Recent changes in U.S. trade policies have sparked the need for farmer financial aid in the United States. The U. S. Department of Agriculture (USDA) released details about a financial aid package to help farmers Aug. 27. The farmer trade assistance package’s goal is to help farmers as they navigate uncharted territory in dealing with tariffs related to trade wars with Canada, China and Mexico.
Alabama Cooperative Extension System economist Max Runge said the hardest hit agricultural commodities—soybeans, cotton, pork, dairy, sorghum, wheat and corn—will share part of approximately $4.7 billion in the Market Facilitation Program (MFP).
“This is only one part of the three-part $12 billion trade assistance announced in July,” Runge said. “The payment rate for each commodity differs depending on how severely the commodity is affected by trade sanctions. USDA will determine payments based on a percentage of 2018 production.”
Trade Assistance Payments and Purchases
The first payment period begins on Sept. 4, 2018. If necessary, the USDA will determine a second payment period. The USDA’s Farm Service Agency will distribute these finances. Producers can apply after their 2018 harvest is 100 percent complete. Restrictions apply, however, producers can find more information by visiting https://www.farmers.gov/manage/trm.
USDA’s Agricultural Marketing Service will also oversee a food purchase and distribution program, which will purchase up to $1.2 billion in commodities for distribution via the USDA’s Food and Nutrition Services and child nutrition programs.
“The third part of the assistance to U.S. farmers is through the Foreign Agricultural Service’s Agricultural Trade Promotion Program,” Runge said. “This will help develop additional foreign markets for U.S. agricultural products.”
The $200 million available through this program will help exporters of U.S. agricultural products access new markets.
New NAFTA Agreement
A new North American Free Trade Agreement—now called the U.S. Mexico Free Trade Agreement—was also announced by the White House Aug. 27. Details are currently limited, but the agreement is expected to be signed before the end of the year.
Good News for Farmers
Runge said the new agreement and trade assistance package are encouraging.
“This news is good news for U.S. and Alabama farmers,” he said. “The payments from the MFP are not only timely, but needed due to low commodity prices and reduced farm income that our farmers are facing.
Find more information in the USDA’s Aug. 27 release. More information is also available by contacting your local Farm and Agribusiness Management team member. Find the state directory here.