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Farm Financial Management

Trade Adjustment Assistance Program

The Trade Adjustment Assistance (TAA) Program helps producers, including aquaculturists, adjust to import competition. Producers of all raw agricultural products are potentially eligible for the program. For a farmer or fisherman to become eligible for benefits, he or she must complete a two-step application process. Three or more farmers or fishermen, not family related, or a bona fide agricultural group or fishing group that represents producers or fishermen may petition to have a commodity or fish species declared eligible for the program.

Petitioners must document that all three of these circumstances occurred:

  • The current market year price of the commodity or fish species must be 80 percent or less of the previous 5-year average price of that commodity or fish species.
  • Imports of the commodity (or fish species) or “like-commodities” must have increased in the previous year.
  • It must be shown that the imports in question contributed importantly to the price decline.

Obtaining Program Benefits

Once a commodity is certified as being eligible for the Trade Adjustment Assistance (TAA) program, the producers of that commodity residing in the state(s) covered by the successful petition may apply for benefits. There are a number of benefits. The first is technical information and advice as to how a producer or fisherman might be able to adjust to competition from imports. The second is a cash payment, not to exceed $10,000 in any given year. A third benefit is that farmers, fishermen, and crewmen not previously eligible for the Department of Labor TAA program, are now eligible if they meet all the tests to receive cash benefits under the USDA TAA program.

What Agencies Are Involved?

The TAA program is administered by the USDA Foreign Agricultural Service (FAS), the executive agency for the program. However, other USDA agencies have major responsibilities. The Economic Research Service (ERS) provides a marketing review of all petitions forwarded to them by the FAS. The Farm Service Agency (FSA) provides a number of services. First, it provides the petition application forms and an electronic means by which petitions may be submitted. Second, the FSA receives the applications for benefits by farmers and fishermen. And third, once all certifications are completed by individual farmers and fishermen, the FSA will issue benefit checks.

NIFA Responsibilities

NIFA plays a major role in the TAA program. The legislation states that, prior to receiving any benefits, a farmer (fisherman) must receive from an Extension Service agent or employee technical information and advice as to how he or she might be able to mitigate or adjust to competition from imports. The legislation also makes clear that, once a commodity or fish species has been declared eligible for the program, all producers of that commodity, or all fishermen (boat permit holders as well as crewmen who share in the catch as their payment) of the fish species must be notified of benefits under the program and will receive, upon request, any assistance in applying for benefits. While NIFA is not responsible for this requirement, it coordinates and assists as it can with the FAS and the FSA to help ensure that producers receive the information they need.

Who Is Eligible for Trade Adjustment Assistance?

Any producer or fisherman is eligible for TAA benefits once a petition has been certified and if:

  • The producer is an owner, operator, landlord, tenant, or sharecropper who shares in the risk of producing the eligible commodity and who is entitled to share in the crop available for marketing from the farm; or the fisherman is a qualified fisherman (permit holder, crewman sharing in the catch as payment for services rendered, etc.).
  • The producer produces a raw agricultural commodity, including livestock, fish, and aquacultural products.

Who Is Not Eligible?

Those who may not be eligible are those who process the commodity in question, excluding cleaning, grading, coating, sorting, trimming, mixing, conditional, drying, dehulling, shelling, chilling, cooling, blanching, irradiating, or fumigating. Those whose farm or fishery is located outside the producing/catching area covered by the certified petition also are not eligible.

Producer/Fisherman Application Period

Once a commodity has been certified as eligible by the FAS in the Federal Register or through an official USDA news release, producers and fishermen covered by the petition have 90 days in which to apply for benefits. Also, eligible producers and fishermen are immediately eligible to receive technical information and advice from the Extension Service. As a courtesy and convenience to the producers and fishermen who receive the technical information and advice, the Extension Service will provide a “Certificate of Training” to help the fisherman and producer provide evidence that he or she has received the required training. Producers and fishermen should apply for benefits at the local county FSA Office or the office that ordinarily provides FSA services to the individual applicant.

