USDA's $16B Farm Aid Plan: Relief For Farm Equipment Industry
Zacks Investment Research | May 28, 2019 09:55PM ET
President Trump has authorized the U.S. Department of Agriculture (USDA) to provide a $16 billion aid for American farmers who have been affected by the protracted U.S. trade war with China. The program includes $14.5 billion in direct payments to producers with the first payment to be made in late July/early August followed by two more payments in November and early January as market conditions and trade opportunities dictate.
Additionally, the government plans bulk purchases of about $1.4 billion to purchase surplus commodities affected by trade retaliation such as fruits, vegetables, some processed foods, beef, pork, lamb, poultry, and milk. These purchases would then be utilized in food banks, pantries and school meal programs. The USDA also intends to implement a $100 million trade promotion program for livestock producers and certain crops to help industry sectors develop new markets. A similar program was launched as part of the administration’s 2018 trade relief program for agriculture.
The trade war has impacted a host of U.S. commodities, including crops like soybeans, corn, wheat, cotton, rice, and sorghum; livestock products like milk and pork; and several kinds of fruits, nuts, and other crops. Further, high tariffs disrupted normal marketing patterns, elevating costs by forcing producers to find new markets to clear the surplus stock. Moreover, stringent and cumbersome entry procedures affected quality and marketability of perishable crops escalating marketing costs for producers.
This aid program will help farmers to absorb some of the additional costs. It is definitely welcome news for the Original post
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