US cotton farms could benefit from financial assistance if they have suffered damage due to unjustified trade retaliation by foreign nations under a new trade mitigation package launched by the government. 

Announced this week by US Secretary of Agriculture Sonny Perdue, producers of certain commodities, including cotton, can now sign up for the Market Facilitation Program (MFP). Additionally, the USDA has begun accepting proposals for the Agricultural Trade Promotion Program (ATP), which will help US farmers find and access new markets for their products. 

In total, the Department will authorise up to US$12bn in programmes, consistent with World Trade Organization (WTO) obligations. 

The move follows an announcement by Perdue in July that the USDA would act to aid farmers in response to trade damage from unjustified retaliation. President Trump directed him 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 to help American farmers compete globally.  These programmes aim to assist agricultural producers to meet some of the costs of disrupted markets.

“These programs will allow President Trump time to strike long-term trade deals to benefit our entire economy, including the agricultural sector, in the long run,” Perdue said. “Farmers will tell you that they would always prefer to sell a good crop at a fair price, rather than receive government aid, and that’s what long-term trade deals will accomplish.  But in the meantime, President Trump has promised that he will not allow American agriculture to bear the brunt of the unjustified retaliation from foreign nations.  Today we are putting the President’s promise into action.”

Specifically, USDA’s Farm Service Agency (FSA) will administer the Market Facilitation Program (MFP) to provide payments to corn, cotton, dairy, hog, sorghum, soybean, and wheat producers. An announcement about further payments will be made in the coming months, if warranted. 

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And through the Foreign Agricultural Service’s (FAS) Agricultural Trade Promotion Program (ATP), $200m will be made available to develop foreign markets for US agricultural products. The programme will help US agricultural exporters identify and access new markets and help mitigate the adverse effects of other countries’ restrictions.

The sign-up period for MFP is now open and runs through 15 January 2019.

A payment will be issued on 50% of the producer’s total production, multiplied by the MFP rate for a specific commodity.  A second payment period, if warranted, will be determined by the USDA. Payments are limited to a combined $125,000 for corn, cotton, sorghum, soybeans, and wheat capped per person or legal entity.