Californian farmers worry about future loss amid US-China trade dispute

LOS ANGELES - There's a palpable fear in California that the ongoing trade dispute between China and the United States could bring major losses to farmers here. "No shipments to China have been canceled yet, but, the new crop will be coming in August and if this disagreement isn't settled by then, it will have more impact on the new crop." Dave Phippen, a key member of the Almond Board of California, told Xinhua on Wednesday.

Steep duties

California grows 80 percent of the almonds consumed by the entire world, and the Golden State was responsible for all US almond exports in 2015 and 2016, according to data provided by California Department of Agriculture and Food (CDAF),

Phippen agreed that California's almonds have dominated the import markets of China and even the world, but the co-owner of Travaille and Phippen, Inc, which has 1600 acres of almond orchards and a 70-worker processing plant, said that, facing the trade disputes between the United States and China, the industry practitioners "can not say we do not worry at all."

The Chinese mainland and Hong Kong were the destination for 12 percent of the US almond exports, reaching a farm gate value of $518.1 million, said the CDAF.

According to calculation of the Farmers for Free Trade, a bipartisan campaign to rebuild support for trade at the grassroots level, California's almond exports to China amounted to $184 million in 2017, and after China announced early this month a tariff on American agricultural goods including almonds in response to US duties on imported steel and aluminum in March, US almonds exported to China could see $28 million in potential additional duties.

Another US commodity that could be hit by the trade dispute is pistachios, which could see $99 million in potential additional duties

In the most recent shipping season, Chinese mainland and Hong Kong were the destination for 55 percent of the US pistachio exports, which were worth $660 million and were mostly from the states of California and Arizona.

Overall, the volume of Californian products directly shipped to China is low, said a report published last week by Rabobank, a Netherlands-based food and agriculture financing and sustainability-oriented banking. About 4 percent of US fruit and nut exports and 2 percent of vegetable exports go to the Asian nation.

But the potential loss of future income as the Chinese economy continues to grow is what really worries many Californian farmers.

Hurting US farmers

The Farmers for Free Trade on Tuesday released a report named "Farmers pay the price: steel & aluminum retaliation," which concluded that in a trade dispute, "American farmers are the first casualty," saying it will "incentivize trading partners like China to look to other markets for their imports. That means that trading relationships that took decades to develop can evaporate overnight."

"And as many farmers and trade experts know, once you lose an export market it doesn't come back immediately. In fact, it often takes many years for trading relationships to recover," said the report.

The Farmers for Free Trade and the California Farm Bureau hosted an event Thursday in Sacramento, which gathered farmers from across California and Secretary of the CDFA Karen Ross, to highlight the negative impacts of China's tariffs on California exports.

Ross tweeted after the event, "Thank you Farmers for Free Trade and Farm Bureau for sponsoring an event to get the word out about the importance of international trade."

The Almond Board of California has been expanding its business in China for over 20 years, spending more than $7 million in teaching chefs how the nut can be used as a food ingredient and developing among consumers a taste for almonds.

"We've seen years of steady growth and we don't want to lose the great opportunity," Emily Fleischmann, senior director of global marketing for the group told Xinhua.

Daniel Sumner, who leads the University of California-Davis' Agricultural Issues Center, expressed similar concerns, saying if the US-China trade standoff lasts too long, California exports could suffer long-term damage as the state will lose its reputation as a reliable source of agricultural products and end up benefiting US competitors.

"Many in the nut industry and the fruit industry have put a lot of resources, time and efforts into providing information about the commodity and developing the market," said Matt McInerney, Western Growers' senior executive vice president. "They've done their diligence in going to China to promote it."

Founded in 1926, the Western Growers is an organization representing local and regional family farmers growing fresh produce in Arizona, California, Colorado and New Mexico. The group claims that members and their workers provide over half the nation's fresh fruits, vegetables and tree nuts.

Efforts like the Almond Board's have given California a reputation "a reliable supplier of healthy products," which "is crucial," Sumner told the Western Farm Press this week, adding that the Golden State's commodities could lose their sterling reputation "through no fault of their own."

"It could take a while for California to regain customers it lost to competitors, even after the tariffs come down," he warned.