NDFU: Trade Relief Package Isn’t A Cure-all

 

JAMESTOWN, N.D. (NDFU) – The Trump administration’s announcement this week to distribute more than $6 billion in aid to farmers hurt by trade tariffs is welcome but will not make producers whole, said Mark Watne, president of North Dakota Farmers Union.

Half of the $12 billion in funds allocated will be distributed through the Farm Service Agency’s Market Facilitation Program (MFP) with a second payment later “if warranted,” according to U.S. Secretary of Agriculture Sonny Perdue in a USDA press release explaining program details.

“It’s frustrating that we’re using a Band-Aid approach to economic devastation,” said Watne. “Farmers are having to pay for a trade war they didn’t ask for and instead of the Administration’s promise to hold farmers harmless, they’re being asked to hang on indefinitely.”

The bulk of funding will go to soybean producers at $1.65 per bushel, which Watne said is misleading because the actual compensation rate is 82.5¢ per bushel given the 50 percent payment rate. The compensation isn’t enough to offset losses, making the ongoing drop in farm income even worse, he said.

“Has the Administration accounted for the damage we’re doing to trade relationships that ag and commodity groups have forged over decades? What about other crops, such as canola, that is similarly impacted? Nearly every crop is being harmed as commodity prices move together,” Watne emphasized. “Let’s not forget, too, that farmers facing weather conditions out of their control will be limited to payments that are based on lower production.”

“Even if trade tariffs were lifted and trade resumed today, it will take at least 60 days to get ships to the Pacific Northwest to move North Dakota commodities and that’s if we still have trading partners,” Watne said. “This isn’t a short-run game for agriculture.”

A better solution, he said, would be to raise crop reference prices dramatically in the farm bill. “This would provide a long-term solution to an issue that could drag on for years. Raising reference prices would offset the cost to farmers that are being impacted by the trade war. If the war is short lived and we actually have a win with higher market prices, then the higher reference prices would not have any additional cost to the government.”

Starting Sept. 4, farmers can apply for 50 percent compensation on their 2018 actual production of soybeans, corn, wheat, sorghum and cotton. Compensation for dairy producers will be based on per hundredweight of milk production, and per hog for pork producers. For more information, go to farmers.gov/mfp.


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