Impact of COVID-19 on Agriculture

Farmers Await Details on Second Round of Trade Aid Payments

News / FBNews November 26, 2018

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USDA is expected to soon announce the details of a second round of assistance for soybean, wheat, sorghum, cotton, dairy and pork farmers hurt by upheaval in foreign markets.

The most damaging of the trade disruptions are steep tariffs put in place by China on many U.S. agricultural goods as China and the U.S. go tariff-for-tariff in a trade war. With aggregate agricultural exports to China falling more than 65 percent year-over-year in August 2018, the list of U.S. commodities under pressure is long. For example, total dairy and pork product exports to China have fallen by nearly half in recent months, while soybean exports were down 97 percent in the first two months of the new marketing year.

The first round of Market Facilitation Program payments was announced in late August and will help support farm income this year and help family farmers service the record levels of agricultural debt they hold. In many cases, the MFP payments are being used as collateral for operating loans, American Farm Bureau Federation President Zippy Duvall noted in a letter to Agriculture Secretary Sonny Perdue.

In the run-up to USDA’s announcement that it had decided to move forward with the second—and final—round of MFP payments, Farm Bureau urged the department not to eliminate or reduce the trade aid.

“Instead, we propose you both evaluate the ongoing trade damages and reconsider the great need for more Market Facilitation Program payments to be delivered expeditiously to farmers and ranchers. With debt at record levels, operating loans increasing substantially, and debt-to-asset ratios climbing even more, financial support is needed across agriculture,” Duvall emphasized in the letter.

The Market Facilitation Program payments are part of the White House's trade mitigation efforts.  The administration has also pledged to purchase up to $1.2 billion in commodities unfairly targeted by unjustified retaliation. USDA’s Food and Nutrition Service will distribute these commodities through nutrition assistance programs. In addition, $200 million will be made available through the Foreign Agricultural Service’s Agricultural Trade Promotion Program to develop foreign markets for U.S. agricultural products.

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