How Did Soybeans Receive Three-Fourths Of Initial Aid? USDA To Explain

08:20PM Sep 06, 2018
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Since further details about USDA’s Market Facilitation program, which is part of the agency’s $12 billion tariff aid package, were released, corn and wheat farmers have questioned why their payment rates are so low. USDA could release more details on how those rates were calculated as early as next week.

"If you look at where tariffs were enforced and where we had shipped corn, that’s how the calculations came out," Agriculture Secretary Sonny Perdue said at a press event this week adding USDA used “calculations that are known to economists that will calculate the tariff damages.” Perdue says the final numbers were “affirmed” by the White House Council of Economic Advisers and the Office of Management and Budget. 

Perdue said USDA will be “as transparent as possible” when they explain how the payments were calculated. That explanation could come from USDA’s chief economist, Robert Johansson when he testifies before the Senate Ag Committee on trade next week.

According to Pro Farmer’s policy analyst Jim Wiesemeyer, the explanation comes after officials from the National Corn Growers Association (NCGA) and National Association of Wheat Growers (NAWG) asked USDA officials for more information about the calculations. USDA determined that corn growers will receive payments at a rate of a penny per bushel while wheat growers will get 14 cents per bushel. Those payments are only on half of 2018 production. In contrast, corn growers say they’ve lost 44 cents per bushel on account of retaliatory tariffs, and NAWG estimates wheat growers are losing 75 cents per bushel. Wiesemeyer says soybean growers stand to receive about three-fourths of the initial aid payments.

“On the face of it, I can see why corn farmers would say, ‘Why this, why that for soybeans?’ — yet that was the determined amount of tariff damage,” Perdue told reporters after an event at USDA. “Dr. Johansson has tried to explain [the methodology] to me a number of times.”