California seeks appropriate share of tariff assistance


Issue Date: August 8, 2018
By Ching Lee

As the U.S. Department of Agriculture writes rules for how it will distribute $12 billion in assistance funding to farmers negatively affected by international trade disputes, California agricultural leaders are working to ensure farmers who grow specialty crops receive a fair share of the one-time aid package.

USDA unveiled last month a three-part plan aimed at helping farmers weather some of the impacts from retaliatory tariffs that other nations have imposed on U.S. agricultural products, including specialty crops such as fruits, vegetables, nuts and wine. The aid package includes direct payments to some farmers, government purchases of surplus crops and a trade promotion program.

Most of the $12 billion will be in the form of direct payments, although USDA said the payments would be available only to producers of commodities such as corn, soybeans, wheat, cotton, dairy, hogs and sorghum.

USDA said it plans to provide opportunity for comments on the plan this month and expects to roll out the assistance programs around Labor Day.

Sara Neagu-Reed, legislative associate in the California Farm Bureau Federation Federal Policy Department, noted that California farmers and ranchers produce a wide variety of crops that will be affected differently by retaliatory tariffs.

"To offset the impact of the tariffs, the bonus purchase program would need to approximate the volume of crops not being exported," Neagu-Reed said. "The timing of those bonus purchases would also need to be taken into consideration."

Farmers say what they want most is resolution to the trade disputes and access to markets, not government aid. But those whose crops are affected by the tariffs say they have seen lost export sales and lower market prices that could threaten their economic livelihood. Those who grow specialty crops such as fruits and vegetables have been particularly vulnerable, because of the perishable nature of those crops and the need to find alternative markets right away.

Hearing their concerns, several California lawmakers have urged the Trump administration to give the state's specialty-crop growers the same consideration as other farmers whose commodities are harmed by retaliatory tariffs. In a bipartisan letter last week to U.S. Agriculture Secretary Sonny Perdue, Reps. Jeff Denham, Jim Costa, Devin Nunes, David Valadao and six other Republican and Democratic congressional leaders said specialty-crop farmers should receive a share of the assistance funding.

"We share their concerns about solely relying on a food purchase and distribution program for these extremely diverse and high-value commodities such as tree nuts, citrus, leafy greens, berries, stone fruit and potatoes," they wrote. "Additionally, any program that is focused on direct payments should be constructed in a way that can also work for the growers of these types of commodities."

The letter follows a similar one sent last month by California Sens. Dianne Feinstein and Kamala Harris that also pressed the administration to give the state's farmers "support commensurate with the damage inflicted" by the tariffs. The senators pointed out that many of the state's top farm exports to China have been hit with duties as high as 65 percent.

Meanwhile, China threatened new retaliatory tariffs last week on $60 billion of U.S. goods, including agricultural products. The duties would range in rate from 5 to 25 percent.

China first implemented additional 15 percent tariffs in April on $3 billion worth of U.S. products—including nuts, fruits and wine—in response to U.S. tariffs on steel and aluminum products. In July, China imposed a second round of 25 percent tariffs on $34 billion of U.S. goods, including many of the same specialty crops targeted in the first round.

At the same time, Canada, Mexico, India and the European Union implemented their own retaliatory tariffs, though those tariffs did not affect nearly as many specialty crops.

Almond shipments to China and Hong Kong fell 47.5 percent in volume during June compared to the same time last year, according to Los Angeles-based Beacon Economics, which analyzes the state's international trade activity. The value of California wine exports to world markets declined 15.5 percent, while cherry exports were off by 35.7 percent.

Total California exports of agricultural products and other raw materials slipped by 1.7 percent to $1.74 billion in June, compared to June 2017.

For the second quarter of the year, the report said, exports of California agricultural commodities declined 7 percent, "as shipments of fruits, nuts, wines and dairy products faced higher tariffs abroad."

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.