As winter approaches, salvaging the embattled tomato suspension agreement is the top priority for Fresh Produce Association of the Americas.
The Department of Commerce had announced in September a preliminary decision to end the agreement. A final decision was expected between November and April. The Florida Tomato Committee prompted the review by asking federal authorities to withdraw from a 1996 anti-dumping duty petition.
“Tomatoes represent one third of the fresh produce that members of my association cross, so it’s a huge interest for me,” said Lance Jungmeyer, president of the Nogales, Ariz.-based Fresh Produce Association of the Americas. “We’re fully engaged in this.”
Direct negotiations were between growers and the Department of Commerce. FPAA is among a group of registered interested parties. So are Bentonville, Ark.-based Wal-Mart Stores Inc. and Mission-based Texas International Produce Association. Jungmeyer filed case briefs for his membership through the Nov. 1 deadline. After 10 more days for rebuttals, the outcome lay in regulators’ hands.
“We’re trying to show that maintaining the suspension agreement is good because it keeps tomatoes in the marketplace,” Jungmeyer said. “It ensures a stable supply for shoppers and retail buyers and a plethora of varieties on the shelves.
“Anything that limits Mexican tomatoes — whether that’s raising the floor price to an unacceptable level or duties that would keep them out — will end up raising prices for retail buyers, for foodservice companies and consumers.”
FPAA argued that public interest in the matter — which regulators must consider — is broad.
“If the Commerce department were to make a decision too heavily weighted on the domestic side, the ramifications would be felt across the U.S.,” Jungmeyer said. “It’s not just a small group of growers — it’s the American consumer, it’s the wholesalers and distributors who deal in tomatoes, and the trucking companies that haul them from the border. It’s the gas stations where those trucks stop to add fuel.”
In mid-October, FPAA offered its support to a proposal from representatives of Mexican growers to raise the floor price of tomatoes 18% to 25%, depending on variety, and include all Mexican growers in the agreement. It was not clear if that would move the dispute closer to resolution.
Reggie Brown, executive director of the Florida Tomato Exchange, told The Packer the suspension agreement remained flawed. However, Jungmeyer said the proposal would increase protection for U.S. growers while keeping prices stable.
Association opposes user fees
The FPAA continues to push for Food Safety Modernization Act funding — but not out of its members’ pockets.
“We keep getting pressure from the FDA for the industry to accept an import user fee,” Jungmeyer said. “We want a safe food supply but that shouldn’t come at extra cost to the industry.”
The funding shortfall for the federal act is around $220 million.
“They’re trying to put that on the backs of imports,” he said. “That would amount to a food tax. If that happens, you will see other countries put similar fees on U.S. goods.
“Now that the government is broke, it’s coming back and saying, ‘OK, business, you can pay more for safety inspections, more customs officers, whatever.’ Use fees seem to be the new trend.”
Imposing the fees would require a vote of Congress. The FDA is trying to build industry support for something like that, Jungmeyer said.
On another policy matter, the Produce Traceability Initiative, FPAA’s concern is less with government than with its members’ trading partners.
“There’s been an incredible buy-in from Mexican growers and their importers to be PTI compliant,” Jungmeyer said. “Everyone’s saying ‘OK, now what?’ Are retailers taking advantage of the information yet? Are they able to do anything with it?
“We really hope it’s not a bunch of wasted money. We hope the retailers are putting in their own. Some really are, but a lot haven’t done anything.”