WASHINGTON, D.C. (WSAW) -- There's a key difference in Thursday's announcement of $16 billion in federal tariff compensation aid to farmers, as opposed to a similar round of funding last December. Payments for non-specialty crops like corn, wheat and soy won't be based around what a farmer plants, but instead--where they plant.
The U.S. Department of Agriculture's Secretary Sonny Perdue announced that of that $16 billion, $14.5 billion would go into the market facilitation program, which provides direct payments to farmers impacted by the trade war with China. Last year, payments were based on commodities, where a bushel of corn got $0.01 and a bushel of soybeans $1.65.
But with this announcement coming during the planting season instead of the end of the year, the payments will instead be distributed by county. Program facilitators will measure how badly a county was impacted by trade damage, divide that damage by how many acres in the county were planted, then distribute single payments to farmers.
"We need to make sure that folks have the complete flexibility in this planting season to plant what works for them," noted USDA under secretary Bill Northey. "That economic decision will not be impacted by the payment that they receive depending on the production they choose."
Northey explains that the decision comes so that farmers make planting decisions solely on their own agronomic situation, rather than considering differential payments between crops.
"This year we're still in a place where some producers are making planting decisions, and we need to make sure that folks have the complete flexibility in this planting season to plant what works for them," Northey explained.
Wisconsin farmer and vice president of the National Farmers Union, Patty Edelburg, says this formula might work better for farmers.
"I think it will be a little bit better; it's gonna cover more commodities, gonna cover more farmers. Farmers in general are gonna get a little bit more out of this," she told NewsChannel 7. She says she's glad the Trump administration is doing something for farmers, but she did have a concern.
"The problem I'm seeing right now is it's going to be based on 2019's planting decisions, and the fact it's so wet right now, especially in the Midwest; farmers are not exactly going to be planting a lot this year," she noted.
She echoed concerns of several farmers who NewsChannel 7 has spoken to through our continued coverage of local tariff impact on farmers.
The USDA isn't yet announcing rates for dairy and pork, which are included in the market facilitation program, but say they will process them similarly to last year. They also added specialty crops including cranberry and grape, which will be individually priced by commodity rather than with the blended formula of non-specialty crops.
Payments will come out in three different installments, with the first expected in July or August, the second in late Fall, and the third likely in early 2020, Northey said. However, he added they "plan and hope" to have a trade agreement ahead of the second and third payments, so some of that $14.5 billion might never get paid out.
Northey also emphasized the payments are "not designed to be market loss payment, they are a market facilitation payment. It's not going to perfectly reflect what some producers feel the loss of the markets have been."
The remaining $1.5 billion will be spread between a food purchase and distribution program and the Ag Trade Promotion program (APP).