Trade and markets
 

Detail

Area
United States of America
Commodity Group
Oilseeds, oils and meals
Commodity
Crops, livestock products
Date
18/08/2018
Policy Category
Production
Policy Instrument
Agricultural policy
Description
Announced details of public assistance to be provided to farmers impacted by China’s introduction of retaliatory tariffs, including direct payments, Government procurement of affected commodities for distribution to public nutrition programmes, and trade promotion programmes to assist in developing new export markets.
Notes
The US Government provided details about its support programme for farmers impacted by China’s introduction of retaliatory tariffs (see also MPPU Aug.’18). To assist farmers to meet the costs of disrupted markets, three measures will be implemented. First, under the Market Facilitation Program (MFP), producers will be granted USD 4.7 billion of direct payments. Roughly USD 3.6 million have been earmarked for soybean producers, with the remainder going to the sorghum, maize, wheat, cotton, dairy and meat sectors. Programme enrolment under MFP opened on 4 September and will close in January 2019. Based on the severity of trade disruption and the period of adjustment to new trade patterns, the initial payment rate for soybeans – the most affected commodity – has been set at USD 60.62 per tonne, to be paid on half of each producer’s actual 2018 production. Additional payments will be announced in the coming months, if warranted. MFP payments per farmer are capped at a combined USD 125 000 for soybeans, maize, cotton, sorghum and wheat. Second, a USD 1.2 billion Food Purchase and Distribution Program will procure various impacted agricultural products – excluding soybeans – for distribution to recipients through existing nutrition and child assistance schemes. Third, the Agricultural Trade Promotion Program (USD 200 million) will enable eligible stakeholders to identify and develop new export markets for all affected commodities on a cost-sharing basis. Activities envisaged comprise consumer advertising, public relations, point-of-sale demonstrations, trade fairs and exhibitions, market research, and technical assistance. The United States’ aid package provoked strong interest among trade partners. At the WTO, member states asked for details on the methodology of the programme, its duration, and its consistency with WTO rules. The United States stressed that its relief programme was a one-time measure, limited to the September 2018–January 2019 period, adding that it would not entail export subsidies nor involve public stockholding operations.