How Much Is the Maximum Benefit?

In addition to the technical information and advice that producers or fishermen can receive at no cost to themselves, they may also receive up to $10,000 per year in cash benefits. However, ordinarily, most will receive far less than the maximum. The amount due is equal to the product of the amount of the agricultural commodity produced (or fish species caught) in the most recent marketing year multiplied by one-half the difference between (1) an amount equal to 80 percent of the average of the national average prices of the agricultural commodity or fish species covered by the petition for the five marketing years preceding the most recent marketing year and (2) the national average price of the agricultural commodity (or fish species) for the most recent marketing year.

How Does NIFA Meet Its Responsibilities for the TAA Program?

NIFA uses the four Regional Risk Management Education Centers and the supporting Risk Management Digital Center at the University of Minnesota to oversee and coordinate the development and delivery of technical information and advisory packages. When a commodity is declared eligible by the FAS, ordinarily the Regional Risk Management Education Center located in the region with the largest number of states and eligible producers will be assigned the responsibility for developing and delivering the technical information and advisory package. For example, in November 2003, catfish were certified as eligible by FAS. While there are catfish producers in 18 states representing three of the four regions, because most of the catfish production takes place in four southern states, the Southern Regional Risk Management Education Center is responsible for developing and delivering the technical information and advice. The Southern Center is also coordinating with the other two affected regions on how to inform their catfish producers of the technical information and advice. Similarly, the Western Center for Risk Management Education was responsible for developing the technical information packages for both Alaska and Washington salmon. These two are coordinating with all the other regional risk management centers for fishermen holding salmon permits from the state of Alaska, who reside in 41 states.

What Happens When the FAS Certifies a Commodity or Fish Species as Eligible? 

Immediately upon publication in the Federal Register or through the issuance of a USDA press release, FAS will inform NIFA that a commodity has been certified and approved for the TAA program. Once that has occurred, the NIFA national program leader responsible for the TAA program will contact all the Risk Management Education Center directors and assign responsibility to one of the centers to develop and deliver pertinent information on adjusting to import competition. The center that receives this responsibility is based on the number of states and producers within each of the regions, and the one with the largest number in each category is assigned the responsibility.

What Do the Regional Risk Management Education Centers Do Regarding the TAA Program?

The final rule governing the TAA program requires that NIFA have prepared and ready for delivery the technical information and advisory package within 45 days of a commodity being certified as eligible. To achieve this, each Risk Management Education Center director has identified in each state a TAA contact person, most often a farm management extension specialist who has broad knowledge of the talents and expertise of professionals throughout the region, or elsewhere, as the case may be.

Putting Together the Curriculum Development Team 

Once a commodity is certified, the states in which producers are eligible are identified, the farm management TAA contact is reached, experts on the commodity in question are identified, and a curriculum development team is put together to develop the technical information and advisory package. The responsible Regional Risk Management Education Center director works with the team to ensure that time lines are met and that the appropriate format is being used in developing the technical information and advisory package. All costs associated with the development and delivery of these technical information packages are reimbursed.

How Does the Risk Management Digital Center Support the TAA Program?

The law provides that commodities and fish species that meet the criteria for eligibility in subsequent years may be re-certified as eligible in succeeding years. As a result of this provision, NIFA deems it to be in the best interests of the USDA, taxpayers, producers, and fishermen to develop the means by which the technical information and advisory packages could be prepared in a consistent format, regardless of commodity or fish species, and placed on the Internet for interested professionals, producers, and fishermen. Such a system would enable expeditious updating in those instances where a commodity is recertified in subsequent years. To serve this purpose, a cooperative agreement with the Risk Management Digital Center at the University of Minnesota was developed. All technical information and advisory packages prepared under the responsibilities of the NIFA TAA program are developed in a consistent format, regardless of commodity or fish species. All such packages are archived and available to interested parties.

 

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