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US$16 billion for US farmers impacted by China/US trade war

Grain Central, May 24, 2019

THE United States Secretary of Agriculture, Sonny Perdue, has announced that the US Department of Agriculture (USDA) will take several actions to assist farmers in response to trade damage from the US/China trade dispute.

President Donald Trump has authorised the USDA to provide up to US$16 billion in programs, which is in line with the estimated impacts of retaliatory tariffs on US agricultural goods and other trade disruptions.

“China hasn’t played by the rules for a long time and President Trump is standing up to them, sending the clear message that the United States will no longer tolerate their unfair trade practices, which include non-tariff trade barriers and the theft of intellectual property,” Mr Perdue said.

“The plan we are announcing today ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners.

“Our team at USDA reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers. Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them.”

American farmers have borne the brunt of retaliatory tariffs from China which have curtailed US exports to China.

They have impacted a host of US commodities, including crops like soybeans, corn, wheat, cotton, rice, and sorghum; livestock products like milk and pork; and many fruits, nuts, and other crops.

The high tariffs have disrupted normal marketing patterns, raising costs by forcing commodities to find new markets.

Additionally, American goods shipped to China have been slowed from reaching market by unusually strict or cumbersome entry procedures, which affect the quality and marketability of perishable crops.

Market Facilitation Program (MFP) for 2019, authorised under the Commodity Credit Corporation (CCC) Charter Act and administered by the Farm Service Agency (FSA), will provide US$14.5 billion in direct payments to producers.

These payments will help farmers to absorb some of the additional costs of managing disrupted markets, to deal with surplus commodities, and to expand and develop new markets at home and abroad.

Payments will be made in up to three tranches, with the second and third tranches evaluated as market conditions and trade opportunities dictate.

The first tranche will begin in late July/early August as soon as practical after Farm Service Agency crop reporting is completed by July 15.

If conditions warrant, the second and third tranches will be made in November and early January.

Additionally, CCC Charter Act authority will be used to implement a US$1.4 billion Food Purchase and Distribution Program (FPDP) through the Agricultural Marketing Service (AMS) to purchase surplus commodities affected by trade retaliation such as fruits, vegetables, some processed foods, beef, pork, lamb, poultry, and milk for distribution by the Food and Nutrition Service (FNS) to food banks, schools, and other outlets serving low-income individuals.

Finally, the CCC will use its Charter Act authority for US$100 million to be issued through the Agricultural Trade Promotion Program (ATP) administered by the Foreign Agriculture Service (FAS) to assist in developing new export markets on behalf of producers.

Source: USDA

 

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