USDA Releases $3.6 Billion in Trump Tariff Payments

With the Sino-US trade war unresolved, the Trump administration released $3.625 billion in trade-war payments to farmers and ranchers on Friday to offset losses on 2019 production. "Payments will begin the week before Thanksgiving," said the USDA.

The new round of payments would be the second this year. The administration said up to $14.5 billion is available for cash payments to producers. Half of the money was offered in the first tranche, released in August. The new tranche amounts to one-fourth of the $14.5 billion with the remaining $3.625 billion possible in January.

"We need more permanent solutions than this current plan can provide," said president Roger Johnson of the National Farmers Union. "Even if and when these trade disputes are resolved, farmers will still be coping with the fallout for years to come." 

So far, USDA has disbursed $6.8 billion this year in Market Faciliation Program payments, the official name of the stopgap system created in 2018 to mitigate the impact of retaliatory tariffs on the agriculture sector. 

"While we continue to have confidence in the president’s negotiations with China, this money shows President Trump following through on his promise to help and support farmers as he continues to fight for fair market access," said Agricutlure Secretary Sonny Perdue. Negotiations are moving slower-than-expected on a "phase one" agreement with China that would include a commitment, according to President Trump, by Beijing to purchase up to $50 billion of US ag exports in two years. The purchases have become a sticking point in trade talks, according to published reports.

In 2018, $8.6 billion was paid out of $9.6 billion that was available in Trump tariff payments to producers. Payments fall short of the amount offered, said USDA officials, because some operators to not apply for aid. Payment limits and eligibility rules also reduce the payout.

Besides the $14.5 billion in cash offered to farmers, the USDA will purchase and give away $1.4 billion of commodities afffected by the trade war. It also awarded $100 million in funds to trade groups for export promotion work.

Earlier this week, Senate Democrats said the MFP was " “picking winners and losers between regions and crops”and unduly helping big operators by setting a $250,000 payment limit, double the usual limit.