Rep. Josh Harder: Trade War With India Must End for Almond Industry

India is Top Export Destination for Almonds, Worth $650 Million Annually

News Release

Representative Josh Harder (CA-10) released the following statement after India imposed retaliatory tariffs up to 70 percent on American products, including almonds. Rep. Harder’s district is one of the largest producers of almonds in the country, and India is the top export destination for the product.

Josh Harder
Josh Harder

“This trade war has to end. The president is shooting from the hip on his trade policy and it’s Central Valley almond farmers that are left holding the bag. India is our top export partner and we just can’t afford to take this hit. I’m going to continue pushing the administration and the USDA to stop this devastating cycle of retaliatory tariffs. We need to be supporting our farmers, not cutting off our markets and depressing our economy.”

According to the United States Department of Agriculture (USDA), the United States exported over $650 million worth of almonds to India in 2018.

 

 

Almond Growers Helped In Trade Dispute

Almond Grower and Board Chair Holly King Attends White House Briefing with President

News Release

U.S. Secretary of Agriculture Sonny Perdue announced almonds will be included in the administration’s new trade mitigation package. This package aims to continue the support of farmers and ranchers impacted by delayed negotiations and trade disruption with China.

Almond Board Chair Holly A. King attended a briefing at the White House recently with President Donald J. Trump and representatives from other major farm groups to discuss the trade mitigation package.trade

“It is an honor to represent the California almond industry at the White House briefing with President Trump and express appreciation for his efforts to ease the burden of the trade tariffs on California almond growers,” King said. “We have invested heavily in developing the market for California almonds in China for more than 20 years and hope the Administration is successful in negotiating a new trade deal soon so we can get back to business as usual.”

The $16 billion package includes $14.5 billion for the Market Facilitation Program, $1.4 billion in surplus commodity purchases through the Food Purchase and Distribution Program and $100 million in Agricultural Trade Promotion funding. Almonds will be included in the Marketing Facilitation Program. According to the USDA release, “Tree nut producers, fresh sweet cherry producers, cranberry producers and fresh grape producers will receive a payment based on 2019 acres of production.”

The Almond Board has worked closely with the Almond Alliance of California throughout the developing tariff situation to ensure the voice of the California almond industry is heard.

“The Almond Board and Almond Alliance have been actively engaged with USDA, the US Trade Representative and Congress regarding the impact of this trade disruption on almonds. The Alliance has led efforts ensuring almonds are included in the second mitigation package,” said Julie Adams, Vice President of Global, Technical and Regulatory Affairs at the Almond Board. “We look forward to working with USDA in leveraging these funds to best benefit the entire almond industry and our grower communities.”

Overall, trade disputes have underscored the importance of having diverse, healthy export markets, a position of strength that the California almond industry has long enjoyed. For decades, ABC has supported the industry by making significant investments in foreign market development and expansion. Recently, the Almond Board started marketing programs in Italy, Mexico, Germany and re-entered Japan. ABC also ramped up marketing activity in Germany and India. 

“While we appreciate almonds’ inclusion in the second package, almonds continue to be impacted by the increase in tariffs, and we’ve seen a significant decline in shipments to China, our third-largest export market,” said Adams. “Getting back to normal trade is critical.”

Almond Export Diversification Helps During Tariff War

Overseas Markets are Vast for Almond Industry

By Patrick Cavanaugh, Editor

Diversification is a strength, Richard Waycott, president of the Almond Board of California, told California Ag Today recently. The Almond Board of California is a nonprofit organization that administers a grower enacted federal marketing order under the supervision of the U.S. Department of Agriculture. When it comes to any losses due to a tariff war in China, the almonds can be redirected to other countries.

“It’s fortunate to be as diversified as we are. Always a strength of this industry is the diversification of our overseas markets,” Waycott said. “I think whatever volume we ultimately do lose—if we do lose volume to China—can be redirected and absorbed by other markets.”

The USDA has opened up a direct payment program to the almond industry if growers were to lose any money in a tariff war.

As those programs were announced, by far the largest piece of the pie, $6 billion, initially was directed to the soybean and corn growers and livestock, while the specialty crops were completely left out of it.

“We got together with the Almond Alliance of California and some of our industry members made a very concerted effort while there was still time to do so before the rules around these programs and those that got to participate were set in stone and were able to convince the powers that be … to open up to the direct payment program to almonds, and the sweet cherry industry did the same,” Waycott explained

Waycott also commented on the epic frost that hit almonds this past spring. And he is not sure of the impact on the crop.

“We realized that we don’t understand the impact of frost on almonds all that well because we saw one side of the street there was quite a bit of damage, while on the other side there was no damage. So I think there’s mother nature at work here that, you know, we don’t necessarily completely understand,” Waycott said.

