Crops Livestock News

Trade relief could be less than first expected

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For many of us harvest season continues, which has seemed like a long process due to the recent wet weather. We are finally getting to see how the fruits of our labor are producing. This is the time of the year that grain checks are getting deposited, checks are being cut, and we can start to see the light at the end of the tunnel.

Sometimes that light isn’t bright enough. This year due to trade tariffs, wet weather, and droughts, ends may not meet. Plan A didn’t work out and Plan B got surpassed so quickly, it seems like we could be on Plan H by now. However, in July, there was news that some relief could be on the way. 

The USDA announced a $12 billion package to help offset losses from the tariffs would be available for farmers. Through the Market Facilitation Program, farmers were relieving a small sigh of relief. Prices have been low this fall and help was on the way. Only the crops and livestock that were directly impacted by the trade deals would be eligible in order to stay consistent with the World Trade Organization (WTO).

However, not everyone was happy with the new aid package. Many called for more action, not for more money.  For example, “National Association of Wheat Growers (NAWG) appreciates the Administration’s steps to hold China accountable for unfair trade practices but tariffs and the subsequent self-inflicted need to provide aid aren’t the answer. Farmers across the country want ‘trade, not aid’, especially wheat growers,” NAWG President and Sentinel, OK wheat farmer Jimmie Musick said.

Since the roll out, a lot has happened with America’s trade situation. Just announced on Oct. 1, the United States-Mexico-Canada Agreement (USMCA) which is a revamp of NAFTA, will have positive changes for American farmers. Due to the new trade agreements, this could change the original trade relief program. 

According to a phone interview on Tuesday, Secretary Sonny Perdue told Reuters that the U.S. Department of Agriculture’s $12 billion package to offset farmers losses from the imposition of tariffs on American exports could end up shrinking after an agreement to update NAFTA was struck. “We will be recalculating along as we go,” Perdue said, regarding the second tranche of the planned compensation, estimated at about $6 billion.  “If the tariffs do come off and the tariff impact lessens it will have some impact over the mitigation efforts because mitigation efforts were based on the fact that they would be tariff damage related,” he said.

“The President feels tariffs have been very instrumental in getting Canada to the negotiation table. Now that we have an agreement, I believe their usefulness regarding those two countries have diminished and I think we should go back to our prior relationship of no tariffs on steel and aluminum,” Perdue said.

For now, nothing has changed on payment rates for the first round of relief. The only thing in question will be the second round of relief, which was never a grantee. First reported on AGDAILY in September, a payment will be issued on 50 percent of the producer’s total production, multiplied by the MFP rate for a specific commodity. A second payment period, if warranted, will be determined by the USDA. 

 

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