California farmers peeved at Trump, claim they were 'pawn' in US-Argentine trade deal
Stephen Osman | Los Angeles Times | Getty Images. California citrus growers on Tuesday criticized the Trump administration for lifting a 16-year import ban on lemons from the top-growing region of Argentina. ·CNBC
Jeff Daniels
Updated
California citrus farmers on Tuesday blasted the Trump administration for lifting a 16-year import ban on fresh lemons from a key growing region of Argentina.
At the same time, the industry charged the action was a "double standard" by an "America First" president who touts jobs and one that could end up hurting American family farmers.
"The administration blindsided us," said Joel Nelsen, a farmer and president of the California Citrus Mutual, a citrus producers trade group.
The U.S. industry claims allowing in the Argentine fruit will bring added risk of citrus diseases and pests that could jeopardize the domestic crop. Clearly, the issue also irritates domestic growers because the South American country produces the world's largest crop and is a global competitor in selling to lucrative markets such as Asia.
Late Monday, the U.S. Department of Agriculture announced it would allow imports effective May 26 from four Argentine provinces, which are located in the country's top-producing northwest region. It followed a meeting last week between President Donald Trump and Argentine President Mauricio Macri at the White House.
"Is the USDA setting a precedent for future trade negotiations — because I hope not," Nelsen said. "The Argentine president was doing what he should do — representing his growers and his business sector. Obviously, our president lost sight of that objective."
The USDA didn't respond to a request for comment.
More than 90 percent of the lemons produced in the U.S. are grown in California, and the remainder mostly in Arizona. Some U.S. citrus companies, such as Limoneira (NASDAQ: LMNR), source product from Chile and Mexico as a way to get fresh product throughout the year.
Citrus executives were perplexed by the Trump administration's action to lift the import ban since they claim it could ultimately hurt thousands of U.S. family farmers growing the fruit.
California exports about 10 to 15 percent of its lemon crop overseas, mostly to top Asian markets such as Japan, China and South Korea. Over the years, Argentina has aggressively priced its fruit in certain international markets to gain a competitive advantage against the U.S. and others.
"If you take a look at what the president said on behalf of Wisconsin dairy farmers last week," Nelsen said. "He's always spoken about the need to protect each and every business sector in trade agreements and protect jobs. This [Argentine action] is a double standard."
To be clear, growers say even if they wanted they probably couldn't technically use economic or competitive reasons as grounds for objecting to a lifting of the import ban. That's because the ban itself was a government rule specifically to protect against citrus disease. Even so, growers insist the ban is still needed due to continued risk of citrus diseases and pests from the key growing region of Argentina.
The Obama administration pledged in December to lift the 2001 import ban and the Trump administration soon after the inauguration issued a 60-day stay on the prohibition. A second 60-day stay followed and is set to expire May 26.
"I know about all the lemons," Trump said last week at a joint press conference with the Argentine president. "And believe it or not, the lemon business is a big, big business."
Added Trump, "One of the reasons he's here is about lemons. And I'll tell him about North Korea, and he'll tell me about lemons."
"It is evident that the California citrus industry is the pawn in a greater trade deal between the Trump administration and Argentina," said Richard Pidduck, a citrus grower and chair of the U.S. Citrus Science Council.
In California alone, the state's citrus crop is a $3.3 billion business and is estimated to provide about 22,000 jobs.
According to Pidduck, the Trump administration is not taking the citrus disease threat from Argentina seriously enough.
"When the fruit comes into the U.S., it could bring things we don't want with it," said Pidduck. "There are a number of pest and diseases and phytosanitary issues in Argentina that we have not had to deal with here in the U.S. and that's why the fruit has been kept out."
Indeed, the U.S. citrus industry has been fighting several deadly diseases, including citrus canker that can be found on the peel of fruit as well as citrus greening spread primarily by an insect the size of a grain of rice.
The citrus greening problem has caused a loss of more than $3 billion in revenue in devastated states such as Florida as well as the disappearance of thousands of jobs since it was first discovered more than a decade ago, according to University of Florida estimates. A January report released by the USDA found the disease "continues to reduce production."
Meantime, the proposed rule lifting the ban requires the imported lemons be treated with a surface disinfectant. Also, it requires a certificate as proof the crop had been inspected and found free of quarantine pests.
In considering the rule change, the USDA's Animal and Plant Health Inspection Service (APHIS) agency looked into economic implications of lifting the ban on the domestic lemon industry.
"The majority of businesses that may be affected by the proposed rule are small entities, including lemon producers, packers, wholesalers, and related establishments," the government documents supporting the action stated.
Furthermore, APHIS estimated lemon prices would decrease by about 4 percent with the import lifted. "Consumer welfare gains of about $25 million would outweigh producer welfare losses of about $22 million," it stated.
Some even questioned if the lifting of the ban by Trump could be a form of political pay back for California, a state the president lost in the 2016 election.
During Trump's inaugural address, he pledged: "Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families."
"California is not in the president's best graces," said Pidduck. "We're an easy industry to give up."
Added Pidduck, "One day the administration is very nationalistic and another day it has global concerns. It's hard to track."
Moreover, citrus officials claim the Trump administration essentially shut them out of the process and stymied their attempts to arrange meetings.
"When we tried to meet with some of the people at senior levels of the administration we've been ignored," said Nelsen. "That is extremely aggravating."
