California farmers skeptical about Trump farm aid

China trade tensions worry US farmers

The U.S. hiked tariffs on Chinese imports and Beijing said it will counterattack in a trade dispute between the world's two largest economies. U.S. farmers worry tariffs will rob them of profits and reduce their ability to compete in the pork market.
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The U.S. hiked tariffs on Chinese imports and Beijing said it will counterattack in a trade dispute between the world's two largest economies. U.S. farmers worry tariffs will rob them of profits and reduce their ability to compete in the pork market.

The Trump administration on Tuesday announced up to $12 billion in assistance for American farmers hurt by rising foreign tariffs, but it remains unclear how much of it will benefit California’s largest agricultural exports, which include several kinds of tree nuts, wine, table grapes and dairy products.

And industry leaders say it’s unlikely to calm nerves among growers and processors across the Golden State, who are beginning to see prices for their products sink as tariffs cause a drop in demand abroad.

The tariffs are a byproduct of the president’s escalating trade conflicts with China, Canada, Mexico, the European Union and others.

China has targeted a number of California’s top export crops in retaliation for two waves of tariffs the Trump administration announced earlier this year. The latest set of Chinese tariffs, which went into effect earlier this month, ratcheted up duties on almonds, walnuts, cherries, grapes and other fruit to 50 percent or more. Europe, Mexico, Canada, India and Turkey — all top export markets for various types of California produce and/or dairy products — have also enacted new tariffs on U.S. exports in the last month, a response to increased U.S. duties on steel and aluminum.

Dennis Nuxoll, vice president of federal government affairs at the Western Growers Association, said it’s hard to generalize about the impact of tariffs, given that different crops are on different seasonal cycles. “But at least anecdotally, we are hearing that prices are softening in the summer, in the lead up to fall,” he said.

California Farm Bureau Federation President Jamie Johansson expressed hope in a statement Tuesday afternoon that the new assistance from the U.S. Department of Agriculture “will provide some immediate relief to farmers and ranchers affected by trade disputes,” But the bureau said resolving the trade dispute “remains urgent.”

“We will continue to urge the administration and our congressional delegation to resolve the trade disputes as quickly as possible,” added Johansson.

U.S. Agriculture Secretary Sonny Perdue sought to reassure farmers Tuesday that the administration views the assistance to farmers as “a short-term solution.” The aid programs, which include direct payments to growers and purchases of surplus goods, will “allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy,” Perdue said in a statement.

According to the U.S.D.A., the agency will offer three different kinds of assistance. For soybean, sorghum, corn, wheat, cotton, dairy, and hog farmers, the federal government will offer direct payments via its Market Facilitation Program. California growers will primarily benefit from a Purchase and Distribution Program that will buy “unexpected surplus” of fruit, nut, rice and legume crops, as well as beef, pork and milk. A third program to assist growers in developing other export markets will be open to all commodities and farm products.

The assistance is expected to be available in September. Many details remain to be sorted out.

Nuxoll said that a purchasing program for fruit and nuts would potentially help the fresh produce growers that his association represents in California and other Western states. It will depend, however, on just how the program is implemented.

“A lot of the purchasing programs now wait until prices have bottomed out before they start intervening,” said Nuxoll. However, that won’t help replace purchases from China and India, where California produce commands a premium price, he said.

Others are concerned that most of the assistance funding will ultimately be directed to soybean, sorghum and pork farmers in the Midwest, home to many of President Trump’s political supporters, leaving just a small slice for California’s agriculture products.

California’s farmers and ranchers typically don’t benefit much from federal aid programs said Peterangelo Vallis, executive director of the Fresno-based San Joaquin Valley Winegrowers Association. “If you’re going to subsidize any farmer it’s going to be in the Midwest because they have more senators,” Vallis said, alluding to the political clout Republican senators from Kansas, Nebraska, Iowa and elsewhere wield in Washington.

Indeed, most of the pushback on the current round of trade disputes have focused on how they hurt soybean farmers in Iowa and hog farmers in Illinois.

But Nuxoll says Western produce and nut growers have also been making their voices heard in Washington. “Obviously we prefer exports, we prefer trade not aid,” he said. “But if aid is going to be given, we want our appropriate share. And I think we will get it.”

This story has been updated to correct the spelling of Dennis Nuxoll’s last name.