The Florida Tomato Exchange is making an unreasonable attempt to change the rules of how produce can be sold in order to eliminate its competition and unfairly control the market.
For those reasons the Tomato Suspension Agreement may be about to end, bringing great uncertainty to the tomato market and irreparable harm to U.S. companies, not to mention higher tomato prices for American consumers.
The FTE, in its demands to Commerce, is attempting to take away U.S. buyers’ and sellers’ rights to buy and trade fairly. They demand that U.S. purchasers of tomatoes from Mexico cannot receive adjustments on tomatoes they buy based on the arrival condition of the tomatoes.
This right is codified into U.S. law under the U.S. Perishable Agricultural Commodities Act, which is the foundational law that governs trade of fresh produce in the U.S.
It is a fact of the produce industry that our products are perishable and subject to changes in condition and quality. Product can at times have quality issues that can’t be seen at time of shipment and can even occur at other distribution points. These issues sometimes take days to manifest themselves. The suspension agreement has a mechanism to give buyers and sellers the ability to adjust prices fairly on the final condition of fresh produce when it gets to its destination.
The current rules of the Tomato Suspension Agreement also incorporate PACA principles. PACA’s role in the TSA is to ensure that both parties follow and comply with the method and formulas defined in Appendix D of the agreement. Adjustments are calculated under a very specific formula which has been updated over the life of the agreement and which FTE members themselves have been involved in influencing over the years.
FTE’s demands to take away these protections means buyers will be denied their right to purchase tomatoes at a fair price based on the quality when they arrive at destination.
Instead, buyers would have to reject an entire load of sellable tomatoes because no adjustments would be granted for the small percentage of quality issues that may arise. These loads would have to be returned to Mexico and thrown away, driving up food waste and hitting consumers with higher prices and less choice.
These demands are designed to make it impossible for buyers to source the tomato varieties from Mexico that they prefer.
We are U.S. companies that pay taxes and create jobs for citizens across the U.S. especially in California, Arizona and Texas. We sell some of the best fresh tomatoes grown anywhere, and fortunately we have very few issues upon arrival. However, when something does happen during transit, our customers deserve to fairly negotiate prices adjustments granted to them under PACA.
We deserve the same right as any other U.S. shipper in the U.S. market. We are all U.S. companies that cannot stand by and allow special rules to be created by the FTE for the purpose of manipulating the market to the detriment of all businesses, all buyers’ business, and all U.S. consumers.
There is no basis for requesting this change. There have been no adverse findings by Commerce and no evidence of problems in the market. Simply put, this is just a power grab.
James Munguia is chairman of the Tomato Division of the Fresh Produce Association of the Americas, Nogales, Ariz.
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