Trade aid meets the spending season
Story Date: 9/10/2018

 

Source: POLITICO'S MORNING AGRICULTURE, 9/7/18

The Trump administration has asked Congress to include language in any upcoming continuing resolution that would ensure the Commodity Credit Corporation — the agency facilitating a key part of USDA's trade assistance program — has flexibility to keep payments flowing to farmers in the coming months, according to GOP sources.

Here's how it works: The CCC can borrow up to $30 billion from Treasury to finance its programs, including the $4.7 billion in direct payments USDA is set to provide soybean, corn, wheat, cotton, sorghum, dairy and pork producers hurt by retaliatory tariffs. With another round of payments potentially to come, along with other annual CCC obligations, the White House is warning the agency could breach its credit limit at Treasury in the next few months — meaning all payments to farmers and ranchers would be frozen.

Congress typically pays down the agency's tab through the annual Agriculture-FDA spending bill, but it's an open question whether that measure will be signed into law on time this year. That's why the administration wants a CR provision to accelerate reimbursement of CCC in case the stopgap funding process stretches into December and beyond, as it often does.

CCC's role in the trade relief plan goes beyond the direct payments to producers, but it's unclear how much other aspects of the plan, like market development or commodity purchases, contribute to or could be exposed to the agency's financial strain.

One more thing to note: It's not clear how directly the request is tied to the new tariff relief package, but the same language has been used at least once before, in 2016, when CCC also faced financial strain.

























   Copyright © 2007 North Carolina Agribusiness Council, Inc. All Rights Reserved.
   All use of this Website is subject to our
Terms of Use Agreement and our Privacy Policy.