Trade War Relief Coming Into Focus

Green ball cap that says "Make Our Farmers Great Again"
The hat says it all
Aug 28, 2018
WASHINGTON, DC -- The U.S. Department of Agriculture (USDA) yesterday released details on the Administration’s $12 billion trade war mitigation plan intended to provide relief to farmers affected by retaliatory tariffs placed on the agriculture sector by several of our trading partners.  The mitigation plan is comprised of three programs:  the Market Facilitation Program (MFP), Food Purchase and Distribution Program, and Agricultural Trade Promotion Program.

The Market Facilitation Program (MFP) is being administered by the Farm Service Agency (FSA) and will provide payments to producers for covered commodities.  Rice is not one (see “U.S. Rice Industry Says Trump Administration’s Trade War Mitigation Program Misses the Mark,” USA Rice Daily, July 26, 2018).

The Food Purchase and Distribution Program, which will be facilitated by the USDA-Agricultural Marketing Service (AMS), will allow USDA to purchase up to $1.24 billion of U.S.-grown commodities deemed affected by the tariffs.  USDA’s Food and Nutrition Service (FNS) plans to distribute these commodities through nutrition assistance programs such as The Emergency Food Assistance Program (TEFAP) and child nutrition programs.

Rice purchases are initially slated for up to $48.1 million that will be in addition to already existing rice purchases by AMS for similar programs, which average around $15.5 million each year.

USA Rice has been working with AMS to help the agency determine which types and package sizes are best to purchase first.  Total purchases under the Food Purchase Distribution Program will be dependent on participating states’ needs with a focus on targeting those who are most in need of food.  USDA officials were careful to reiterate that they do not want this program to negatively impact current domestic markets and buyers.

AMS and USA Rice are teaming up to present a private webinar to USA Rice members next month to assist and educate interested vendors on the process of becoming an approved vendor and to discuss further details of the Food Purchase and Distribution Program.

The Agricultural Trade Promotion (ATP) Program (formerly announced as the Trade Promotion Program) will be administered by the USDA-Foreign Agricultural Service and has been
allocated $200 million and is open to all sectors of the agriculture industry.   

Funding provided through the ATP program should be used towards promotion programs for current markets harmed by tariffs, as well as developing and expanding new markets.

“Rice is a trade-dependent crop with about half of our annual harvest destined for foreign markets, so there is no question the disruptions caused by these trade wars have hurt our industry,” said Charley Mathews, a California rice farmer and chairman of USA Rice.  “These mitigation programs may provide some temporary relief and that is welcome, but what we really need is a long-term solution and for countries to be held accountable for their unfair trade practices to ensure true free and open markets so U.S.-grown rice can compete on a level playing field.”