When it became obvious in mid-May that President Trump was instructing the U.S. Department of Agriculture (USDA) to provide another trade aid package to U.S. producers for the 2019 crop year, the U.S. Canola Association (USCA) and Northern Canola Growers Association (NCGA) again called upon U.S. Secretary of Agriculture Sonny Perdue, USDA staff and members of Congress to include canola in the Market Facilitation Program. Concern that the suddenly announced program would affect planting decisions if the aid was not provided to all competing crops was explained to CNBC by USCA Producer Director Ryan Pederson: “I need to be making my cropping practices on what’s best for the land, what’s best for our long-term rotation.” Canola prices have declined in lock-step with soybeans and suffered even greater price and demand destruction due to the blockage of Canadian canola imports into China, noted the NCGA. Advocacy turned into action on May 23, when the USDA announced commodities left out of trade aid last year will be included this year to prevent planting and market distortions. USCA and NCGA representatives met with the USDA on May 30 to provide further data about the relationship between canola and soybean price declines and to urge the USDA to provide equitable loss payments for all crops.
The USDA will provide up to $16 billion in programs for the trade aid, which correlates to the estimated impact of unjustified retaliatory tariffs on U.S. agricultural goods and other trade disruptions, according to a May 23 USDA press release. These programs will assist farmers while Trump works to address long-standing market access barriers. Market Facilitation Program payments will be based on a single county rate multiplied by a farm’s total plantings to those crops in aggregate in 2019. Per acre payments are not dependent on which crops are planted in 2019. Total payment-eligible plantings cannot exceed those of 2018. Payments will be in three tranches, with the first starting as soon as practical after the Farm Service Agency crop report is completed by July 15 and subsequent tranches in November and early January pending market conditions and trade opportunities.
The NCGA also advocated U.S. Trade Representative Robert Lighthizer and North Dakota leaders for canola oil to be granted the same tariff reductions as Canada obtained last December under the Comprehensive & Progressive Agreement for Trans-Pacific Partnership (CPTPP). This would result in the ability of U.S. canola crushing plants to sell canola oil into Japan tariff-free by 2023. The United States is not a member of the CPTPP and Japan is one of half of the CPTPP members with which the U.S. does not have its own free trade agreement.
The American Farm Bureau Foundation (AFBF) calls for prompt passage of the Biodiesel Tax Credit Extension Act of 2019, which has been in limbo for more than a year. “In many rural areas of the country, production facilities are a driving force in local economies that provide employment opportunities and broaden the local tax base,” wrote AFBF President Zippy Duvall in a letter to House members. “In addition, all citizens, including farmers who are large fuel consumers, benefit when our nation reduces its dependence on unpredictable international oil markets.” The USCA also strongly supports Congress passing bill H.R. 2089.
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