Trade decision unhealthy for tomato industry - The Packer

Trade decision unhealthy for tomato industry

10/05/2012 10:08:00 AM
Lance Jungmeyer

Lance Jungmeyer, Fresh Produce Association of the AmericasLance Jungmeyer, Fresh Produce Association of the AmericasFlorida has showed once again that politics trumps the needs of U.S. consumers and buying organizations.

On Sept. 27, the Department of Commerce announced its intention to scuttle the 16-year tomato suspension agreement that has provided stability to the marketplace.

In a flurry of letters in mid-September, congressmen from the important swing state of Florida demanded that the Department of Commerce immediately terminate the agreement and anti-dumping investigation.

Florida didn’t get all it wanted, but it has set the stage to get what it wants.

While the suspension agreement has been in place, Mexico’s tomato industry has made great strides in producing tomatoes that consumers want and crave.

Supermarket shelves have abundant varieties, from cocktail tomatoes to tomatoes on the vine, from multicolored heirlooms to pear-shaped varieties.

Using sophisticated seeds from U.S., Israeli and Dutch seed breeders, Mexico has even been able to improve the shelf life and flavor of standards such as romas and round field tomatoes.

Meanwhile, Florida largely relies on old technology — picking tomatoes green, storing them for long periods and gassing them with ethylene to turn them red, but not really ripe.

Shoppers are wise to this and have been bypassing Florida tomatoes, which is the real reason for the amazing growth in Mexican tomato volumes.

The announcement by the Department of Commerce potentially paves the way for Florida growers to achieve their goal — to file a new anti-dumping suit and effectively block Mexican tomatoes from the market.

These growers stand to reap huge financial gains by cornering the winter and early spring tomato market — at the expense of U.S. consumers.

Florida claims that 80 U.S. growers represent 90% of the U.S. production, and that this is basis enough for terminating the agreement. The Department of Commerce decided to ignore refuting evidence from the Mexican growers, and rushed its decision.

What this whole case boils down to is a select group of U.S. growers using protectionism to cut their competitors’ throats.

The building pressure from the Florida industry and its congressional delegation the closer we get to election day has been wholly inappropriate.

The Fresh Produce Association of the Americas sent a letter to President Obama stating as much, but unfortunately we were ignored.

So were the 370 other letters from U.S. entities stating that they preferred the stability that the tomato trade pact has brought to U.S.-Mexico relations.

Wal-Mart, the Food Marketing Institute, the National Restaurant Association, the U.S. Chamber of Commerce and many others stated that terminating the suspension agreement and potentially opening a new anti-dumping suit was bilateral trade suicide.

Yet here we are.

During the 16 years the suspension agreement has been in place, the Department of Commerce has never shown Mexico to have violated any provision of the agreement.

Now, the Commerce Department will be taking in more factual information and case briefs, and then will begin considering all the evidence 40 days after the notice was published in the Federal Register on Oct. 2.

There is an easy way to get past the rhetoric and politically motivated calls to circumvent the rules.

Mexican growers have presented a very strong suspension agreement enforcement package to the Department of Commerce.

The department should take the required time for the final determination in the changed circumstance review and instead use the time to negotiate with the growers.

Under normal procedures for considering a change in international pacts such as the tomato agreement, the Department of Commerce has 270 days to issue a decision.

The final decision on terminating the agreement must not be rushed, such as the preliminary decision was in a few short weeks, allowing Florida lawmakers and the Obama administration to make political hay before election day.

Terminating the agreement would be disastrous. Doing so would mean U.S. retailers, foodservice buyers and consumers would pay more for decreased variety and volume of tomatoes.

For the health of the tomato category, this would be the worst possible outcome.

Lance Jungmeyer is president of the Fresh Produce Association of the Americas, Nogales, Ariz.

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florida  |  October, 08, 2012 at 10:03 PM

There were a lot more Florida tomato growers until NAFTA cut them off at the knees. US growers cannot compete with 7 dollar a day wages. It's only a harvest of shame when it is in our backyard and not theirs.

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