April 5, 2013

Homestead tomato growers wary of Mexican competition

The federal government says a new deal with Mexico should help U.S. farmers, but some local growers remain skeptical.

Homestead tomato growers say a trade war with Mexico still threatens to push them out of business, even after recent federal government efforts to help them.

On Friday, the U.S. Department of Agriculture said they agreed to buy an extra $4.5 million worth of domestic tomatoes in an effort to shore up prices. The volume of Homestead tomatoes in the purchase is unknown since farmers have to apply.

The government also signed a deal with Mexico last month setting higher minimum prices. Local farmers think the Mexicans are finding loopholes to sell tomatoes at a loss to destroy U.S. competition.

The dispute already has cost local growers millions of dollars while Mexican farmers have tripled their sales. Marisela Rodriguez, an agricultural worker who has roots in Homestead, said that over the last five years, she has seen many growers in Florida sell their land, while pay for workers has remained “extremely low.”

“It isn’t as easy to find work as it used to be,” Rodriguez said as she cleaned her hands, “but then again, there was a time when my family owned their farm in Guatemala. Everything changes. I have cousins working in Jalisco [Mexico] who have no problem finding work there.”

The Obama administration appears to be siding with Homestead growers competing with cheap Mexicans tomatoes during the winter and early spring harvest, which begins in October and ends in June. The administration and Mexico agreed to higher minimum tomato prices – a step aimed at protecting domestic growers from cheaper Mexican produce.

USDA officials said consumers will see little to no change in pricing. Florida’s tomato industry leaders say this is not enough.

The North American Free Trade Agreement, signed into law in 1994, “has caused at least a dozen growers to go out of business in the Homestead area and four major packing houses have closed,” said Anthony DiMare, of DiMare companies. “This trade agreement has been anything but fair.”

DiMare helps to run the produce business that his grandfather started with his two great-uncles about 85 years ago. He said he has been forced to diversify to survive. The now Homestead-based DiMare is one of the nation’s largest tomato producers. He said their packing and related operations in Homestead employ about 1,000 people.

“The Mexican growers have a very strong lobby and lobbied very, very hard to keep the suspension agreement in place,” DiMare said.

DiMare said he is concerned the new floor prices set in the suspension agreement don’t reflect Mexicans’ real price of production. A few days after the agreement was set, the U.S. Department of Agriculture reported that two-layer cartons of vine-ripened tomatoes from Mexico were $11.95 to $13, up from $8.95 to $12.95 last year.

The U.S. Department of Commerce “cannot determine equity in selling products without knowing production costs,” DiMare said. “The new price increase may not be enough.”

The suspension agreement prevented Florida farmers from pursuing a suit against Mexican growers for alleged unfair trade measures.

DiMare belongs to the Florida Tomato Growers Exchange, a group of growers that since 1996 has been accusing Mexican growers of selling tomatoes for less than it costs them to produce them — in an illegal practice known as “dumping.”

DiMare says Mexican farmers are selling tomatoes grown in greenhouses, which have higher minimum prices under the trade agreement, at prices below the minimum by claiming the produce didn’t come from a greenhouse. The problem is the definition of “greenhouse.” The produce in question is grown indoors with automated irrigation and a heating system. But because these tomatoes are grown in a desert, they need no climate control, so DiMare said the Mexicans claim they’re not really greenhouse fruit.

“The loophole is in the heating requirement,” DiMare said. “Some of them grow in deserts so they don’t have heating systems.”

Mexican growers have denied accusations that they are trying to kill their competition by maintaining artificially low prices and attribute their success to higher quality linked to better flavor.

Farmers in Homestead said the increasing cost of fuel and fertilizers also put them at a disadvantage, and that at some point retailers will have to pass on the cost to the consumer.

“We are all family businesses. Consumers need to think about what would happen if they lost the Homestead area,” DiMare said. “Eventually your consumer prices would go up. It is all about dollars and cents. We cannot allow the continuation of the demise of our industry to go on. Otherwise we are going to be solely relying on food coming from outside the United States.”

Related content



Editor's Choice Videos