U.S. farmers will get $16 billion in government aid to help offset the impact of the White House’s ongoing trade fights that have negatively impacted markets.
The funding was announced on Thursday and is in addition to the $12 billion in aid the government earmarked for agriculture last year.
The largest part of the latest aid package - $14.5 billion – will consist of direct payments to producers under a so-called market facilitation program and will begin to be paid out this summer, after planting is complete. Payments will be made in up to three tranches, with the second and third tranches evaluated “as market conditions and trade opportunities dictate.”
The remainder of the money will be put toward government purchases of surplus commodities affected by trade retaliation, along with developing new export markets.
Few specific details of the program were released but the USDA said producers of corn, soybeans, wheat and a host of other crops will receive a payment based on a single county rate multiplied by a farm’s total plantings to those crops in aggregate in 2019. According to reports, the county rate will be based on the total volume of crops planted in a county that were affected by trade retaliation tariffs from China, the European Union and Turkey.
The per acre payments will not be dependent on which of those crops are planted in 2019, and therefore will not distort current planting decisions, the USDA said. Moreover, total payment-eligible plantings cannot exceed total 2018 plantings and producers will receive no payments if they do not plant this year.
Hog producers will receive a payment based on hog and pig inventory for a later-specified time frame.
The USDA said the amount of today’s aid package is in line with the estimated impacts of unjustified retaliatory tariffs on U.S. agricultural goods and other trade disruptions.
A number of ag markets have tanked in the wake of tit-for-tat tariff battles the U.S. has picked with key importers, including China.
“The plan we are announcing today ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners,” U.S. Agriculture Secretary Sonny Perdue said in a statement. “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.
Source: DePutter Publishing Ltd.
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