PARTNERS

By Vicky Boyd 

FLANKED BY A BIPARTISAN GROUP of four congressmen, U.S. Secretary of Agriculture Sonny Perdue answered questions about trade, immigration and water at a recent town hall-style meeting in Los Banos.

The Merced County event was the second of three in a day-long California blitz by Perdue. The others were in Watsonville and Clarksburg.

Attending the Los Banos meeting were Reps. Jim Costa (D-Fresno), Josh Harder (D-Turlock), Doug LaMalfa (R-Richvale) and TJ Cox (D-Fresno). Also, San Joaquin Farm Bureau Executive Director Bruce Blodgett attended along with other county Farm Bureau and California Farm Bureau Federation leaders.

High on the list of issues was trade, including the ongoing trade dispute with China and the United States-Mexico-Canada Agreement. Perdue acknowledged that agriculture has been a casualty of the trade war with China but pointed out that the country hasn’t been playing by the rules.

Double whammy for wine

The Chinese tariff situation has been a double whammy for the state’s winegrape growers and wineries, said Stuart Spencer, Lodi Winegrape Commission executive director who did not attend the town hall. China had been a developing market for Lodi wines, but shipments have slowed since the retaliatory tariffs.

“That would be a win once it gets resolved,” he said. “I think our producers would be very anxious to see that happen.”

At the same time, many smaller wineries that bought their glass bottles from China have seen 15 to 20% price increases because of tariffs.

“There’s a lot of glass that’s imported from China,” Spencer said. “The cost and the regulations around producing glass in California got so difficult that most glass producers moved overseas.”

Walnuts also hit

Although China’s 100% retaliatory tariffs on California walnuts definitely reduced shipments, exports to that country had already been slowing for two to three years before, said Jake Samuel, who grows walnuts and cherries with his brother and father near Linden.

India aggravated the situation by adding a 20% tariff June 15 onto an existing 100% retaliatory tariffs on U.S. walnuts. Adding to the pain was Turkey, a large California walnut customer that experienced a weak Lira compared to the strong U.S. dollar beginning with the 2018 walnut harvest. at was coupled with a retaliatory tariff of 30% on in-shell walnuts that decreased to 10% in May.

“The big Asian buyers and Turkey that had been big buyers in the past haven’t been buying,” said Samuel, also SJFB second vice president.

A smaller-than-usual California walnut crop in 2017 brought higher prices, slowing exports. Then came 2018, with an unusually large walnut crop.

“We raised the prices because of the supply issue (in 2017), and in raising prices for the buyers, they weren’t able to move the 2017 crop before the 2018 crop,” he said. “It was the perfect storm. Everything hit at once, so we’ve received 50% less value for our walnuts compared to the 2017 crop. Going into 2019, things are a little bit more positive, but we’re not going to see any type of numbers like we did in 2016 or 2017.”

USMCA, a.k.a. NAFTA 2.0

Perdue then turned the town hall discussion to the USMCA, which would modernize and replace the North American Free Trade Agreement. Mexico became the first country to ratify the new agreement, doing so in June. The U.S. Congress and Canadian Parliament still have to approve it. “But time will tell what comes of (the USMCA),” Blodgett said.

In a July 30 letter to Speaker of the House Nancy Pelosi, a handful of California representatives – including Harder and Cox – praised her leadership alongside the Democratic working group and reiterated their support for USMCA.

“We write in support of continued negotiations through the upcoming recess, to ensure a vote on a bipartisan agreement by the end of the year,” they wrote. “It is imperative that we reach a negotiated agreement early in the fall.”

NAFTA bene ted apples, wine

Since the repeal of NAFTA, Canada is the No. 1 export market for California apples, followed by Mexico as No. 2, said Jeff Colombini, president of Lodi Farming and chairman of the California Apple Commission. During NAFTA, Mexican imports of California apples grew four-fold.

“It’s a very important market,” he said of Mexico. “So the MCA is really, really important to apple growers, not just here but around the country but more to California. Those really are our two main export markets.”

Sometimes referred to as NAFTA 2.0, USMCA would also benefit the state’s winegrape growers and wineries, according to the Wine Institute, which represents the state’s wineries. Canada is the No. 1 market for U.S. wines, and 90% of those come from California, according to Wine Institute gures. In 2017, Canada accounted for $1.53 billion in winery revenues and 380 million liters (42.2 million cases) in volume.

Although Spencer hasn’t polled individual Lodi Winegrape Commission members about their Canadian exports, he said he suspects they’re similar to the state’s as a whole.

“The more we can have an even playing field in Canada as far as wine sales, the better off Lodi winegrape growers will be,” Spencer said.

Immigration reform

Farmers at the town hall also expressed the need for immigration reform, adding they have trouble securing enough labor.

Perdue said the administration realizes the H-2A guestworker program is cumbersome and is trying to tweak it to make it more user friendly.

“The H-2A will take more than a tweak to make it work,” Blodgett said. “But at

least the administration has recognized we need workers, and we need a labor force now. Now we just have to get Congress to come on board. They’ve talked about it but they don’t do a lot.”

A few weeks after Perdue’s town hall meetings, the U.S. Department of Labor announced proposed rulemaking to seek public comments on proposed modernization of the H-2A program. The goal is to be responsive to stakeholder concerns while maintaining protections for the U.S. workforce and enhancing enforcement against fraud and abuse, according to a DOL press release. The notice can be found at https:// bit.ly/2YV8ID3.