This week, the U.S. Department of Agriculture released details of the trade aid package announced in July. USDA is spreading $6.3 billion over three different programs to help mitigate the negative effects from retaliatory tariffs.
Direct payments
Beginning on Tuesday, Sept. 4, farmers will be able to sign up for the direct payment portion of the package, Market Facilitation Program. Seven commodities are targeted to share $4.6 billion, with $127 million of that allocated to dairy farmers. Farmers are encouraged to sign up as soon as possible.
Dairy payment rates are set at $0.12 per cwt and based on 50 percent of each farm’s annual milk production. (Payment = $0.12 x 50 percent of total milk production).
Total milk production will be calculated using the highest annual production reported for the Margin Protection Program for Dairy during the 2011, 2012 and 2013 calendar years. Farmers who are not participating in MPP can still sign up. If a farmer was not farming during those three years, the payment will be calculated in the same way it would be if the farmer was newly signing up for MPP. Dairy farms must have been in operation on June 1, 2018, to participate.
The direct payments are capped at $125,000 per person or legal entity.
To be eligible, farmers must:
Have an ownership interest and be actively engaged in farming.
Have had an average adjusted gross income of less than $900,000 per year for tax years 2014, 2015 and 2016.
Comply with highly erodible land and wetland conservation requirements.
Applications are available online and must be submitted to the local USDA service center.
USDA may announce a second payment with a December 2018 start date through which the remaining 50 percent of annual production would be eligible for the payment.
Food purchases
The second part of the aid package is the Food Purchase and Distribution Program though which $1.2 billion will be spent to buy food products and distribute them to food banks. Dairy food purchases will make up $84 million of the total, but USDA is still developing a target dairy product list.
Trade promotion
The third component of the announcement is $200 million in funding for a new Ag Trade Promotion Program. This program will help build long-term trading relationships and open market access for dairy products. Applications will also be available online on Sept. 4. USDA is allowing for more flexibility with what products or programs can be funded than the existing USDA trade promotion programs.
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