer full of breeding stock this month because of the recent trade conflicts.

Trade deals, such as the North American Free Trade Agreement, are more favorable, Guernsey said. Trump, however, has so far struck a deal with Mexico on Aug. 27 — the same day as the USDA's tariff relief announcement — as part of the Nafta negotiations, which Guernsey said is “a step in the right direction.”

"It opens the door for Canada to enter into a conversation," Guernsey said.