WTO nations question legality of U.S. disaster aid and trade-disruption assistance payments

By Sarah Gonzalez, Director of Communications and Digital Media

At the World Trade Organization (WTO), U.S. trading partners are questioning the implementation of the recently enacted disaster aid bill and the U.S. Department of Agriculture’s Market Facilitation Program (MFP) designed to partially compensate U.S. agricultural producers for income foregone because of trade disruptions.

Nations are submitting questions online in advance of the next round of meetings set for June 25-26.

Regarding disaster aid, the European Union (EU) asked, “In early June 2019, Congress approved a $19 billion disaster bill. Can the U.S. explain in more detail how it intends to implement that the legislation, once signed by the president, gives the USDA the discretion to increase the prevented planting payment factor on crop insurance to 90% instead of 55% for corn and 60% for soybeans?”

Several countries, including the EU, Canada, Australia, New Zealand, India and Ukraine, asked questions about the second USDA trade-disruption assistance package announced last month, specifically regarding MFP. USDA on May 23 announced the $16 billion package, including the authorization of up to $14.5 billion to be paid to producers between July 2019 and January 2020 under the program.

Australia said it’s concerned the second round of MFP “covers a wider range of commodities and may provide farmers with an increased payment (per unit/head) per commodity.”

 Meanwhile, Canada inquired: “Could the United States elaborate as to how this announcement made in the middle of the U.S. planting season “will not distort planting decisions?”  The EU asked, “how (the United States) intend(s) to notify these payments” to the WTO and in what year.

New Zealand asked: “Does the U.S. maintain that last year’s farmer relief package remains a one-off payment?” and “What steps has the US taken to ensure the USD 16 billion package does not influence U.S. farmers in their planting decisions for the coming season?”

The full set of inquiries can be found here.

Secretary of Agriculture Sonny Perdue on June 10 issued a statement on disaster and trade-related assistance, noting that the USDA will provide more information on the trade-related MFP payment rates and details of the various components of the disaster relief legislation “in the coming weeks.” NGFA provided information available thus far about the programs in this June 14 NGFA Newsletter article.