Old Mission Peninsula cherry farmers got a bit of good news last week, when the U.S. Department of Commerce (USDC) issued a preliminary determination regarding claims that Turkey has been flooding the U.S. market with highly-subsidized dried tart cherries.
In response to a lawsuit filed with the International Trade Commission (ITC) by the Dried Tart Cherry Trade Committee in April of this year, the ITC announced preliminary tariffs aimed at curtailing cheap imports that take business away from local cherry farmers.
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The Dried Tart Cherry Trade Committee consists of five U.S. processors: Cherry Central Cooperative and Shoreline Fruit LLC of Traverse City, Graceland Fruit Inc. and Smeltzer Orchard Co. of Frankfort, and Payson Fruit Growers Coop of Payson, Utah.
Turkish Imports Priced Four Times Less than U.S. Cherry Farmers
According to a Michigan Farm News story dated Sept. 24, 2019, an investigation by the USDC and the ITC found that “Turkey had been exporting its dried tart cherry product for roughly 89 cents – approximately four times less than what U.S. growers are marketing their product at wholesale.”
The determination involves antidumping and countervailing duty laws, which provide American businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of the unfair pricing of imports into the United States.
“Foreign companies that price their products in the U.S. market below the cost of production or below prices in their home markets are subject to antidumping duties,” notes the Michigan Farm News story.
“Companies that receive unfair subsidies from their governments, such as grants, loans, equity infusions, tax breaks, or production inputs, are subject to countervailing duties aimed at directly countering those subsidies.”
Cherry Importers Will Pay
While the determination is just the first step, it will have an impact on cherry farmers on the Old Mission Peninsula and across the United States.
It means that the Department of Commerce can instruct U.S. Customs and Border Protection to begin collecting cash deposits from importers of dried tart cherries from Turkey based on preliminary rates of 540 percent for antidumping and 205 percent for countervailing.
Note that these are preliminary rates; a final ruling is expected by Jan. 21, 2020.
Also, in June of this year, the Michigan Farm Bureau Board of Directors approved a $50,000 Legal Defense Fund grant request from Cherry Marketing Institute, which represents 425 tart cherry growers, to support related legal costs for the trade action.
Tariff Just the Tip of the Iceberg
But OMP farmer Rocko Fouch – who sold part of his cherry farm earlier this year due to increased pressures within the cherry industry – said the Turkish tariff is just the tip of the iceberg, and more needs to be done within the Cherry Marketing Order restrictions established by the 18-member Cherry Industry Administrative Board.
Processors dictate to growers how much of a cherry crop should be shaken onto the ground, diverted at the processing plant, or put into storage for other uses, including establishing new markets, exports, displacement of imports and new products.
Processors also determine how much they may or may not pay for that fruit, as well as setting the price for delivered fruit.
The Cherry Marketing Order expires every six years and is up for renewal in 2020. For more info, read our story about the cherry industry published last month.