OSWEGO —Instability in the national agriculture market, caused by uncertain fluctuations in the trenches of a trade war between the U.S. and major global economic players, is taking a toll on upstate farmers.
A back-and-forth of tariffs between the U.S. and China over the last year and a half — which has yielded tariffs on Chinese goods to the tune of $550 billion dollars, as well as imposed $185 billion on American goods levied by the Chinese government, as reported by the Associated Press (AP) — has prompted government agencies to prepare for the damage rocky negotiations can have on small farmers. In May, Secretary of Agriculture Sonny Perdue announced farmers all over the nation could be eligible for direct relief disbursements amounting to $14.5 billion in restitution for impacts of turbulent foreign trade outcomes and elected officials and local farmers are questioning the fairness of the payments allocated to farmers in upstate New York.
U.S. Senate Minority Leader Charles Schumer is leading the charge in requesting the U.S. Department of Agriculture (USDA) — the agency distributing the aid packages through the Market Facilitation Program (MFP) — to bridge the gap in disbursements, arguing farmers in other states are receiving up to $150 for every acre of affected crops, while farmers in New York are receiving grants of as low as $15 per acre. In Oswego, farmers receive average compensation amounting to $39 per affected acre.
“As upstate farmers are grappling with extreme uncertainty caused by the chaotic global climate, USDA is using a flawed formula that helps big wealthy farms and billion-dollar foreign-owned companies, while our small and family farms in New York have been left in the dust,” Schumer said in a statement. “The USDA must stop picking winners and losers in such an unbalanced way, and instead ensure all of America’s and upstate New York’s farmers get the help they need and deserve — not just a lucky few.”
MFP payments on non-specialty crops — which include canola, corn, dried beans and peas, chickpeas and soybeans — are based on the lesser of total 2019 plantings or 2018 plantings and depend on the impact of the unjustified trade retaliation in that county, according to USDA guidelines. Further, farmers of dairy products, a staple of upstate agriculture, will receive a per hundredweight payment on production history.
Andrew Novakovic, the E.V. Baker Professor of Agricultural Economics at Cornell University, told The Palladium-Times in a Tuesday interview there is no regional differentiation for MFP payments, in terms of economic impact brought upon by the trade war.
“There's nothing that says (any state) is more impacted than any other,” Novakovic said, noting fluctuation in the agriculture in America follows a “all boats rise and fall on this tide” model. “So when you're talking about the impact on the price of corn or the impact on the price of soybeans, the fact of the matter is the price of soybeans in Georgia is not the same as the price of soybeans in Iowa, but they tend to go up and down together.”
Novakovic noted the disparity between payments to farmers in other states and the payments distributed in New York may be derived from the $250,000 payment limit for dairy and hog producers as well as specialty crops — which include almonds, cranberries, grapes, fresh sweet cherries and walnuts.
Another cause for the difference in restitution may arise from an income cap that limits MFP payments. Eligible applicants must have an average adjusted gross income for tax years 2015, 2016, and 2017 of less than $900,000, or 75 percent of the person’s or legal entity’s average AGI for those tax years must have been derived from farming and ranching, the agency notes in the program’s application.
The concept of base acres — a snapshot of a farm’s acreage dedicated to a specific crop as recorded by the USDA — is also a contributing factor to the diminished payments retrieved by upstate farmers.
“The USDA says ‘we have a previous history of agricultural programs that establishes a base and it says you have these many base acres in corn,’” Novakovic said. “So in these ongoing programs, the base acres are a way to define or establish a boundary for how much of a payment you qualify for. The general idea is to kind of keep farmers from gaming the system prevent them from getting in the business of growing corn, or soybeans just for the purpose of getting a payment.”
Agronomic conditions have prevented farmers in the northeast part of America from establishing a high base acreage, and thus participating in programs such as MFP, Novakovic said.
According to the USDA’s 2017 agriculture census, 3,453 out of 25,044 — or 19.3 percent — of New York farms receive government payments.
Low participation in these programs, Novakovic said, is also attributed to the nation’s agricultural priority. He added crops such as soybeans, corn, wheat, cotton are mostly found in abundance in the midwest and the south.
Dairy farmers, Novakovic noted, feel “they are getting the short end of the stick” in terms of government programs.
“The MFP is kind of calibrated around the general architecture of major ongoing agriculture programs, and the reality is dairy just doesn't get as big a share of the pie,” he said. “The reason for that is primarily that producing milk is just a completely different process from growing a crop. You grow corn and harvest it once a year, but you farm dairy two, three or four times a day, and it's a highly perishable product. As a result of these intrinsic differences, policies were set up differently because what we do for corn or soybeans actually wouldn't work very well for milk production.”
As the period for farmers to sign up for MFP draws near — deadline is Dec. 6 — Novakovic reflected on the current state of affairs regarding Washington’s relationship with trade partners across the globe.
“I think the question that everybody is asking is: okay, let's suppose (a few) years from now we've got an administration and a Congress who say ‘my bad, we're going to stop doing this,’ Novakovic said. “Does everything just go back to where it was before? And I think there's a belief or concern that the toothpaste isn't going to go completely back into the tube.”
Novakovic pointed to Mexico as a trade partner that is already looking to diversify their imports due to unfavorable trading conditions with the U.S.
“When you look at dairy product exports to Mexico — which was our single largest customer for dairy products, for the obvious reason that you can export to Mexico on a truck,” he said. “But when we started playing games with Mexico, they retaliated and said ‘we've come to understand that we actually can't trust the U.S. to be our sole source supplier.’ Today, the U.S. represents about one half of the dairy imports coming into Mexico. I think the Mexicans are going to be pretty hard pressed to say ‘okay, you can have it all back.’”
For some Oswego County farmers, known for growing a bevy of products including onions, corn, malt and soy beans, the trade war isn’t the only factor slowing down business. The Sorbello and Sons farm, which is located in Fulton and according to AP reports has received $20,922 in federal payments to make up for the losses the farm has suffered from tariffs, has also slowed down due to unfavorable weather conditions.
Morris Sorbello, a Republican representing the town of Granby in the county Legislature and the owner of the farm, told The Palladium-Times Sorbello and Sons has lost 3,000 bags of onions this year due to inclement weather.
“Our farm operation is geared mainly toward growing onions mainly in muckland soil,” Sorbello said, explaining muckland soil is a nutrient-rich parcel of wetland that has absorbed the enriching components of adjacent vegetation and decaying trees.
The process to grow and harvest onions for the Sorbello family takes approximately 120 days due to the muckland soil. Due to record-setting water levels along the Lake Ontario shoreline and heavy rains experienced this year, the harvesting process was delayed.
“Primarily with the lake getting in the way of harvesting, the process was delayed,” he said. “We lost 3,000 bags of onions, the machines got wet and we couldn’t harvest.”