With unsettled trade dispute between China and the United States, the US government announced support schemes. United States’ agricultural commodity producers will receive support to offset price imbalances due to the retaliatory tariffs imposed by China. Termed as Market Facilitation Program (MFP), support will be provided to commodities that include cotton, corn, soybean, dairy, etc. Earlier in Spring, Unites States’ government-imposed import tariffs of many goods from China to protect American manufacturing and innovation.
Export crops such as cotton and soybeans were negatively affected due to price increases due to imposed tariffs and made them uncompetitive against other exporting nations to China. To help farmers withstand the tariff situation, United States Agriculture Secretary announced support schemes, which have been a welcoming situation among the farm community.
“Cotton producers prefer to participate in a fair and equitable marketplace,†says Steve Verett, Executive Vice President of Lubbock-based Plains Cotton Growers, Inc. “Unfortunately, the current market environment is being heavily influenced by unsettled trade issues that have detrimentally impacted our ability to fairly compete in markets that have consistently been strong purchasers of US cotton. This situation has adversely impacted cotton demand and price and we are grateful for the assistance announced by USDA to offset at least some of that impact through the Market Facilitation Program."
Cotton producers will receive a support of 6-cents per pound based on certified production. Initially, producers will receive support for 50 per cent of their 2018 production. Additionally, the support is capped at $125,000 per person or entity. According to a source, farmers hope to see their checks coming at the beginning of the new year.
By: Seshadri Ramkumar, Texas Tech University, USA