Congress, farm groups, others, react to Trump farmer bailout plan

Source: By Larry Dreiling, High Plains Journal • Posted: Thursday, August 30, 2018

Reaction was mixed to the announcement Aug. 27 of a $6.110 billion plan by the U.S. Department of Agriculture and Secretary of Agriculture Sonny Perdue to assist farmers affected by Trump administration moves on foreign trade and subsequent retaliation by those nations.

Overall, the USDA plan is allowed to authorize up to $12 billion in programs, consistent with World Trade Organization obligations, according to a USDA release.

Senate Agriculture Committee chairman Pat Roberts, R-KS, said in a statement, “I appreciate Secretary Perdue’s efforts to provide temporary relief to our hard-working farmers who are being affected by tariffs.

“However, with low prices across the board, our farmers need long-term certainty. They want the predictability of export markets over aid. The announcement on a preliminary agreement with Mexico is a critical step in the right direction. We also need to quickly finish our work on a bipartisan farm bill that contains programs that provide much-needed certainty and predictability for farmers, ranchers, growers and other stakeholders in rural America.”

Senate Minority Leader Chuck Schumer, D-NY, said in a floor speech a few days earlier, “The president’s bailout is like a Soviet-style program where the government props up an entire sector of the economy. And that characterization is one that I spoke of this morning to several colleagues, and I’ve now been told one of my Republican colleagues used the same characterization,” referring to comments from Sen. Ron Johnson, R-WI.

American Farm Bureau Federation President Zippy Duvall said in a statement, “The administration’s tariff mitigation package is welcome relief from the battering our farmers and ranchers are taking in the ongoing trade war. There is no doubt that the tariffs from nations like China have led to lower crop and livestock prices.

“This comes on top of nearly five years of falling commodity prices that have led to lower revenues and higher debt levels for farmers and ranchers. Nationwide, income is at a 12-year low, so any assistance that may help farmers is greatly appreciated: We lost more than 150,000 farms to consolidation and financial failure in the U.S. during the decade that ended in 2017.

“The additional burden of tariffs on the goods we sell to China, Canada, Mexico and the European Union has been more than many farmers can bear. Today’s aid announcement gives us some breathing room, but it will keep many of us going only a few months more.

“The real solution to this trade war is to take a tough stance at the negotiating table and quickly find a resolution with our trading partners. If we’re going to turn our farm economy around for the long-term, we need to open more export markets with fair trade deals, and the sooner, the better.”

Rob Larew, NFU senior vice president of public policy and communications, said, “The USDA aid package is appreciated, and it will begin to help many of those that are suffering the brunt of the retaliation from China and other trading partners. But our family farmers and ranchers need strong markets and long-term certainty.

“This trade war has already caused irreparable, long-term harm to what were strong trade relationships for American family farmers and ranchers. As a result, farm prices continue to plummet for U.S. farm goods, and our competitors are putting more land into production to fill the void.

“Farmers Union wants to see the administration pursue fair trade agreements to the benefit of farmers and rural communities. But it must transition away from an ad hoc emergency aid strategy and to work with Congress to develop a legislative solution to low farm prices that keeps family farmers in business.

“While the current farm economy and outlook are bleak, the administration and Congress have the tools to protect family farmers over the course of this trade war.”

The Environmental Working Group’s Senior Vice President for Government Affairs Scott Faber, said in a statement, “Today’s announcement by USDA is a disaster for the small, family farmers hurt the most by Trump’s trade war. By failing to put more reasonable limits on farm bailout payments, Trump’s USDA will provide the lion’s share of the payment to the largest and most successful farmers.

“Congress should immediately act to place tighter limits on the payments provided through Trump’s scheme, and should deny bailout payments to millionaires and city slickers who do not live or work on the farm. Under today’s proposal, thousands of city slickers will receive payments.”

