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<strong>Nut</strong>s and the Trade War<br />
CALIFORNIA’S<br />
AG AND FOOD<br />
INDUSTRY HAS<br />
BORNE THE<br />
BRUNT OF THE<br />
TRADE WAR<br />
MFP PAYMENTS NOT ONLY FAILED TO<br />
ADEQUATELY OFFSET THE GOLDEN STATE’S<br />
TRADE LOSSES, BUT OVERCOMPENSATED<br />
CROPS IN OTHER STATES.<br />
By CATHERINE MERLO | Contributing Writer<br />
Table 1. Government Payment vs. Net Farm Income, 2019 1 , Selected States, $ Millions<br />
Note: 1 Government payment refers to federal direct farm program payments, mainly MFP payments for 2019; Data are for<br />
2019 calendar year.<br />
Source:USDA ERS, Farm Income and Wealth Statistics, 2020<br />
California received the lowest total government payment in terms of percentage<br />
of the net farm income.<br />
California tree nut producers<br />
were among the biggest losers of<br />
the trade war that began under the<br />
Trump Administration, a UC study has<br />
found.<br />
In fact, California’s farmers and<br />
food processors were hit harder than<br />
their counterparts in any other state.<br />
And, despite compensation from<br />
USDA’s Market Facilitation Program,<br />
most California farmers were not<br />
made whole by the aid, said lead author<br />
Colin A. Carter, a Distinguished<br />
Professor of Agricultural and Resource<br />
Economics at UC-Davis.<br />
“California’s losses from the trade<br />
war far exceeded the government compensation<br />
payments,” Carter noted.<br />
The study, “2018 Trade War, Mitigation<br />
Payments, and California<br />
Agriculture,” was released in late 2020.<br />
Jiayi Dong, a doctorate student at<br />
UC Davis, and Sandro Steinbach, an<br />
assistant professor at the University of<br />
Connecticut, co-authored the report<br />
with Carter.<br />
Before the trade war, California’s<br />
share of the tree nut market in China<br />
had been growing rapidly. But almost<br />
all California products exported to<br />
China— one of the world’s largest<br />
importers of agricultural products—lost<br />
significant market share due to the<br />
trade war and resulting retaliatory tariffs.<br />
The U.S. market share for almonds,<br />
pistachios and walnuts fell from 94% to<br />
just 53%.<br />
Overall, tree nuts suffered substantial<br />
trade war losses of about $239<br />
million, with the MFP payments<br />
accounting for just 52% of the loss, the<br />
report found.<br />
The Imbalance of MFP Payments<br />
President Trump launched the trade<br />
war against China in 2018, protesting<br />
unfair trade practices by the Asian<br />
superpower. The U.S. imposed tariffs<br />
on more than $550 billion of Chinese<br />
products. China retaliated with tariffs<br />
on more than $124 billion of U.S. goods<br />
between July 2018 and August 2019.<br />
The result? U.S. farmers lost billions<br />
Continued on Page 6<br />
4 <strong>West</strong> <strong>Coast</strong> <strong>Nut</strong> <strong>April</strong> <strong>2021</strong>
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