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USDA Offers Aid to Farmers Caught in Trade War

USDA Protection Farmer Trump Trade War Tariff

Posted on 08/09/2018 at 01:03 PM by Emily Staudacher

On July 24, 2018, the USDA announced plans to implement a three-pronged approach to assist farmers and relieve some of the pain caused by the trade negotiation strategies implemented by the Trump Administration.  The three prongs are:

  1. The Market Facilitation Program will provide direct payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs.  These payments with be administered by Farm Service Agency (FSA). 
  2. The Food Purchase and Distribution Program will purchase unexpected surplus of affected commodities, including, fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs.  This program will be administered through the Agricultural Marketing Service (AMS).
  3. The Trade Promotion Program will be administered by the Foreign Agriculture Service (FAS) in conjunction with the private sector to assist in developing new export markets for our farm products.

According to USDA officials, the Market Facilitation Program will likely receive the greatest portion of the resources allocated amongst the three programs. The formula for the amount of direct payments will be based upon 2018 harvest numbers.  In order to access the programs once they begin, producers will visit their local FSA office.  All of these programs are a short-term solution.  The USDA states that they are a short-term bridge to help the President successfully negotiate deals and they are not expected to continue into another year.

Congressional approval is not required for these three programs.  Authorization comes from Section 5 of the Commodity Credit Corporation (CCC) Charter Act.  The CCC was created in 1933 to stabilize, support, and protect farm income and prices and its inception dates back to the Great Depression.  The exact details of the program and payments are unclear at this time, as the USDA continues to do its “homework.”  USDA Officials stated that the specific details of the programs will be published as part of a rulemaking action “around Labor Day.”  It will be important for farmers to monitor details as they emerge to determine how they may be impacted.  As details develop, I will continue to keep this blog updated.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.

- Emily Staudacher 

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