Corn and beans with money

Farmers could get a check from USDA as soon as late July as part of a USDA program aimed at offsetting agriculture’s losses due to the trade war with China.

U.S. Secretary of Agriculture Sonny Perdue made the announcement May 23 in a conference call with reporters. Many of the details of the new aid program are yet to be announced, but Perdue said it will be for up to $16 billion, the majority of which will be direct payments to farmers through the Commodity Credit Corporation (CCC), as was the case for the last round of payments.

Those direct payments, however, will differ this time around due in part to the time of the year they will be made.

“It’s a food security issue,” Perdue said of the new round of payments, adding that “the plan we are announcing today ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners.

He added that USDA staff “reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers.”

Leaders of various agricultural and commodity organizations have made the point that a trade war with China hurts farmers disproportionately and at a time when farm income is already low. They also have stressed that ending the trade war would be more helpful than providing aid, although the aid is welcome.

“We appreciate USDA’s work to mitigate family farmers’ losses as a result of these trade disputes,” said National Farmers Union President Roger Johnson in a news release. “However, while this trade aid package is an improvement over last year’s Market Facilitation Program, by definition it fails to provide predictable, consistent and adequate relief across American agriculture.”

The new program, like the one implemented last winter, will include three components. About $100 million will be put into the Agricultural Trade Promotion Program through the Foreign Agriculture Service. The CCC Charter Act authority will also be used to fund about $1.4 billion in food buys through the Food Purchase and Distribution Program (FPDP) through the Agricultural Marketing Service. That will go toward buying food to give to food banks, schools and other places.

The biggest piece of the package is the authorization of about $14.5 billion through the Market Facilitation Program of the CCC to be used for direct payments to farmers through the Farm Service Agency.

Farmers are not guaranteed to get all of that $14.5 billion. It will be divided between three payments, the first of which Perdue said could come as soon as late July or August, after the FSA crop reporting is completed on July 15. Perdue said it is likely the money will be front-loaded, with more in the first payment than subsequent payments.

And those second and third payments are not guaranteed but will be dependent on what happens in the coming months with trade negotiations.

“It’s hard to see how a trade deal could be struck before the first payment,” said Bill Northey, the USDA undersecretary for farm production and conservation. “So the first one is more of a certainty this time.”

Unlike last winter’s payments, this one will not necessarily be based on a dollar and cents figure per bushel of corn or soybeans or any other individual crop, according to Northey. Instead, it will be based on planted acres, and payments will be determined for each county. Northey said the payments will not be based on what crop a farmer plants in 2019.

Producers of alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium-grain rice, mustard seed, dried beans, oats, peanuts, rapeseed, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, upland cotton and wheat will receive a payment based on that single county rate multiplied by a farm’s total plantings to all of those crops in 2019. Total eligible plantings cannot exceed total 2018 plantings.

There will also be a payment to dairy producers per hundredweight, and hog producers will receive a payment based on hog and pig inventory for a later-to-be specified time frame.

Tree nut producers, fresh sweet cherry producers, cranberry producers and fresh grape growers will get a payment based on 2019 acres of production.

Perdue said the second and third payments, if made, would likely come in November and January.

Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.