New NAFTA could affect USDA aid payments

New NAFTA could affect USDA aid payments
Oct 11, 2018

The USDA authorized up to US$12 billion to help offset tariff implications

By Diego Flammini
Staff Writer

A new trilateral trade deal could mean U.S. farmers receive less financial aid from the USDA than originally thought.

The federal department of ag authorized up to US$12 billion in funding to help American farmers offset the economic effects of trade tariffs on U.S. agriculture.

The federal government distributed about US$25.8 million to American producers as of Sept. 21, the Washington Post reported. But future payments may be changed due to the new NAFTA agreement, known as the U.S.-Mexico-Canada Agreement (USMCA).

“If the tariffs do come off and tariff impact lessens, it will have some impact over the mitigation efforts because mitigation efforts were based on the fact that they would be tariff damage related,” Agriculture Secretary Sonny Perdue said to Reuters on Tuesday.

Any change in compensation could hit soybean producers the hardest.

The USDA allocated almost US$4 billion in direct payments for soybean growers. The payments are calculated at US$1.65 per bushel.

China and the U.S. remain in a trade war in which American soybeans are caught. Since the USMCA doesn’t include a large soybean component, receiving less than what the USDA originally promised could be challenging for farmers.

“That’s not something I wanted to hear,” John Heisdorffer, president of the American Soybean Association, told today. “The USMCA will not increase the sales of soybeans to Mexico and Canada, and markets are expected to be down again today.

“I would think that most farmers are looking forward to that other half of the payments expected this winter.” has reached out to the USDA for details on which commodity payments could be affected by the new NAFTA agreement.

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