The U.S. Department of Agriculture said it will put into action a plan to help farmers who are experiencing financial harm from countries, particularly China, that are responding to U.S. import tariffs with retaliatory tariffs of their own.
The USDA announced last month that it will authorize up to $12 billion in various relief programs for the nation’s farmers, which it said are consistent with U.S. obligations to the World Trade Organization.
First, the USDA’s Farm Service Agency (FSA) will administer the Market Facilitation Program (MFP) to provide payments to corn, cotton, dairy, hog, sorghum, soybean and wheat producers starting Sept. 4. The agency will announce further payments, if necessary.
Second, the department’s Agricultural Marketing Service (AMS) will administer a Food Purchase and Distribution Program to buy up to $1.2 billion in U.S. agricultural commodities targeted by the retaliatory tariffs. These commodities will be distributed through the USDA’s Food and Nutrition Service (FNS) to various nutrition assistance programs, such as The Emergency Food Assistance Program (TEFAP) and child nutrition programs.
Lastly, the USDA’s Foreign Agricultural Service (FAS) will use its Agricultural Trade Promotion Program (ATP) to make available $200 million to encourage the development of overseas markets for U.S. agricultural products.
“It’s important to note all of this could go away tomorrow, if China and the other nations simply correct their behavior,” said Agriculture Secretary Sonny Perdue in a statement Monday. “But in the meantime, the programs we are announcing today buys time for the president to strike long-lasting trade deals to benefit our entire economy.”
Many farmers worry that the USDA’s trade mitigation plan is a drop in the bucket to resolving the financial hardships already being experienced by the loss of U.S. export market opportunities resulting from the retaliatory tariffs overseas.
“We are still analyzing the details of this plan, but at first glance it appears USDA’s mitigation efforts will fall substantially short of making fruit, vegetable and tree nut farmers whole for the damages they have incurred, and will continue to incur, as a result of the trade war with China,” said Tom Nassif, president of the Western Growers, which represents fresh produce growers in Arizona, California, Colorado and New Mexico.
Nassif cited a University of California-Davis study which its estimates that the direct trade losses to U.S. fruit, vegetable and tree nut growers from the retaliatory tariffs will reach at least $2.6 billion and possibly more than $3.3 billion when the domestic market price impacts are factored.
“While our fresh produce is the highest quality in the world, farmers in competing countries can and will fill the vacuum created by the trade war,” he said. “Once China and other export markets find replacement suppliers, it will be extremely difficult to dislodge them.”