U.S. countervail duty ruling "deeply flawed," say Canadian mushroom producers

The U.S. government is imposing countervailing duties on fresh mushrooms imported from Canada. A preliminary decision will be published in the Federal Register, expected on May 18, and U.S. customs officials will require cash deposits from importers once the determination is issued. The Commerce Department assigned preliminary subsidy rates to specific Canadian producers, including 1.62% for Champ’s Fresh Farms Inc. and 4.97% for Farmers’ Fresh Mushrooms Inc., with 2.84% applying to other Canadian exports. The investigation began after a petition from the Fresh Mushrooms Fair Trade Coalition. U.S. growers allege Canadian producers sell at unfairly low prices due to Canadian government subsidies, causing lost sales, lower prices, and reduced profitability. Mushrooms Canada calls the preliminary conclusion deeply flawed, arguing the rates rely mainly on standard agricultural tax treatment and provincial sales tax exemptions available to farmers generally.

"The U.S. government is imposing countervailing duties on fresh mushrooms from Canada, in a move the Canadian mushroom industry says unfairly penalizes growers for standard agricultural tax rules. As a result of a preliminary decision published this week, U.S. customs officials will begin requiring cash deposits from importers of Canadian fresh mushrooms when the determination is published in the Federal Register, which is expected on Monday, May 18."

"The Commerce Department assigned preliminary subsidy rates to specific Canadian producers: Champ's Fresh Farms Inc. faces a rate of 1.62 per cent, while Farmers' Fresh Mushrooms Inc. has been hit with a 4.97 per cent rate. All other Canadian exports are subject to a rate of 2.84 per cent."

"The investigation was triggered last year by a petition from the Fresh Mushrooms Fair Trade Coalition, which represents around half a dozen mushroom producers-mostly based in Pennsylvania, where the majority of U.S. mushroom production has traditionally happened. The U.S. mushroom growers allege Canadian producers are exporting fresh mushrooms at prices below fair value due to subsidies from the Canadian government, and that this has resulted in lost sales, depressed prices, and declining profitability for U.S. producers."

""The overwhelming basis for the preliminary CVD (countervailing duty) rate appears to be mainstream agricultural tax treatment, including provincial sales tax exemptions available to farmers generally," says Ryan Koeslag, executive vice-president and CEO of Mushrooms Canada. "Treating broad-based agricultural tax measures as unfair subsidies is contrary to common sense and unfairly penalizes Canadian mushroom growers for participating in programs available across the agricultural sector in any number of countries.""

Read at Realagriculture