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Senator Murray travels to Ritzville to listen to the potential impact of tariffs for local ag industry

 

August 9, 2018

SENATOR PATTY MURRAY (left) speaks with agricultural industry leaders regarding the trade situation within the United States. Murray requested feedback to the tariffs and security in order to pass along the message of her constituents within Washington state to the Senate. -Journal photo by Katelin Davidson

Senator Patty Murray made a special trip to Ritzville on Aug. 7 to meet with agricultural industry leaders and receive feedback regarding the current tariffs situation in the nation.

The ongoing discussion in Washington, D.C., has focused primarily on the impact the tariffs have on industry in the Midwest, but Murray stated she wanted to hear about the affects within the State of Washington and hear what the tariffs mean for trading partnerships that area farmers have worked hard to create.

“Trade, tariffs all of this have been a major discussion in our country today. I’ve worked on trade issues for a very long time… I know we have to sell here what we grow amazing well,” Murray said. “Tariffs can be terribly devastating.”

US Wheat Associates Chairman and Ritzville Farmer Mike Miller said the disturbing part is in DC that everyone is aware of the short term effects, but the long-term is not being addressed. The main concern for farmers is how short is “short”, Miller explained, and what is the long term gain.

Northwest Horticulture Council President Mark Powers explained there are already significant impacts to cherries, pears and apple industry. Mexico, India and China are the main importers, and the tariffs could potentially have a half of billion dollars affect on the cherry and apple market. He clarified the whole market will not be lost, but there will be a significant impact.

“We’re hoping that the Administration gets to the point of negotiating some of these tariffs quickly,” Powers said.

For the apple industry, it is crucial to have a decision by this fall to determine the planting season. Powers said there is already an impact with price and market, and there are also growers that are no longer making their originally planned investments.

Murray asked when the cutoff for farmers is to plan for the upcoming year, and Powers said it has already started for the tree fruit industry because of the length of time to produce a crop. Most farmers have to plan a year in advance, but it comes to the bankers because of the amount of money involved.

Powers explained a tariff on any crop would allow the European Union to offer the same commodity to current trading partners like India for a lower cost. He added if the tariffs are still in place next year, it will be devastating for the cherry market.

Stacy Kniveton, farmer and member of the Washington State Potato Commission, said the impact to alfalfa trade was immediate when the trade war began, but Timothy grass is still doing well. He explained China had been a large importer of alfalfa but immediately said no, and they will now utilize cheaper alternatives to fill their need.

In 2011, the trade war with Mexico threatened the potato industry as markets were lost as a result of the tariffs. After years of rebuilding and gaining back the market, the tariffs are threatening all of the progress, Kniveton stated.

Stacy added the agriculture industry as a whole agrees free trade agreements should be renegotiated.

Murray stated there is a positive expectation that a trilateral agreement between Mexico, Canada and the U.S. can be reached by Labor Day.

Miller stated loan institutions will play a large role in the trade war, as farmers will go to the banks for more financial support, but the uncertainty of the situation could be detrimental to their funding. The banks finally recovered from the loss of the last trade war, and will be hesitant to offer assistance.

He added time is the largest concern, and with the uncertainty of what is going to happen, it is difficult to rebuild trade relationships when there are not guidelines provided on how to bring back a market that could be lost because of tariffs.

Murray also asked if the $12 billion aid money would be of assistance to area farmers.

VP Operations for Northwest Farm Credit Marva Ulleland explained, because of the diversity of the state, the smaller industries likely will not receive any of the bail out money. Crop insurance money is not supposed to be used as a bail out, and people will continue to self-insure which increase the risk.

She added looking at historical events; the U.S. market still has not recovered from the 1980 embargo.

Murray agreed there needs to be a better trade agreement, but tariffs, like the recent ones to steel and aluminum, have negative impact. She said both parties realize the short term impact, but the conversation needs to be improved as a decision in the winter is too late for farmers.

Miller stated the fall and winter is typically when industry leaders are traveling and working to establish trade partnerships. If the markets are still in uncertainty, commodity leaders will still make trade trips, but to where will be the problem.

Murray stated as an optimist, she wants the President and his team to establish a good agreement for all trade within the U.S. She said she understands why farmers want to know what the gain will be instead of only hearing “there will be some pain for awhile.”

Miller stated without a trade agreement and successful export industries, the loss of revenue not only affects the farmer in Washington state, but also Olympia. The financial impact statewide could then result in a lack of funding or support for local levies or bonds.

Adams County Sheriff Dale Wagner spoke to the potential security issues following the tariffs. He categorized the area as a distressed community, with a lack of growth countywide.

While ACSO constitutionally protects the communities, the access to resources are limited which hinders the department’s ability to serve and protect as it should. Without the funds for additional law enforcement officers, Wagner said the resources continue to decline and create a greater safety concern to the public.

Miller added to Wagner’s concern, stating after a harvest season, farmers are playing a “tax game” and making plans for the upcoming season. If the tariffs negatively impact the amount of money a farmer could spend, they may pay to fix a combine instead of buy new, which will in turn hurt the dealer’s bottom line.

With the tariffs, the debate wages a conflict between the consumer and the producer. The issue is widespread and will affect the entire nation, whether in higher food costs or even vehicle parts.

“We need fair trade but not at the bankruptcy of agriculture,” Ulleland stated.

Murray’s take-away from the conversation was the real concern regarding uncertainty, both for the short and long term affects tariffs could have on the industry. She thanked those for participating in the conversation and providing information she can take to DC and use as examples of the impact of current and potential tariffs.

 

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