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Monday, October 24, 2011

Trade Adjustment Assistance for Farmers

Remy Jurenas
Specialist in Agricultural Policy

The Trade Adjustment Assistance for Farmers (TAAF) program provides technical assistance and cash benefits to producers of agricultural commodities and fishermen who experience adverse economic impacts caused by increased imports. Congress first authorized this program in 2002, and made significant changes to it in the 2009 economic stimulus package (P.L. 111-5). The 2009 revisions were intended to make it easier for commodity producers and fishermen to qualify for program benefits. It also provided over $200 million in funding through year-end 2010. The 2010 omnibus trade measure (P.L. 111-344) temporarily extended the program through February 12, 2011, and authorized an additional $10.4 million.

The U.S. Department of Agriculture (USDA) is required to follow a two-step process in administering TAAF program benefits. First, a group of producers must be certified eligible to apply. Second, a producer in a certified group must meet specified requirements to be approved to receive technical assistance and cash payments.

To be certified, a group must show that imports were a significant cause for at least a 15% decline in one of the following factors: the price of the commodity, the quantity of the commodity produced, or the production value of the commodity.

Once a producer group is certified, an individual producer within that group must meet three requirements to be approved for program benefits. These include technical assistance with a training component, and financial assistance. A producer must show that (1) the commodity was produced in the current and also in one recent previous year; (2) the quantity of the commodity produced decreased compared to that in a previous year, or the price received for the commodity decreased compared to a preceding three-year average price; and (3) no benefits were received under any other trade adjustment assistance program. The training component is intended to help the producer become more competitive in producing the same or another commodity. Financial assistance (capped at $12,000 over a three-year period) is to be used by the producer to develop and implement a business adjustment plan designed to address the impact of import competition.

Since 2009, USDA has certified 10 of the 30 petitions filed by commodity groups and fishermen (e.g., producers of shrimp, catfish, asparagus, lobster, and wild blueberries). In FY2010, USDA approved about 4,500 agricultural producers who applied for training and cash assistance under three certifications. Under the seven FY2011 certified petitions, USDA approved about 5,700 producers. Program benefits in both years are expected to mostly flow to shrimp producers.

Because funding for all TAA programs expired on February 12, 2011, the 112th Congress continues to consider proposals for their future. A mid-February effort in the House to temporarily extend TAA authorities through mid-year 2011 become caught up in criticism of their rationale and calls by some Members to link a TAA extension to the Obama Administration committing to a timetable to submit the three pending free trade agreements (FTAs) to Congress for a vote. The Senate on September 22, 2011, approved an amendment to H.R. 2832 to reauthorize most TAA programs. Its language reflected the compromise worked out earlier between the House and Senate committee chairmen with jurisdiction on trade matters and the White House. The House is expected to consider this bill once a process to take up the FTAs is agreed upon with the White House. Among the compromise’s provisions, the TAA for Farmers program would be extended through December 2013 and be funded at an annual level of $90 million.

Date of Report: September 30, 2011
Number of Pages: 14
Order Number: R40206
Price: $29.95

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