By Michelle Bigelbach
The Courier 

USDA Announces Details of Trade Aid; Net Income Has Decreased

 

September 5, 2018



MICHELLE BIGELBACH

THE COURIER

On Aug. 27, U.S. Secretary of Agriculture Sonny Perdue provided details of actions the U.S. Department of Agriculture (USDA) will take to help farmers who have been affected by retaliation from foreign nations in response to recent trade deals.

The current administration is working on free, fair and reciprocal trade deals to open more markets in the long run to help farmers compete. While these negotiations are occurring, President Trump requested Secretary Perdue to create a short-term relief strategy to protect agricultural producers. In a statement Perdue stated “After careful analysis by our team at USDA, we have formulated our strategy to mitigate the trade damages sustained by our farmers. Our farmers work hard, and are the most productive in the world, and we aim to protect them.”

According to the relief strategy, the USDA will send incremental payments to soybeans, sorghum, wheat, corn, pork, dairy and cotton producers through the Market Facilitation Program, which started Sept. 4. These payments will be based on their 2018 actual production and subject to payment limitations. The agency will also purchase commodities such as fruits, nuts, rice, legumes, beef, pork and milk through a Food Purchase and Distribution Program and authorize $200 million Trade Promotion Program to develop foreign markets for U.S. agricultural products.


Advocacy organization National Farmers Union (NFU) said in a statement they have also expressed previous requests for the administration to develop support in order to mitigate the damage being inflicted upon U.S. agriculture trade markets. NFU Senior Vice President of Public Policy and Communications Rob Larew issued a statement saying, “The USDA aid package is appreciated and it will begin to help many of those that are suffering the brunt of retaliation from China and other trading partners. Farmers Union wants to see the administration pursue fair trade agreements to the benefit of farmers and rural communities.”

These short-terms plans could be a great help to farmers in order to have a steady income this year and hopefully be on par as last year. On Aug. 30, the USDA Economic Research Service (ERS) projected net farm income to be $65.7 billion in 2018, which is a $9.8 billion, 13 percent decrease from 2017. The report also forecast a $12.4 billion (12 percent) drop in net cash farm income to $91.5 billion. This figure encompasses cash receipts from farming and farm-related income, including government payments. According to the release, net farm income is a more comprehensive measure that incorporates noncash items, including economic deprecation and changes in inventories. ERS does note that its 2018 forecasts, including net farm income, net cash farm income and government payments, do not include payments under the recently announced Market Facilitation Program.


The NFU stated these projections highlight the need for the administration and Congress to quickly find a solution on the 2018 farm bill, trade protections and biofuel market expansion. The NFU President Roger Johnson said in a press release, “As harvest approaches, these low farm prices are going to strike an even harder blow than they have in the past several years. The Trump administration and congressional leadership must right the wrongs of failed farm and trade policies and provide necessary support before more family farmers and ranchers have to shutter their barn doors.”

 

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