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Trump gave billions to farmers for Chinese tariffs. How much did the Valley, California get?

Soar over a Fresno County cotton field during harvest

Get an aerial view of cotton being harvested in a field at VF&B Farms in the Fresno County town of Cantua Creek on Wednesday, Oct. 17, 2018.
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Get an aerial view of cotton being harvested in a field at VF&B Farms in the Fresno County town of Cantua Creek on Wednesday, Oct. 17, 2018.

Farmers in California received about $76.3 million in federal subsidy payments for economic harm they may have suffered as a result of President Donald Trump’s trade war with China.

According to data acquired by The Associated Press, 4,442 payments between October and May were made to California farmers growing commodities affected by China’s imposition of tariffs on American agricultural goods imported into that country.

China’s action was retaliation for tariffs the Trump administration levied on Chinese goods coming into the United States. On Thursday, President Donald Trump announced more tariffs on Chinese imports, likely adding fuel to the ongoing trade dispute.

The payments to California farmers from the U.S. Department of Agriculture’s Market Facilitation Program were among more than $8.5 billion worth of subsidies to 577,713 farmers nationwide, the AP analysis shows. Payments were for both individual farmers and farming companies.

Farmers in the agriculture-rich central San Joaquin Valley – Fresno, Kings, Madera, Merced and Tulare counties – received the lion’s share of subsidies paid to California. Dairy producers, hog farmers and growers of cotton, almonds, cherries, wheat, corn, and soybeans were paid more than $44.8 million.

Individual payments ranged from a $2 almond subsidy for a ranch in Tulare County to a cotton subsidy of almost $347,000 to Gilkey Five, a farming business in Corcoran that also received a wheat subsidy of more than $62,000. The largest beneficiary of the program in the Valley was a collection of dairy operations in Kings and Tulare counties that received more than $502,000 – Hollandia Farms Inc., Cloverdale Dairy LLC, Lansing LLC, Diamond D LLC and DDW Farms LLC, which share a common business mailing address in Hanford.

While the average subsidy amounted to more than $42,000, many individual farmers received far less, depending on how much their particular crop or commodity was affected by tariffs under USDA guidelines.

Among those is Robyn Nelson, who with her son farms 10 acres of almonds in addition to the family’s established raisin acreage south of Madera. Nelson received a shelled almond subsidy of $310 for last year’s crop – the first year of production from her small orchard.

“This was our first crop, and it was only about 1,000 pounds,” Nelson said. Nelson said the family sells its almonds to a distributor that sends most of its almonds to Great Britain, but didn’t know if any of her crop would have been destined for China, where it would be affected by that country’s tariffs.

“I’ve not heard any complaints from anyone about the trade thing affecting anyone around here at any level,” she said.

Still, “we thought we may as well apply” for the subsidy program,” she added. “We knew it wasn’t going to be much.”

While there were applications to be filled out and paperwork to submit to report crop details — such as acreage, number and ages of trees, irrigation practices and post-harvest crop tonnage — the process itself wasn’t daunting, Nelson said. It’s not so much a question of whether the eventual small subsidy was worth the paperwork. “The real question is what is the percentage or ratio of payment to production cost,” she said.

Nelson said she, like all farmers, are used to fluctuating prices for crops. “These (subsidies) are a relatively minor cushion in the grand scheme of things,” she said. “I hope farmers don’t expect these subsidies to evolve to a point of covering all expenses,” she said. “I am a farmer who is fundamentally opposed to subsidy. However, it should be temporary.”

Fresno County Farm Bureau President Ryan Jabobsen said farmers he’s talked with aren’t relying on subsidies being an extended or permanent revenue source.

“It’s welcome news that the president has put an emphasis on making sure agriculture stays strong,” Jacobsen said. But, he added, “we understand that it’s for the short-term, a fill-the-gap type of program to deal with the ramifications we’ve had in this trade battle.”

“For us in the industry, a resolution is something that we badly want to see,” he said. “We’re optimistic that we’ll see some trade agreements come sooner rather than later; I hope we’re talking about months from now rather than years.”

On Thursday, however, President Donald Trump announced the U.S. will apply a new tariff of 10% on about $300 billion worth of products from China beginning Sept. 1, escalating the two countries’ festering trade dispute. Trump tweeted amid slow-moving talks with China that negotiations will continue. But he blamed China for not following through on stopping the sale of fentanyl to the United States or purchasing large quantities of farm goods such as soybeans.

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The U.S. Department of Agriculture estimated that China’s tariffs last year cost U.S. farmers about $11 billion. The Trump administration provided up to $12 billion, mostly in the form of direct payments to farmers, to make up for those impacts from last October through May 31.

“It’s no secret that California ag products, especially those we farm in the San Joaquin Valley, have multiple times been the target of retaliatory tariffs from China and other countries,” Jacobsen said. “And it’s not just China. There’s uncertainty with India, a little bit of uncertainty on the European Union side of things.”

Any agricultural producer was eligible to apply for the subsidy program if they produced any of the nine commodities identified by the USDA as tariff-affected and they had an average annual adjusted gross income of less than $900,000.

The subsidy program set caps on the subsidies that could be paid to an individual farmer or legal entity in three categories:

  • $125,000 for crop commodities such as soybeans, wheat, cotton, corn and sorghum.
  • $125,000 for dairy production and hogs.
  • $125,000 for fresh sweet cherries and shelled almonds.

If an individual farmer produced commodities in each of the three categories, he or she could have received up to $375,000.

Business farming operations, however, could receive more than the stated maximum – and across the country, many did, according to the AP’s analysis of the USDA data. Almost 3,100 recipients nationwide were paid over the cap, and one producer got nearly $1 million.

On Wednesday, the USDA announced that the 2019 Market Facilitation Program is open for farmers to sign up. The USDA has $14.5 billion available for direct payments to affected farmers. Specialty crops eligible for tariff subsidies this year are almonds, cranberries, cultivated ginseng, fresh grapes, fresh sweet cherries, hazelnuts, macadamia nuts, pecans, pistachios, and walnuts.

Non-specialty crops on the 2019 subsidy list are alfalfa hay; barley; canola; corn; crambe (an oilseed crop); dried beans; dried peas; extra-long staple and upland cotton; flaxseed; lentils; long-grain, medium-grain and temperate japonica rice; millet; mustard seed; oats; peanuts; rapeseed; rye; safflower; sesame seed; large and small chickpeas; sorghum; soybeans, sunflower seed; and wheat.

Dairy and hogs round out the eligible commodities.

The Associated Press contributed to this report.

Lifelong Valley resident Tim Sheehan has worked in the Valley as a reporter and editor since 1986, and has been at The Fresno Bee since 1998. He is currently The Bee’s data reporter and covers California’s high-speed rail project and other transportation issues. He grew up in Madera, has a journalism degree from Fresno State and a master’s degree in leadership studies from Fresno Pacific University.
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