September 04, 2018

As NAFTA Renegotiations Resume With Canada This Week, Gillibrand Calls On President Trump To Protect Dairy Farmers In New York And Across The Country

Gillibrand Urges Administration to Reject Any NAFTA Renegotiation Unless It Creates New Opportunities for Dairy Farmers, Ends Unfair Subsidies for Canadian Dairy Farmers; Gillibrand Also Calls on Administration to Immediately Issue Payments to Dairy Farmers Hurt by Trade Tariffs

As NAFTA renegotiations resume with Canada this week, U.S. Senator Kirsten Gillibrand, a member of the Senate Agriculture Committee, today urged the Trump Administration to reject any trade agreement unless it protects New York dairy farmers. Unfair Canadian trade policies limit American dairy producers’ access to the Canadian market, and Gillibrand called on the Administration to end these practices in any new trade negotiation. In addition, with the Administration’s trade war and historically low dairy prices continuing to harm dairy farmers, Gillibrand also called on the Trump Administration to immediately distribute authorized emergency relief payments to help support dairy producers.

“New York’s dairy farmers are struggling right now. Milk prices are too low, our dairy insurance programs aren’t working, and the trade wars that President Trump started are hurting our dairy industry,” said Senator Gillibrand, a member of the Senate Agriculture Committee. “As the Trump Administration renegotiates NAFTA, I am calling on the Trump Administration to guarantee that any final deal with Canada protects our dairy farmers. In addition, I am calling on the Secretary of Agriculture to immediately release the emergency relief payments that have been authorized for dairy farmers to help them bear the burden of the Trump Administration’s trade war. I will always fight for New York’s dairy industry in the Senate, and I’m going to do everything in my power to make sure that any new trade deals protect our dairy farmers.”

Gillibrand wrote to the United States Trade Representative Robert Lighthizer to ensure that any new trade agreement creates opportunities for dairy farmers. Under NAFTA, American dairy producers have not benefited from fair trade or unrestricted access to the Canadian market for their products. Instead, Canadian dairy subsidies and discriminatory trade quotas restrict New York dairy producers from selling their products to the nearest trade market. Gillibrand called for any final agreement with Canada to prioritize the well-being of dairy farmers, end discriminatory practices, and establish fair trade opportunities.  

Gillibrand also called on the Trump Administration to immediately distribute emergency relief funding for dairy farmers. The U.S. Department of Agriculture (USDA) recently announced $12 billion in assistance to farmers across America. Dairy is supposed to receive an estimated $127 million, but there has been no clear explanation for how or when these payments will be issued. As historically low dairy prices and the Administration’s trade war continue to force dairy farmers to shoulder increasing amounts of debt to continue operating their farms, Gillibrand called on the USDA to issue these payments immediately to help keep farmers out of bankruptcy.

The full text of Gillibrand’s letter to U.S. Trade Representative Robert Lighthizer is available here, and the full text of her letter to Secretary of Agriculture Sonny Perdue is available here. Both are also included below.

Letter to U.S. Trade Representative Robert Lighthizer:

September 4, 2018

The Honorable Robert Lighthizer

United States Trade Representative

Office of the United States Trade Representative

600 17th Street, NW

Washington, D.C. 20006

Ambassador Lighthizer,

As the Canadian and Mexican governments commit to the final phase of negotiations to modify the North American Free Trade Agreement (NAFTA), I urge you to prioritize the interest and well-being of the American farmer in any final agreement. In particular, our dairy producers, who have never realized the benefits of truly fair trade and unrestricted access to the Canadian market under the current iteration of NAFTA, must be given every opportunity to export their products and compete on fair terms. You must not leave them behind.

Nearly a quarter century has passed since NAFTA entered into force and many US farmers have benefited as export opportunities have increased to $21.2 Billion in Canada and $19.2 Billion in Mexico. American dairy producers have realized significant benefits in the Mexican market, which has become the largest export market for US dairy products and in the past year alone, cheese exports have grown 8 percent to $391.6 million. In contrast, US cheese exports to Canada languish at less than $70 million, falling three percent in the past year. This is directly attributable to Canada’s maintenance of high above quota tariffs and other discriminatory practices that shield their producers from competition and exclude American dairy products from their market.

It is paramount that any trade agreement that succeeds NAFTA include the following elements in relation to Canada:

  • Elimination of tariff rate quotas (TRQs) and out-of-quota tariff rates
  • Prohibition of Provincial policies that thwart the intentions of the negotiated trade agreement such as:
    • The use of food definitions that minimize the ability of processors to incorporate exported US milk products
    • The creation of regional milk pricing systems that artificially minimize or externalize the cost of Canadian produced dairy products
  • Restriction on the use of Protected Geographical Indications (GI) that reduce market access to products with commonly understood names

The urgency of a fair and equitable trade deal for our farmers and producers has become even greater as unilateral actions taken by the current Administration to erect tariffs on non-agricultural imports have moved our trading partners to levy extensive and damaging retaliatory tariffs on US agricultural exports. Our dairy farmers have already suffered four years of low milk prices, contracting global demand, increasing labor instability, and fewer pathways to market the milk they produce. While this trade deal will not solve these many problems, it can improve dairy export opportunities for our producers and help them to survive until we can provide them with the programs, policies, and support they need and deserve.

Sincerely,

Kirsten Gillibrand

United States Senator

Letter to Secretary of Agriculture Sonny Perdue:

September 4, 2018

The Honorable Sonny Perdue

Secretary

United States Department of Agriculture

1400 Independence Ave, S.W.

Washington, D.C. 20250

Dear Secretary Perdue,

In January 2018, the Administration took unilateral action to erect tariffs on non-agricultural imports which prompted our trading partners to levy extensive and damaging retaliatory tariffs on US agricultural exports. Successive rounds of measure and countermeasure have resulted in billions of dollars in losses to our farmers in crop value and future trade opportunity.

While the impact of these tariffs has been felt across all agriculture commodities, dairy farmers were perhaps most vulnerable as these producers already faced four years of persistently low milk prices, contracting global demand, increasing labor instability, and fewer pathways to market the milk they produce. Current estimates show that US dairy exports may drop $115 million in 2018 and $415 million in 2019 as a direct result of tariffs. Farmers would see this in their milk checks as farm-gate prices fall roughly $0.64 per hundredweight below forecasts.

To compensate farmers for a measure of their loss, the President has directed USDA to authorize up to $12 billion in support for producers. Last week, you provided some details on actions USDA will take to address the economic harm to American farmers including programs and payment rates for many commodities.

Without knowing the formula used to calculate payment rates, it is difficult to determine whether or not they are fair and support farmers proportionally. What is certain is that the payments to dairy farmers should be issued immediately. Unlike row crop farmers that must wait to the completion of their harvest to their know yields and prices, dairy producers market their product every day, their production volumes are known, and the price they receive is well documented.

Therefore, I request that you begin distribution of Market Facilitation Program payments ($127,400,000) to dairy farmers immediately, using existing payment mechanisms, to ensure that producers receive payments without delay.

I look forward to your prompt action in this matter to provide dairy farmers much needed, and well-deserved, aid.

Sincerely,

Kirsten Gillibrand

United States Senator