Feb 7, 2020
New York growers face influx of cheap Canadian produce; senators respond

On Feb. 6, U.S. Sen. Kirsten Gillibrand, a member of the Senate Agriculture Committee, and Senate Minority Leader Chuck Schumer called for investigations into unfair trade subsidies to Canadian growers, as New York state onion gowers struggle against an influx of produce, priced below the price of production, coming across the border.

“New York State is home to prime onion-producing land, yet our farmers are unable to sell their goods in a domestic market that is flooded by cheap Canadian exports,” Gillibrand said. “Farmers across the country have been struggling to keep up with growing production costs, while Canadian exporters have been able to dump cheap onions onto the market at prices comparable to 30 years ago. Since Canada has similar production costs, the only way this could be happening is through some type of government subsidy that is lowering their costs.  This would amount to an unfair trade practice and needs to be immediately investigated. I stand with the National Onion Association in calling on the U.S. International Trade Commission and the United States Trade Representative for a full review of Canadian pricing, subsidies and exporting practices.”

“Some of the best onions in the country come right from Orange County’s Black Dirt region, as well as from other upstate counties. However, due to Canada’s suspected unfair pricing practices, cheap Canadian onions are flooding United States markets and leaving New York onion farmers at a steep competitive disadvantage,” Schumer said. “As costs of production, labor, and equipment continue to rise, it’s time for the US International Trade Commission and US Trade Representative to immediately investigate Canadian onion exporters’ pricing practices along with the Canadian government’s trade regulations and level the playing field once and for all, allowing New York farmers to finally harvest the massive potential of their onions.”

New York state is home to Orange County’s famous “Black Dirt” Region, one of the premier onion-producing regions in the nation. Yet, New York farmers, including those who grow highly-prized black-dirt onions, are being forced to sell produce at market prices comparable to the 1980s. Data from the U.S. Department of Agriculture shows that Orange County onion growers received between $5.25 and 5.75 for a 50-pound bag of medium yellow onions, which would amount to around $13.00 or $14.00 today. Today, those farmers are offered only $7.00 per 50-pound bag, less than $2.00 more than what they were paid nearly 30 years ago.

Gillibrand’s and Schumer’s push for an investigation into the onion industry will help identify which factors contribute to unfair prices and ensure increased market transparency.

Full text of Senator Gillibrand’s and Minority Leader Schumer’s letter to the U.S. International Trade Commission and the United States Trade Representative can be found below.

February 6, 2020

The Honorable David Johanson

Chairman

U.S. International Trade Commission

500 E Street, SW

Washington, DC 20436

The Honorable Robert Lighthizer

United States Trade Representative

Office of the United States Trade Representative

600 17th Street NW

Washington, DC 20508

Dear Chairman David Johanson/ United States Trade Representative Robert Lighthizer:

We write to bring to your attention concerns raised by members of the New York State onion industry and the broader farming community regarding Canada’s trade practices, specifically unfair and discriminatory pricing practices by Canadian onion exporters. Such action places New York onion producers at a competitive disadvantage, especially burdening the onion growers in Orange County’s famous “Black Dirt” Region, one of the premier onion-producing regions in the nation.

The National Onion Association (NOA), which represents more than 500 member growers and suppliers throughout the country, has recently raised concerns that over the past ten years, “Canadian onions have flooded the U.S. market” at prices that domestic onion farmers are unable to compete with, particularly on a cost of production basis. According to NOA, once Canadian onions enter the U.S. market, onion prices plummet and remain low until Canadian businesses cut back on their exports.

Onion growers across the U.S., particularly in New York State, claim they are offered prices for their onions today that are highly uncompetitive and comparable to prices received more than thirty years ago. According to U.S. Department of Agriculture data, in 1984, onion growers in Orange County were receiving between $5.25 and 5.75 for a 50-pound bag of medium yellow onions, which would amount to around $13.00 or $14.00 today when adjusted for inflation. Instead, those same farmers are currently offered only $7.00 per 50-pound bag, almost the equivalent of what they were receiving at face value in the 1980s.

At the same time, the costs of production – including equipment, seed, crop protection chemicals, labor, and land – have all increased dramatically. New York farmers, including those who grow highly-prized black-dirt onions, cannot continue to sell at prices comparable to those from 30 years ago while accounting for higher production costs and expect to sustain business operations.

While we understand that allegations of unfair agricultural trade practices are a common concern for all types of growers, the action of Canadian onion exporters appears to be persistent and extreme, and warrants further investigation. Therefore, to support farmers and growers in New York and across the United States, who ensure a robust domestic supply of essential fruits and vegetable, we respectfully request that you:

1. Initiate a fact-finding investigation into the alleged unfair pricing practices of Canadian onion exporters, including:

a. A review of any potential anti-competitive pricing practices, including the sale of Canadian onions in the U.S. market at prices below the cost of production;

b. A comparison of U.S. and Canadian tariffs and nontariff trade regulations that apply to onions; and

c.  A review of Canadian government subsidy programs that support reducing the costs of shipping, fuel, imported seed and farm inputs, or crop price guarantees relating to onions through either country-wide or provincial-level support, or any other market-distorting practices;

2. Keep our offices apprised of any findings that result from such an investigation; and

3. Work in tandem with other relevant U.S. government entities, including the Office of the United States Trade Representative as the agency moves to implement and enforce obligations as part of the United States-Mexico-Canada Agreement (USMCA) and other international trade agreements, to address and rectify any discriminatory pricing or other unfair trade practices relating to Canadian onion imports.

We thank you for your attention to this important matter and look forward to hearing your response regarding the requested investigation.

Sincerely,

Kirsten Gillibrand

United States Senator

Chuck Schumer

United States Senator





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