More Farm Aid Announced in Trade War

The USDA announced it will provide another $16 billion in programs supporting farmers during the extended trade war with China.

Secretary of Agriculture Sonny Perdue says President Donald Trump directed him to provide more money to farmers while the Administration works on a trade deal.

He says the action helps farmers from what they call unjustified retaliation and trade disruption, making it so they do not bear the brunt of trade disputes, "While farmers themselves would tell you they'd rather have trade than aid, without the trade that has been possible, then they're going to need some support from a profitability standpoint. We honestly and sincerely know and believe that it is a food security issue which leads to a national security issue."

The 2019 Market Facilitation Program will work much like the 2018 version, it's authorized under the Commodity Credit Corporation Charter Act to be administered by the Farm Service Agency. It provides $14.5 billion in direct payments to producers.

Corn and soybean farmers particularly will get a payment based on a single county rate, multiplied by a farm's total plantings to those crops. The per acre payments are not dependent on which crops were planted in 2019 and total payment-eligible plantings cannot exceed 2018 plantings.This is a way to make sure planting decisions will not be distorted.

Payments will be made up in three portions, with the first to begin in late July and early August. If conditions warrant, the second and third portions will be made in November and January.

Dairy and hog producers will get a payment based on productive history and inventory later on.

Additionally, the Food Purchase and Distribution Program will implement $1.4 billion to buyout surplus commodities and send it to places like food banks and schools.

Finally another $100 million will be issued to the Agriculture Trade Promotion Program to develop new export markets.

USDA Chief Economist Robert Johansson says the program is a bit different from last time even though they are using the same economic models, "But we are looking back a number of years to what China has purchased from us in the past and we are bringing that into our baseline for applying those tariffs too and that does get us to a slightly larger number than we had last year."

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