Over the last several weeks, the staff here at CCM has received questions as to why the citrus industry is not getting direct payments. Since the first round of trade mitigation, several commodities in California have been added to the Market Facilitation Program and growers are wondering why they are not being paid for their citrus. This issue was thoroughly discussed at our August 28th board meeting and will continue, but we thought it was important to communicate our evaluation of the situation and what we continue to advocate for.
CCM has been working very closely with USDA to maximize trade mitigation for our growers and to minimize the harm due to the high tariffs that China has placed on citrus and other commodities. During the first round, we disputed the amount of economic losses we would see and advocated for several options; options that we believed would offset the losses. At the end of those discussions, USDA rolled out trade mitigation in three forms 1) direct payments for program commodities through the Market Facilitation Program; 2) Food Purchase buys; and 3) export marketing promotion. USDA economists estimated the impacts on U.S. citrus and awarded $55 million in support through the Food Purchase Program. While this wasn’t the perfect solution, nor did it cover all the losses, it did remove a considerable volume of citrus out of the traditional marketplace.
Since then, several commodities have been added to the Market Facilitation Program. Those industries evaluated the program and believed that it was best for their individual commodities. Citrus did not ask to switch from Food Purchase buys to direct payments because of several important factors that would have limited the mitigation. The first reason was that California fresh citrus had the largest amount of direct impact from trade with China. For example, Florida was not exporting juice to China. The direct payments awards are by commodity and thus any payment for citrus would have been spread across all citrus acres in the country. USDA would not segment those payments to only those who export to China because of existing World Trade Organization rules. The Food Purchase program, however, could be tailored more specifically to California and thus utilize the full damage amount to the area impacted. If we would have switched to direct payments the largest benefit would have gone to Florida, not California. Other issues identified were the Adjusted Gross Income eligibility requirements of $750,000 and payment limitations of $250,000. These limitations would have further restricted our ability to be mitigated for our trade impacts with China.
This is not to say that direct payments to producers are off the table. The programs are being modified slightly, and we continue to press USDA to provide more flexibility in their programs. Additionally, the main objective is to increase the damage assessments that are being used for awards by commodity. As more flexibility is incorporated, the CCM Board will continue to pursue avenues that maximize the returns for growers. Please contact our office if you have further questions about the China trade situation or the Trade Mitigation packages.