Farmers expected to have details about the second round of tariff aid payments this week. What’s with the delay? Well, long story short, the payments are still under negotiation.
According to ProFarmer policy analyst Jim Wiesemeyer, USDA is still negotiating with the Office of Management and Budget (OMB) on a second round of farmer aid payments under the Market Facilitation Program (MFP). USDA had tentatively planned to release the details on Monday, but the department wanted to assess the potential impact of the U.S.-China truce, though the halt in trade hostilities did not immediately include a lifting of Beijing's retaliatory duties on U.S. agriculture products, Wiesemeyer said.
The Office of Management and Budget is tasked with making sure the cost of what the government projects it will spend to the best of its ability is kept in check, Tyson Redpath, senior vice president of The Russell Group explained to AgriTalk Radio Show’s host Chip Flory on Tuesday.
“Right now, what you have is a back and forth between the USDA and OMB on just what exactly the size of that package is going to be, and how much is going to be available,” he said. “So, I think you have a couple factors playing into it right now, one the positive talks over the weekend with China, and then, negotiation with OMB.”
Following the news of the trade truce with China, Secretary Perdue was quick to reassure farmers that payments would still be happening.
"From my perspective, nothing has changed from the tariff damage that farmers experience," Perdue said.
Still, current trade traction has to be considered.
“I think there is also a realization that before this second round of trade aid and trade relief payments go out, they want to look at the full spectrum of what the future likely holds, at least in the first quarter of next year for ag exports into China,” Redpath said.
How large those payments will be is unclear, but he expects them to be different from the first round.
“I think if the prospects for more normalized trade flows with China exist at some point next year, then I suspect some might say it will be, or should be, a little bit less,” Redpath said. “I think they're going to want to take a look at market dynamics going into next year.”