California Walnuts Face Threatening Tariffs

Big Challenges For the Walnut Industry

By Mikenzi Meyers, Associate Editor

It takes one glance at current news headlines to know that agriculture trade is a hot-button issue within the industry. Amongst countless exported crops being hindered by tariffs, the California walnut industry is no different. With California English walnuts making up two-thirds of the world’s trade, the California Walnut Commission is on high alert to ensure that growers are protected from tariffs that could damage their markets.

Pamela Graviet, the commission’s senior marketing director, spoke deeper on this issue.

Pam Graviet

“If you look at the three major markets—China, Turkey, and India—where we have tariff issues,” Graviet said, “that represents twenty percent of our total shipments … it’s over $300 million we’re going to lose.”

Thus far, the walnut industry has avoided paying the full tariff direct to China through the “gray market,” or the sales of walnuts through other countries that feed into China.

“But when you’re tariff constrained or in a trade war” Graviet explained, “they are also cracking down on those other routes, and the gray market has also suffered.”

The California Walnut Commission will continue their work to protect nearly 100 handlers and 4,800+ growers that make up the California walnut industry.

Calmer Minds Must Prevail for Trade Talks

California Growers in a World Market

By Patrick Cavanaugh, Editor

Paul Wenger, a Stanislaus County almond and walnut grower told California Ag Today recently  that California growers have often suffered with tariffs. “The proposed trade agreements such as TTIP and TPP along with NAFTA would have helped solve tariff problems,” he said. “But TTIP and TPP are gone.”

“The Trump administration may try to negotiate a bilateral agreement with other countries, and he seems to be working on NAFTA with Mexico,” noted Wenger, who is also the past president of the California Farm Bureau Federation.

At the end of the day, Wenger hopes that calmer minds will persevere and we’ll see these trade negotiations get done and we’ll move forward.

“Because we are in a world market,” Wenger explained. “As much as President Trump puts tariffs on steel and aluminum … saying that we’re going to bring back our rust belt, well, we’re not, because it’s not the market that has killed the steel industry, it has been the regulations. Our steel industry can’t produce at a level that people are willing to pay.”

There are a lot of crops that can only be grown in a Mediterranean climate. There are only five Mediterranean climates in the world; California is one of them and the largest producer of specialty crops.

The central part of Chile can produce a lot of the crops that we have today. But other than that, it’s the south tip of Australia and South Africa and the Mediterranean region itself.

“When you really think about who can produce, as long as we have the water, not only do we have to worry about marketing our product, we have to also fight for our water so we can produce those crops. And long-term, people are going to find a path to California for the crops that we grow here,” Wenger said.

Tariffs Causing Problems for U.S. Trade

Long-Term Problems May Be Ahead

By Jessica Theisman, Associate Editor

If a market is lost, it takes time to get it back. California Ag Today recently spoke with Brian Kuehl, executive director of Farmers for Free Trade, about the topic. A concern is that competitors are entering the markets that we currently occupy.

“No farmers invest huge amounts of time and energy trying to open markets or trying to develop trade relationships, and they’re being torn up in a matter of months,” Kuehl said.

Tariffs will cause long-term problems. One major issue is that when tariffs are established, other countries will begin put to put tariffs on our food. Those countries then begin to plant more crops to adjust. Soon, those countries become their own producers instead of relying on the U.S. Those countries then look to other countries that are more dependable, which in turn becomes a competitor to the United States.

The renewal of NAFTA will help.

“If this is not resolved soon, we certainly are doing lasting damage to agriculture. It could trigger the next farm crisis,” Kuehl said.

It looks like the U.S. is moving toward a deal with Mexico on a renewal of NAFTA.

“Hopefully that would quickly lead to a deal with Canada,” Kuehl explained. Mexico and Canada are our biggest trading partners.

For many of our products, China is one our largest trading partners, and certainly one of the ones that is growing the fastest in terms of population.

“We do not want to squeeze ourselves out of the Chinese market for a decade to come; that that would be a colossal error,” Kuehl said.

The U.S. has routed products in the past. Some countries including Vietnam and Hong Kong route products into China.

“There might be a tariff on product going into China directly, but we know some of our growers are able to avoid the product that tariff by selling first to Vietnam and then Vietnam shifts into China,” Kuehl said. That same tactic with Hong Kong is being shut down. China is getting much smarter at saying you can not circumvent our tariff, so we are going to hold you to these tariff rates.”

 

Increased Chinese Tariffs Could put California Producers in a Tight Spot

There is Fear China Could Turn to Other Countries For Ag Products

By Mikenzi Meyers, Associate Editor

The ongoing threat of Chinese tariffs on American agriculture has recently been the topic of conversation for agriculturalists. With China posing a possible 25 percent tariff on U.S. soybeans back in April, it seems this conversation is here to stay. The added tariff could drive Chinese buyers to choose other markets on many California commodities, including walnuts, tree fruit and beef.

