Agriculture Secretary Sonny Perdue said Oct. 29 that the U.S. Department of Agriculture (USDA) is expected to issue a second round of trade mitigation payments to farmers and ranchers in December, likely containing the full amount of money initially promised.
President Donald Trump and Perdue announced in July that USDA would create a short-term relief strategy to protect U.S. agriculture producers from retaliatory tariffs imposed by foreign countries in response to U.S. tariffs on imports of steel, aluminum and other products. The department set aside a total of up to $12 billion to assist U.S. producers hit by retaliatory tariffs. The first tranche totaled roughly $6.3 billion. As of earlier this week, USDA had paid $292.8 million to farmers and had more than 125,000 applications for trade payments. Wheat, soybeans, corn, dairy and hogs have been the top five commodities for which payments were made.
“I was hoping to get it around October, November,” Perdue said of the second round of trade aid. “It looks like it may be December. But I wouldn’t expect the second tranche any later than December.”
To determine the payment rates for the so-called Market Facilitation Program (MFP) under which trade-mitigation payments are being made to producers, USDA used an approach often employed in adjudicating trade-dispute cases at the World Trade Organization. The MFP payments were split into two parts and the first tranche represented 50 percent of the announced MFP rates. The second tranche of MFP payments may account for other factors, such as new tariff levels, regional basis effects or other market conditions that may have mitigated some of the trade damages.
Perdue also noted on Monday that no more trade mitigation payments are likely in 2019. “There’s not contemplated a trade mitigation program for 2019,” he said. “Farmers are very resilient and adept at making their planning and marketing decisions based on the current market. These facts are known now, unlike they were in 2018. So, farmers, even under financial duress, will make their best business decisions for 2019 without the expectation of a market facilitation program.”