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How will the newly imposed tariffs from Mexico affect U.S. agriculture and agricultural trade with Mexico?
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Negotiating asparagus prices
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I went to the 2009 Oceana Asparagus Day in Shelby, Mich., March 12. The meeting of Michigan’s asparagus industry is held every year, just before harvest season gets going. The audience – growers, university personnel, chemical reps and others – gets an update on what’s been going on in the industry and a glimpse of what might be down the road.
One of the speakers was Ken Nye, executive director of the Michigan Agricultural Cooperative Marketing Association’s Asparagus Division. He said that MACMA and Michigan’s eight asparagus processors had negotiated a price of 66 cents per pound for this year’s cuts and tips, which go into cans and frozen packages.
This year’s price is down 1 cent from last year’s 67 cents per pound – which was the highest Michigan growers have ever been paid for their cuts and tips. MACMA’s initial recommended price for this year was 68 cents, but that was a little too high for the processors, Nye said.
Another speaker was John Bakker, executive director of the Michigan Asparagus Advisory Board. He told growers about the Market Loss Assistance Program. For more about that, see the Q&A below.
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John Bakker
Executive Director, Michigan Asparagus Advisory Board
Can you give some background on the Market Loss Assistance Program? What it is and why it was created?
Industry efforts to get some relief for U.S. asparagus growers started in the late 1990s. By that time, they were being hit by huge increases in Peruvian imports. We tried unsuccessfully for years to modify the Andean Trade Preference Act, a U.S. drug policy that allowed tariffs on asparagus to drop from 17 percent to zero overnight. We tried applying for relief under the Trade Adjustment Assistance Act, but couldn’t qualify. We looked into an anti-dumping case and finally tried to amend the Peru Free Trade Agreement, but were unsuccessful in all efforts.
When we realized the trade rules were here to stay, we approached Sen. Debbie Stabenow about inserting the Market Loss Assistance Program into the 2008 Farm Bill. Our troubles began as an unforeseen impact of the U.S. war on drugs, and we wanted to provide U.S. growers at least partial compensation for their losses.
The program will give $15 million to the U.S. asparagus industry. How will that money be divvied up?
We looked at the value of the industry from 2003 until 2007, and came up with some pretty staggering losses. We determined that $15 million would be a good amount to get the industry back on its feet. Half the money will go to the fresh side of the industry and half to processing.
We don’t know exactly how the money will be divvied up until we see the final rules, but we estimate that roughly 38 percent will go to growers in California, another 38 percent to Washington state, 20 percent to Michigan and the remaining 4 percent to other parts of the country.
Who’s qualified to receive the money? How do they sign up?
There are two criteria: You had to be a producer in 2003, and you still had to be a producer in 2007. We anticipate signup will be through local Farm Service Agency offices.
How much money will each grower get, and when will he or she get it?
Until we see the final rules, it’s almost impossible to predict how much each grower will get. At best, they’ll be compensated for a percentage of their losses from 2003-07. No one should expect to receive an amount that would match actual losses from that period. They could receive a check sometime this summer – at the earliest.
When they do get their money, what should they do with it?
I hope growers will reinvest their money back into the industry – perhaps purchase more expensive hybrid seeds or embrace new technology – but I don’t believe the rules will require that. Still, our goal is to get the U.S. asparagus industry back on its feet. That’s why we went through all this effort.
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