UF Economist Optimistic U.S. Growers Will Get NAFTA Relief

June 14, 1996

GAINESVILLE---A University of Florida commodities expert says he's optimistic the U.S. International Trade Commission (ITC) will give relief to the nation's vegetable growers, hit hard the past two years by surging imports of tomatoes and peppers from Mexico.

Professor John Van Sickle, a food and resource economist at UF's Institute of Food and Agricultural Sciences, said his research also counters opposition claims that bad weather and inferior products are to blame for growers' troubles.

Growers and packers from several states filed a petition with the ITC earlier this year and testified in Washington along with Florida Agriculture Commissioner Bob Crawford last month. The petition was filed in response to the industry's claim that massive amounts of foreign produce have been dumped on U.S. markets, exceeding quotas set forth in NAFTA. The ITC's six- member committee will vote July 2.

"This is a national case, spearheaded by our Florida growers contingent. If we win, not only will Florida benefit, but so will growers from across the country," Van Sickle said. "While we are being cautious right now, I believe the ITC is going to grant us some remedy."

Bernie Hamel, a field representative from the Florida Tomato Growers Exchange, an agricultural cooperative that represents growers and shippers in Central and South Florida, said he was taking a wait-and-see approach.

"Put it this way," Hamel said. "The numbers speak for themselves. This is the best opportunity the industry's ever had to expose Mexican dumping. If we lose, it will drastically change the tomato industry in Florida. It will be like the federal government telling us that they don't want a domestic industry here and saying `we'd rather buy our produce from a foreign country.'"

In the 1995-96 season, U.S. tomato growers suffered sales losses of up to 40 percent, and pepper growers lost up to 70 percent, Van Sickle said. In Florida, where growers supply most of the nation's winter fresh market tomatoes, the industry has been devastated, said Van Sickle, who monitors commodities for UF/IFAS' Market News Service.

Two years ago, before NAFTA, tomatoes were a $700 million industry for Florida with more than 200 growers. By 1995, with the NAFTA provisions in place and a peso devaluation of more than 50 percent, revenues shrank to $400 million and growers numbered less than 100, Van Sickle said.

"NAFTA has really put our industry on its knees," he said. "We did three times the volume prior to NAFTA. At the height of the season this year, we had growers losing $100,000 per day."

Hamel said the problem was not only NAFTA, but a "dumping" issue.

"We object to their bringing in tomatoes and dumping massive amounts of them at below the cost of production just to gain market share," Hamel said. "We think that is unfair."

The main topic in debate at the ITC hearing was not the growers' losses, however. Opponents to the petition told the ITC that domestic farmers were not hurt by NAFTA, but rather by bad weather and a new tomato with an extended shelf life now grown by Mexican farmers.

Van Sickle said UF research has proven those claims untrue.

"Weather was not as big an impact as they were making it out to be," Van Sickle said. "We also have data that shows there was not a shift in demand. Consumers did not want to buy a different type of tomato. Mexican vine ripe tomatoes and Florida mature green tomatoes competed in the marketplace. They aren't different products."

Hamel agreed: "The difference in these tomatoes is essentially hours on the vine. The concept of the `vine ripe' is a gimmick. We pick tomatoes just before the fruit starts to break color; they pick tomatoes just after. Frequently you find tomatoes both ways on the vine."

U.S. growers hope the ITC's remedy will include increased tariffs and quotas on Mexican imports, especially tariffs tied to the value of the products. That way, Van Sickle said, Mexico won't be able to sell for less than the cost of the product.

"A quota also would ensure that they can't supply surges of tomatoes and bell peppers beyond historical averages, meaning no more surges that flood our markets."

The U.S. growers also hope the ITC will help by establishing a credit program for growers who have suffered losses and need help to continue their businesses and by contributing more money for research, Van Sickle said.

"Our industry is so injured that it will be hard financially to continue research that would ultimately help advance technology."

University of Florida

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