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FLORIDA
FARMERS INC.
IMPLICATIONS FOR THE AMERICAN CONSUMER Florida farmers have, at times felt that the winter vegetable market in the U.S was being affected by the systematic importing of Mexican produce at artificially low prices. The “dumping” of winter vegetables is not only seen in the financial crunch experienced by the farmers but also in the Department of Treasury Documents. Under six methodologies utilized by the Department, dumping margins were found for each of the five winter vegetables in 1979. The annual decrease in Florida market share had had a serious effect on the domestic farm economy. In 1964, approximately 900 commercial vegetable farms were in operation in Florida. Today, approximately 200 farmers are in business. The loss of a domestic markets share by an America industry to the industry of another country brings an economic loss to the United States. In agriculture, that loss is usually permanent. Land that is idle due to inability to produce at a profit will be converted to other uses, usually development. This fact of economic life is vividly demonstrated in Florida. The fast growing South Florida area has many competing uses for land. Florida´s agricultural basin is just a few miles from high rise condominiums, international banks and bustling cities. As Florida grows, agricultural land not in production will find other uses. In the case of the U.S. winter vegetable market, when south Florida stops producing, the U.S. is left without a domestic source of winter produce. Mexico and possibly other Central and South American countries will find the vacuum. As we have experienced with petroleum products, the economic pressure of a foreign freeze of 1989, Mexican tomato prices quadrupled, as there was no other source. Mexico´s total market share for tomatoes, bell peppers, squash and eggplant averaged 57.75 in 1994/95. In1995/96, the market share has averaged 71.14, a significant increase. Tomatoes increased from 42.3 to 62.9%; bell peppers increased from 46.9 to 62.0%. These figures are tabulated from data collected from October 1, 1995 to January 29, 1996. The problem has been further aggravated by Mexico´s peso devaluation, which gave Mexican growers a big advantage over their counterparts in Florida. Mexican produce sale generate U.S. dollars which make any sale attractive. The question maybe whether the Mexicans are in the produce business or the currency business. NAFTA was not designed to correct for such enormous currency devaluations. NAFTA quotas apply to only a limited number of commodities, and the strongest tariffs that could be assigned under NAFTA cannot offset the substantial pricing advantage enjoyed by Mexican producers. Imports of Mexican vegetables have increased in 1995/96 compared to the year before. Mexican growers have boosted shipments of virtually every major Florida winter crop; tomatoes, cucumbers, eggplant, peppers and squash. Early in the 1995/ 96 season, shipments of some commodities were $600 over the same period last year. The result for Florida growers was an equally dramatic collapse in prices. Many Florida producers cannot recover costs of production for their crops. Farmers have suffered losses in the millions of dollars and the jobs of some 20,000 Florida farm workers have been affected. Farm suppliers face financial ruin as the growers go out of business. A report from the U.S. Department of Agriculture stated that its Winter Farm Labor Survey showed 61,800 hired farm workers during the report period (January 7-13, 1996). This is 3,600 fewer workers than in the October 1995 survey, and 6,000 fewer workers than last year. |