Legislative Watch: $12 billion aid package to help farmers survive trade wars; EU-U.S. trade tensions ease, and ag committees discussing farm bill.

P. Scott Shearer, Vice President

July 27, 2018

5 Min Read
Trump has farmers’ backs with aid package
Getty Images/Chung Sung-Jun

The administration announced a $12 billion aid package to help producers offset the estimated $11 billion in economic damages they have endured because of the administration’s multi-country trade war. Secretary of Agriculture Sonny Perdue says this delivers on President Trump’s promise to farmers and ranchers to assist farmers and ranchers because of “illegal tariffs.”

Perdue says this is a short-term solution to give the administration time to work on long-term trade deals that will benefit agriculture and the U.S. economy.

Perdue says, “The president promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong. Unfortunately, America’s hard-working agricultural producers have been treated unfairly by China’s illegal trading practices and have taken a disproportionate hit when it comes to illegal retaliatory tariffs. USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations.”

The $12 billion will be delivered through three programs, but USDA is still working on the details of the programs.

• Market Facilitation Program: The program will be administered by the Farm Service Agency and will make payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs. This support is to help farmers manage disrupted markets, deal with surplus commodities, and expand and develop new markets at home and abroad. Sign-up for this program is expected to begin in September.

• Food Purchase and Distribution Program: The program will be administered by the Agricultural Marketing Service to purchase surplus commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs.

• Trade Promotion Program: This new program will be administered by the Foreign Agricultural Service in conjunction with the private sector to assist in developing new export markets for agricultural products.

Many agricultural groups thank the president for the temporary relief, but say trade was better than payments and it was important to reopen markets as soon as possible.

Farmers for Free Trade says, “Farmers across America depend on open markets and stable contracts for their livelihood. The best relief for the president’s trade war would be ending the trade war. Farmers need contracts, not compensation, so they can create stability and plan for the future. This proposed action would only be a short-term attempt at masking the long-term damage caused by tariffs.”

The National Pork Producers Council says in a statement, “The restrictions we face in critical markets … have placed American pig farmers and their families in dire financial straits. We thank the president for taking immediate action. While we recognize the complexities of resetting U.S. trade policy, we hope that U.S. pork will soon regain the chance to compete on a level playing field in markets around the globe.”

The North American Meat Institute says, “The magnitude of potential losses from markets around the world where U.S. meat products will become far less competitive cost-wise will reach deep into rural America, and livestock producers will likely scale back herds as they face declining, export-linked demand for their livestock. Once foreign markets are lost to competitors, regaining them is extraordinarily difficult, and that is why it is critical to act now to reverse course.”

The National Association of Wheat Growers and the U.S. Wheat Associates in a joint statement say, they were “glad that the administration recognizes farming as a risky business and acknowledges that farmers need help to manage the additional risk from its trade policies. However, our concerns still lie in a lengthy trade war that will cause long-term, irreparable harm to U.S. agriculture. We urge the administration to recognize this self-inflicted damage and to end the trade war immediately as well as to work within the rules-based trading system in partnership with like-minded countries to address serious problems in the global economy.”

The American Soybean Association says, “The American Soybean Association has consistently advised the administration that the best way to reduce our nation’s trade deficit is by increasing exports, including of agricultural products. Since the administration has decided to use tariffs to address trade concerns with China, and China has retaliated, farmers don’t have time to wait to see how this trade war turns out.

“U.S. soybean producers want to see President Trump succeed in meeting his trade campaign goals of achieving better trade deals and greater market access. And, we appreciate that he has recognized our loss in exports and lower prices and provided some immediate relief.”

EU-U.S. trade tensions ease
President Trump and EU Commission President Jean-Claude Juncker announced the European Union and United States had reached a deal to begin negotiations toward zero tariffs on non-auto industrial goods and to reform the World Trade Organization. The EU also pledged to buy more U.S. soybeans and liquefied natural gas.

Earlier this year, the United States placed tariffs on $3 billion of EU steel and aluminum. The EU retaliated with tariffs on $3 billion of U.S. goods including corn, rice, orange juice and cranberries.

Ag committees’ leadership discuss farm bill
Sens. Pat Roberts (R-KS), chairman of the Senate Agriculture Committee, and Debbie Stabenow (D-MI), ranking member, and Congressmen Mike Conaway (R-TX), chairman of the House Agriculture Committee, and Collin Peterson (D-MN), ranking member, met yesterday to discuss the farm bill and the importance of completing the bill by Sept. 30.

In a joint statement the leadership of the agriculture committees say, “We look forward to working together to get a farm bill finished as quickly as possible, and we’re committed to finding solutions to resolve the differences. We must keep working to provide American farmers and families with the certainty and predictability they need and deserve.”

The Senate leadership plans to name the nine Senate farm bill conferees next week.

About the Author(s)

P. Scott Shearer

Vice President, Bockorny Group, Inc.

Scott Shearer is vice president of the Bockorny Group Inc., a leading bipartisan government affairs consulting firm in Washington, D.C. With more than 30 years experience in government and corporate relations in state and national arenas, he is recognized as a leader in agricultural trade issues, having served as co-chairman of the Agricultural Coalition for U.S.-China Trade and co-chairman of the Agricultural Coalition for Trade Promotion Authority. Scott was instrumental in the passage of China Permanent Normal Trade Relations and TPA. He is past chairman of the USDA-USTR Agricultural Technical Advisory Committee for Trade in Animals and Animal Products and was a member of the USAID Food Security Advisory Committee. Prior to joining the Bockorny Group, Scott served as director of national relations for Farmland Industries Inc., as well as USDA’s Deputy Assistant Secretary for Congressional Affairs (1993-96), serving as liaison for the Secretary of Agriculture and the USDA to Congress.

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