White House to delay aid payments on hopes of China trade resolution

Anna-Lisa Laca
Farm Journal
Trade is always a contentious issue between the world's two largest economies, the US and China.

Despite previous reports that USDA would issue a second round of Market Facilitation Program (MFP) payments this week, Reuters is reporting the White House Office of Management and Budget (OMB) is delaying the payments until further notice.

According to Reuters, OMB is holding up approval of the payments due to concern about the cost of the program in hopes that trade issues will China will be resolved quickly.

“It has been no secret that OMB has not been terribly excited about the trade aid package,” a source familiar with the matter told Reuters.

It’s also no secret that USDA has been in negotiations with OMB for weeks. The Office of Management and Budget is tasked with making sure the cost of what the government projects it will spend to the best of its ability is kept in check, Tyson Redpath, senior vice president of The Russell Group explained to AgriTalk Radio Show’s host Chip Flory last week.

“I think there is also a realization that before this second round of trade aid and trade relief payments go out, they want to look at the full spectrum of what the future likely holds, at least in the first quarter of next year for ag exports into China,” Redpath said in regard to the payment negotiation.

Following the news of the trade truce with China, Secretary Perdue was quick to reassure farmers that payments would still be happening.

"From my perspective, nothing has changed from the tariff damage that farmers experience," Perdue said.

It appears the White House does not agree. Reuters’ sources said the White House was delaying its approval mainly on hopes China will soon resume purchases of soybeans.

Still USDA remains optimistic a payment will be issued before the end of the year.

"Secretary Perdue was clear last week that we are in final stages of confirming our commitment to American farmers," USDA spokesman Tim Murtaugh told AgWeb in a statement on Tuesday. "We are in discussions with the White House and anticipate that the second payment rates for the Market Facilitation Program will be published before the end of the year." 

“Reprinted by permission of Farm Journal media, December 2018”