IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 24 Jul 2018 | Removal date: open ended
Still in force

Financial grant

On July 24, 2018 Secretary of Agriculture Sonny Perdue announced that the U.S. Department of Agriculture (USDA) will take several actions to assist farmers in response to the damage done by other countries’ retaliation against U.S. trade measures. Under President Trump’s direction, USDA will “craft a short-term relief strategy to protect agricultural producers while the Administration works on free, fair, and reciprocal trade deals to open more markets in the long run to help American farmers compete globally.” More precisely, USDA will respond to the estimated $11 billion impact of the other countries’ retaliatory tariffs on U.S. agricultural goods by authorizing up to $12 billion in programs that are intended to assist agricultural producers in meeting the costs of disrupted markets.

The administration observes that “a disproportionate amount” of the foreign retaliation “was targeted directly at American farmers,” affecting “a host of U.S. commodities, including field crops like soybeans and sorghum, livestock products like milk and pork, and many fruits, nuts, and other specialty crops.” The USDA announcement also said “there is evidence that American goods shipped overseas are being slowed from reaching market by unusually strict or cumbersome entry procedures, which can affect the quality and marketability of perishable crops.”

The USDA’s response will be based on three programs, namely the Market Facilitation Program, a Food Purchase and Distribution Program, and a Trade Promotion Program. By relying on its existing authorities, the administration appears to have avoided the necessity of seeking congressional approval for its plan. 

The Market Facilitation Program, authorized under The Commodity Credit Corporation (CCC) Charter Act and administered by Farm Service Agency (FSA), will provide payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs. This support will help farmers manage disrupted markets, deal with surplus commodities, and expand and develop new markets at home and abroad.

On August 27, 2018 the USDA announced further details on this aspect of the policy. For each commodity covered, the payment rate will be dependent upon the severity of the trade disruption and the period of adjustment to new trade patterns, based on each producer’s actual production. Interested producers can apply after harvest is 100 percent complete and they can report their total 2018 production. Eligible applicants must have an ownership interest in the commodity, be actively engaged in farming, and have an average adjusted gross income (AGI) for tax years 2014, 2015, and 2016 of less than $900,000. Applicants must also comply with the provisions of the “Highly Erodible Land and Wetland Conservation” regulations. On September 4, 2018, the first MFP payment periods will begin. The second payment period, if warranted, will be determined by the USDA.

The USDA will make $4,696,300,000 available under this MFP program, the bulk of which ($3,629,700,000) will go to soybean producers. Other supported commodities are cotton, corn, milk, hogs, sorghum, and wheat. The initial MFP payment will be calculated by multiplying 50 percent of the producer’s total 2018 actual production by the applicable MFP rate. If CCC announces a second MFP payment period, the remaining 50 percent of the producer’s total 2018 actual production will be subject to the second MFP payment rate.

 

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

011 Cereals
1001 Wheat and meslin.
100119 Other
100199 Other
1005 Maize (corn).
100590 Other
014 Oilseeds & oleaginous fruits
1201 Soya beans, whether or not broken.
120190 Other
019 Forage; natural rubber; living plants; raw vegetable materials
5201 Cotton, not carded or combed.
520100 Cotton, not carded or combed.
021 Live animals
0103 Live swine.
010391 Weighing less than 50 kg
010392 Weighing 50 kg or more
221 Processed liquid milk, cream & whey
0401 Milk and cream, not concentrated nor containing added sugar or other sweetening matter.
040120 Of a fat content, by weight, exceeding 1 % but not exceeding 6 %
040140 Of a fat content, by weight, exceeding 6 % but not exceeding 10 %
040150 Of a fat content, by weight, exceeding 10 %
0404 Whey, whether or not concentrated or containing added sugar or other sweetening matter; products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included.
040410 Whey and modified whey, whether or not concentrated or containing added sugar or other sweetening matter
222 Other dairy products
0402 Milk and cream, concentrated or containing added sugar or other sweetening matter.
040210 In powder, granules or other solid forms, of a fat content, by weight, not exceeding 1.5 %
040221 Not containing added sugar or other sweetening matter
040229 Other
040291 Not containing added sugar or other sweetening matter
040299 Other
0403 Buttermilk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and cream, whether or not concentrated or containing added sugar or other sweetening matter or flavoured or containing added fruit, nuts or cocoa.
040310 Yogurt
040390 Other
0404 Whey, whether or not concentrated or containing added sugar or other sweetening matter; products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included.
040490 Other
0405 Butter and other fats and oils derived from milk; dairy spreads.
040510 Butter
040520 Dairy spreads
040590 Other
0406 Cheese and curd.
040610 Fresh (unripened or uncured) cheese, including whey cheese, and curd
040620 Grated or powdered cheese, of all kinds
040630 Processed cheese, not grated or powdered
040640 Blueveined cheese and other cheese containing veins produced by Penicillium roqueforti
040690 Other cheese

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