USDA launches trade mitigation programs

September 04 , 2018

U.S. Secretary of Agriculture Sonny Perdue today launched the trade mitigation package aimed at assisting farmers suffering from damage due to “unjustified trade retaliation by foreign nations.”

Producers of certain commodities like wheat and corn can now sign up for the Market Facilitation Program (MFP), while the USDA will also begin to purchase fruit, vegetable and nut commodities under a food purchase and distribution program.

Additionally, the USDA has begun accepting proposals for the Agricultural Trade Promotion Program (ATP). 

In total, the organization will authorize up to US$12 billion in programs, which it said are consistent with World Trade Organization obligations. 

Many produce exporters have seen tariffs going into China rise from 10% to 50% over recent months, while apple growers have also been hit with a 20% tariff going into Mexico, and India has threatened to implement tariffs on U.S. apples later this month.

“These programs will allow President Trump time to strike long-term trade deals to benefit our entire economy, including the agricultural sector, in the long run,” Perdue said. 

“Farmers will tell you that they would always prefer to sell a good crop at a fair price, rather than receive government aid, and that’s what long-term trade deals will accomplish. 

“But in the meantime, President Trump has promised that he will not allow American agriculture to bear the brunt of the unjustified retaliation from foreign nations. Today we are putting the President’s promise into action.”

Food Purchase and Distribution Program

Beginning this week, the AMS will issue pre-solicitation notices through GovDelivery for targeted commodities. These notices will outline products USDA intends to purchase and will continue over the next several weeks.

AMS will purchase products over four quarters in the new Federal fiscal year, which starts on Oct. 1, 2018. The materials purchased may be adjusted between quarters to accommodate changes due to growing conditions, product availability, market conditions, trade negotiation status, and program capacity, among other factors, the USDA said.

“To expedite first quarter purchases, AMS will focus on products currently purchased for nutrition assistance programs given the existence of qualified USDA suppliers and specifications for these products,” it said.

“Examples include various forms and varieties of apples, pork, beef, dairy, blueberries, grapefruit, oranges, pears, cranberries, plums/prunes, walnuts, potatoes, rice, kidney and navy beans. By purchasing known commodities first, AMS can procure commodities that have been sourced in the past with maximum speed and impact.”

The total amounts set aside for each commodity are as follows:

Commodity  Target Amount (in $1,000s)
Apples $93,400
Apricots $200
Beef $14,800
Blueberries $1,700
Cranberries $32,800
Dairy $84,900
Figs $15
Grapefruit $700
Grapes $48,200
Hazelnuts $2,100
Kidney Beans $14,200
Lemons/Limes $3,400
Lentils $1,800
Macadamia $7,700
Navy Beans $18,000
Oranges (Fresh) $55,600
Orange Juice $24,000
Peanut Butter $12,300
Pears $1,400
Peas $11,800
Pecans $16,000
Pistachios $85,200
Plums/Prunes $18,700
Pork $558,800
Potatoes $44,500
Rice $48,100
Strawberries $1,500
Sweet Corn $2,400
Walnuts $34,600
Total $1,238,800

The USDA said it is currently working to determine how to address market disruptions for producers of almonds and sweet cherries. Previously, however, the organization said it had set aside US$111.5 million for sweet cherries and US$63.3 million for almonds.

Response from almond industry

In a release, the Almond Board of California (ABC) said it believed the funds for almonds would be a combination of the Market Facilitation and Food Purchase programs. 

“There are a lot of issues that still need to be addressed,” said Julie Adams, ABC vice president of global technical and regulatory affairs.

“The trade damages we’re dealing with are significantly more than what’s represented by mitigation programs.”

California almond farmers exported about US$500 million to China/Hong Kong alone in 2016-17. The ABC said the impact of the tariff rise from 10% to 50% will become clearer as new crop shipments get underway.

“The Almond Alliance has been actively engaged with USDA and legislature, leading efforts to ensure that almonds are included in all three mitigation packages,” said Adams.

“The Almond Board is continuing to support these efforts in our meetings with federal agencies and leadership, stressing the value of almond exports, market development investments, and the negative impact of interrupted trade.”

 

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