As China continues to raise barriers blocking the import of American farm products, the USDA recently announced registration for the second round of Market Facilitation Program (MFP) payments.
President Trump has authorized up to $14.5 billion in MFP payments, meant to help mitigate the negative effects of retaliatory tariffs stemming from ongoing trade disputes.
The program is open to a selection of non-specialty and specialty crops as well as dairy and hog producers. For non-specialty crops – such as cotton, wheat, soybeans, rice and corn – payments will depend on the calculated impact of trade retaliation in each county.
As Farm Policy Facts has previously reported, a healthy farm economy depends on the export of high-quality American products abroad. For perspective, the agriculture sector produces around $400 billion worth of crops and livestock per year, and exports near $150 billion worth of agricultural goods.
As the “tip of the spear” in this trade war, and already reeling from a prolonged rural recession, America’s farmers and ranchers have been deeply injured, and are therefore thankful that the Administration has taken action to help our rural communities during a particularly hard time.
“Farmers and ranchers are going through our 6th straight year of severe recession and unjustified foreign retaliatory tariffs are making already tough times even tougher,” said Matt Huie, President of the Southwest Council of Agribusiness. “Thankfully, the MFP-II announced by Secretary Perdue throws us a vital life-line to help ensure that we can make it through this year and hopefully secure the credit we need to return to the fields for the next growing season.”
Joe Mencer, chair of the USA Rice Farmers and an Arkansas rice farmer, noted that MFP payments will help rice farmers as they deal with the fallout from not only trade wars, but low commodity prices and extreme weather. “While these payments won’t make us whole, they will provide some much needed relief financially for rice producers across the country,” he said.
America’s cotton farmers pointed to China’s tariffs as a key reason for the declining health of the cotton industry as cotton exports lag and U.S. cotton loses market share to competitors in China. NCC Chairman Mike Tate, an Alabama cotton producer himself, expressed gratitude to the USDA for recognizing the trade pressures faced by farmers and taking action to provide assistance through MFP payments.
Brian Thalmann, President of the Minnesota Corn Growers Association, said that Minnesota’s “corn farmers appreciate the quick rollout of the MFP program and USDA’s efforts to better reflect the impact of ongoing trade disputes,” but also emphasized that corn growers are focused on developing long-term solutions to support farmers.
This sentiment was echoed by the National Association of Wheat Growers.
“NAWG appreciates the Administration recognizing the impact the current trade war with China is having on farmers,” stated National Association of Wheat Growers President and Lavon, Texas, farmer Ben Scholz. “However, this is a band-aid when we really need a long-term fix. NAWG understands holding China accountable for its WTO violations and unfair trade practices but a trade war is not the solution especially when farmers are the casualties. We continue to urge the Administration to quickly resolve the ongoing trade dispute with China and to negotiate new trade agreements, and Congress to act quickly on USMCA.”
This reality that the greater hope lies not in the trade aid – though that is important – but in the prospect of achieving a freer and more accountable international marketplace for the future is captured well in the conclusion of SWCA President Huie’s statement:
“The MFP-II also buys some time for Congress to pass USMCA this year and for the U.S. and China to successfully conclude trade negotiations to end the current dispute so we can achieve a truly free and fair global market where foreign countries are expected to play by the same set of rules that we do. On behalf of the SWCA, I commend the President and Secretary Perdue and his team at USDA for their hard work in developing an MFP-II package that provides real help to farmers and ranchers when we need it most.”