Commodity groups react

Market Facilitation Program payments will be made on 50 percent of a producers’ total 2018 actual production by the applicable MFP rate. Once harvest is complete, production evidence must be provided to the local USDA Farm Service Agency office before payments will be made. The Market Facilitation payments are subject to the existing $900,000 adjusted gross income means test and a separate $125,000 per person payment limit for the eligible crops.

If the Commodity Credit Corporation announces a second MFP payment period, the remaining 50 percent of the producer’s total 2018 actual production will be subject to the second MFP payment rate.

Soybean growers will receive the largest share of the payments, at the rate of $1.65 per bushel, with an estimated total payment of $3.629 billion. American Soybean Association President John Heisdorffer said his group welcomed the announcement.

“This will provide a real shot in the arm for our growers, who have seen soybean prices fall by about $2 per bushel, or 20 percent, since events leading to the current tariff war with China began impacting markets in June,” Heisdorffer, a soybean producer from Keota, Iowa, said. “This assistance will be particularly helpful to farmers who didn’t forward-contract their crop earlier this year and who need to arrange financing for planting next year’s crop.

“ASA strongly supports USDA’s initiative to provide an additional $200 million to develop foreign markets through a Trade Promotion Program. Increasing funding for market development has been a top ASA priority for this year’s farm bill and is even more critical given the need to find new export markets for U.S. soy and livestock products.”

Corn growers were not as jubilant, as they will receive the smallest share of the payments, at the rate of 1 cent per bushel, with an estimated total payment of $96 million. National Corn Growers Association President Kevin Skunes, of North Dakota, let his disappointment be known in a statement, saying, “NCGA members had a spirited debate on the prospect of trade aid during last month’s Corn Congress meeting. While most members prefer trade over aid, they support relief if it helps some farmers provide assurances to their local bankers and get through another planting season. Unfortunately, this plan provides virtually no relief to corn farmers.

“NCGA has understood from the beginning that this aid package would neither make farmers whole nor offset long-term erosion of export markets. But, even with lowered expectations, it is disappointing that this plan does not consider the extent of the damage done to corn farmers. Once again, we are calling on the administration to settle trade disputes and support a strong Renewable Fuel Standard. These no-cost, immediate actions would deliver a real win for rural America.”

Sorghum growers managed to land in between corn and soybean farmers, as they net a payment at the rate of 86 cents per bushel, with an estimated total payment of $156.8 million.

“National Sorghum Producers would like to thank USDA Secretary Sonny Perdue and U.S. officials who have worked together to stand by U.S. farmers and provide much needed relief,” the group said in a statement. “This sends a strong message to the international trade community and will hopefully facilitate a speedy resolve to our current trade disputes.”

Wheat farmers will receive a payment at the rate of 14 cents per bushel, with an estimated total payment of $119.2 million.

National Association of Wheat Growers President Jimmie Musick said in a statement, “In public remarks last week, Secretary Perdue stated that the federal aid package for farmers being harmed by our current trade war with China won’t seem like it’s equitable. This was made clear today when the administration introduced a proposal, which poorly reflects the reality that all farmers are being harmed by tariffs.”

“About half of all U.S. wheat is exported, making new trade deals and establishing new global markets, a priority for all wheat farmers,” he said. “As a result of the tariffs, China hasn’t purchased any wheat from the United States since March. Further, we estimate that the ongoing trade war will cause a 75-cent per bushel price decrease and a reduction in global wheat production.”

Cotton farmers will receive a payment at the rate of 6 cents per bushel, with an estimated total payment of $276.9 million.

National Cotton Council Chairman Ron Craft, a Plains, Texas, ginner, said in a statement, “The tariff mitigation program will help address a portion of the losses cotton producers are facing in the marketplace. However, there is continued economic stress on producers in areas of the Cotton Belt that have lost production this year due to severe drought. In addition, cotton and cottonseed industry participants throughout the marketing channels are also feeling the impacts of the retaliatory tariffs.”

Larry Dreiling can be reached at 785-628-1117 or ldreiling@hpj.com.

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