Matt Lantz, vice president of global access for Bryant Christie Inc., deals with international trade, and these issues on a daily basis. Bryant Christie is an international affairs management firm that is based in Sacramento and Seattle, where they help U.S. commodity groups and agricultural companies with their international trade issues in order to export their products.

Lantz explained that this new threat is a major concern for California agriculture.

“China is an incredibly important market for California fruit and vegetable exploiters, and any tariff or increased inspection makes it more difficult to export,” he said.

Making matters worse, Lantz pointed out that buyers are going to turn to the countries without the tariff—which can be bad news for producers.

California Agriculture’s Future in the Hands of New Tariffs

There Is Worry that Some Companies May Lose Ground on Exports to China

By Mikenzie Meyers, Associate Editor

California growers are on edge due to newly imposed tariffs that could cause the state’s agriculture to suffer. After China recently retaliated against the United States’s steel and aluminum tariff by pushing its own on U.S. imports, they have good reason to be worried. California Ag Today recently spoke to Shannon Douglass, first vice president of the California Farm Bureau Federation, who is heavily involved in this conversation.tariffs

“No matter what you’re growing, so much of our products are exported, and so it’s a really vital concern to many of our farmers,” Douglass said.

She explained that it isn’t just a concern for those involved with fresh produce—which might be the first affected—but also any farmer who depends on sales to foreign markets.

One of the biggest concerns is losing the progress made in growing the foreign market, but Douglass seemed hopeful as CFBF has continued working with those driving legislation,

“We certainly don’t want to lose that ground that we worked so hard to develop,” she said.

Agriculture has always been a winner in the trade arena, and although the climate of foreign markets may be uneasy, Douglass and the California Farm Bureau Federation are continuing the conversation to make progress toward a hopeful future for all farmers.

Chinese Customers Hurt with Increased Tariff

Not Just California Farmers Hurt with Added Trade Tariff

By Patrick Cavanaugh, Editor

The extra tariff that China is putting on California agricultural products is an added frustration for the customers in China, said Jamie Johansson, President of the California Farm Bureau Federation.

“It’s not just the extra 15 percent being levied by that country. But for our nut crops and wine guys, we already have 15 or 20 percent tariffs,” Johansson explained. “This is nothing new to us in California. California agricultural products excel in the Pacific Rim. We know we can compete with anyone in a global market. We know that no one’s better than the California farmer in terms of serving the Pacific Rim nations, and no one can get their product to the market faster in those Asian countries than California.”

Jamie Johansson, CFBF

Customers are affected the most when tariffs are implemented.

“I say when we have these trade talks and trade negotiations—and even now China [is] threatening the trade tariffs or has current tariffs on California products—it isn’t just the farmers that suffer,” Johansson said.

“We need to remind China that it is their consumers who are demanding our quality milk, our cheeses, our wine, pistachios, and almonds as well. Their consumers will suffer just like the California farmer. And we need to remind them of that because we only sell to the countries with consumers who demand it, and that’s who decides what we grow and where we ship to,” Johansson said.

International Trade Tariffs Must Be Lowered

For California Ag Especially, International Trade Tariffs Must Be Lowered

 

By Laurie Greene, Editor, CaliforniaAgToday.com

USDA Foreign Agriculture Service Associate Administrator Janet Nuzum recently met with agricultural commodity representatives at the California Center for International Trade Development (CITD) in Fresno.

Nuzum spoke about both the opportunities California agricultural groups face as well as key problems they encounter in international trade. She said, “The strength of California agriculture can sometimes appear to be its weakness, in this sense: California is, of course, the largest agricultural state in the United States. It’s also incredibly diverse compared to other parts of the United States. And, because of that diversity, it faces a wider variety of challenges and problems in global trading.

“If there were less diversity, there might be fewer problems,” said Nuzum. “But, with greater presence in the marketplace, having a wider diversity of products or types of products, and whether their product is fresh or processed, California growers and exporters and government officials and regulators face a very challenging set of circumstances, particularly with international trade tariffs.”

Nuzum said that is both the good news and challenging news—all in one. “You’ve got a rich agricultural economy,” she elaborated, and you’ve got a lot of natural resources which are not necessarily found in other parts of the United States. This enables the industry to offer a very rich plate of different kinds of agricultural products. There are some products, and I am thinking about tree nuts now, in which California represents the majority of world production or world trade. So, other consumers around the world are dependent on having that American product, that Californian product, out there in the marketplace,” she said.

Nuzum said because California’s diverse produce is exported around the world, international trade discussions need to come to fruition to lower foreign trade barriers. “Our tariffs, both agricultural and non-agricultural, are much lower than other countries we trade with. That is one reason it is so important to negotiate these trade agreements—to reduce these other tariffs to zero, or at least to our levels,” she said.

(Photo credit: The Busy Port of Oakland, Flickr)