Another Round of Tariff Relief

May 24, 2019  | 3 min  | Ep4440

Stalled trade talks between the United States and China signaled a deal may be farther away than rural America had hoped. The impasse triggered a second round of Market Facilitation Payments.

Farmers continue to face lower prices caused in part by the dramatic drop in sales to China. 

The payments will come from Commodity Credit Corporation coffers. According to Secretary Perdue, the CCC account will be refreshed with money from the U.S. Treasury that is, in turn, being filled by tariff payments from U.S. importers.

Peter Tubbs has more. Producer Contact:

The USDA announced the broad strokes of the 2019 round of the Market Facilitation Program Thursday.
Tariff relief will total $14.5 Billion dollars using a pricing model that is changed compared to the 2018 version. Rather than payment based on the production volume of each operation, checks will be based on the tariff impact on the commodities produced in each county, and each farms acreage as a percent of the whole. 
Bill Northy, Under Secretary for Farm Production and Conservation: “It’s going to be very understandable for a producer to be able to understand what that payment rate is in that county, and they won’t have to look at it from crop to crop across the county or different rates from different commodities.” 
President Donald Trump: “We will ensure that our farmers get the relief they need, and very, very quickly. It's a good time to be a farmer. We're going to make sure of that. We'll be taking in over a period of time hundreds of billions of dollars in tariffs and charges to China and our farmers will be greatly helped. We want to get them back to the point where they would have had if they had a good year.”
Payments will be made in three segments, with the first expected in late July or early August. Acres that take Prevent Plant payments will not be eligible for MFP payments. Farmers must plant a crop to receive a payout.
Dairy producers will receive aid based on their production volume, and support for hog producers will be calculated by the size of their herd. 
The USDA also announced $1.4 Billion in surplus commodity purchases to be distributed to school lunch programs and groups that address food scarcity.  Additionally, $100 million is being allotted for the development of new export markets.
 The American Farm Bureau Federation says the payments will help. The Iowa Farm Bureau agreed and added their members prefer trade over aid. 
Michigan Senator Debbie Stabinow, the ranking Democrat on the Senate Agriculture Committee, railed against the current plan:
Graphic: “Unfortunately, this complex scheme leaves them with more questions than answers. I have a number of concerns about whether this plan is fair and equitable to all farmers. Government checks are no replacement for lost markets, and this temporary support will only go so far.”
Secretary of Agriculture Sonny Perdue: “We would love for China to come to the table at any time. We had made great progress in that regard. When they decided to reneg on those commitments and relitigate tjhose commitments that we had, it looked like China was operating in the same way they had operated over a number of years. It remains to be seen, but it’s really in China’s court.” 
For Market to Market, I’m Peter Tubbs.
Grinnell Mutual Insurance