Agricultural producers can apply for funds to offset tariff disruptions

OKLAHOMA CITY -- Farmers that have been hurt by widening trade feuds can apply to offset costs resulting from reduced exports.

Last week, the USDA announced it would release an initial $4.7 billion payment and buy $1.2 billion of surplus. Farmers can begin applying for aid through the Market Facilitation Program (MFP) on Tuesday, Sept. 4.

The initial $4.7 million of payments will go to qualifying corn, cotton, dairy, hog, sorghum, soybean, and wheat producers. It is part of a larger, $12 billion aid that was announced in July.

Rodd Moesel, president of the Oklahoma Farm Bureau, said the program is a way to give relief to farmers being punished by retaliatory tariffs from countries including China.

"Other countries that are upset with the tariffs that he’s [Trump] is imposing him on them on manufactured goods and intellectual goods — a lot of them have been trying to punish our country and try to get the President’s attention by punishing agriculture," Moesel said.

President Trump directed Agriculture Secretary Sonny Perdue to craft a short-term relief strategy to protect agricultural producers while the administration works on "free, fair, and reciprocal trade deals to open more markets in the long run", the USDA said in late August.

"Early on, the president instructed me, as secretary of agriculture, to make sure our farmers did not bear the brunt of unfair retaliatory tariffs," Secretary Perdue said. "After careful analysis of our team at the USDA, we formulated a strategy to mitigate the trade damages sustained by our farmers."

A payment will be issued on the first 50 percent of the producer’s total production for 2018. Initial payment rates are:

  • Corn: 1 cent per bushel
  • Cotton: extra-long staple and upland, 6 cents per pound
  • Sorghum: 86 cents per bushel
  • Soybeans: $1.65 per bushel
  • Wheat: 14 cents per bushel
  • Dairy: 12 cents per hundredweight
  • Hogs: $8 per head

Moesel said the tariffs have made the price for agriculture commodities drop dramatically, because they have less worldwide market. The cost to ship overseas has increased due to the tariffs. In Oklahoma, Moesel said the three commodities which have taken the heaviest hit are soybeans, pork, and cotton.

"A huge percent of our soybean production ships overseas. Suddenly there’s a lot more expenses to sell those products overseas so the soybean market has shrunk dramatically so we have way more soybeans than there are markets." he explained. "A lot of that pork in northwest Oklahoma is actually going to the Mexican markets, and so forth. Now with the increased tariffs, there’s a lot more pork now available in the United States than there is market."

He said the payments, while appreciated, will only offer a short term solution.

"We want to be selling our product, we don’t want government payments," he said. "We’re appreciative for the short term effort but like with any government program, the cost to administer these programs is so high that the real answer is being to answer our product all over the world."

David Von Tungeln's family has owned 160 acres of farmland on the west edge of El Reno for more than 100 years. He said about farmers depend on trade for their livelihood and pricing depends on foreign trade.

"I think about 75 to 80 percent of our wheat is exported overseas, grain sorghum probably not quite as much but pretty close," Von Tungeln said.

While wheat has not taken as hard of a hit as other crops, he said trade on wheat has decreased overall.

"The thing that’s been holding up the price of wheat a little bit has been the worldwide drought in the major wheat producing areas," he said.

MFP applications are available online. Agricultural producers may apply through Jan. 15, 2019.

Applications can be completed at a local FSA office or submitted electronically by scanning, emailing or faxing.