Trump’s policies will shift berry production to Mexico
Two hundred years ago, British economist David Ricardo outlined a theory of international trade based on the notion of comparative advantage. The idea is that each country does something relatively well, and therefore can specialize and trade with others to their mutual benefit.
Economics has since gone well beyond Ricardo’s analysis, but it remains instructive when it comes to agricultural products. That brings me to strawberries.
The red fruit is produced for U.S. markets primarily in two states, California and Florida. In my part of the country, the Southern California coast, I admire the strawberry fields and think, “There is Ricardo’s comparative advantage.” Southern California has a mild climate, moist sea breezes and fertile soil: perfect for growing strawberries.
The climate that makes Ventura County ideal strawberry territory does not end at the Mexican border. On the Baja California coast near San Quintín, you also find strawberries. With the expansion of cultivation in the states of Baja, Guanajuato and Michoacan, Mexican production and Mexican exports have been increasing in recent years.
Both countries are major exporters of the crop. According to the California Strawberry Export Report, farmers in the Golden State exported about $400 million of fresh and frozen strawberries in 2016. Mexico exported approximately the same amount as California.
Here’s where things get interesting. Mexican exports tend to be to the United States; the U.S. exports to Canada and other countries. Why does the U.S. both export and import strawberries? One reason is the different harvesting season in Mexico, and the perishability of fresh berries.
There’s another defining quality of strawberries: They are hard to harvest. You have to stoop down and remove each fruit one by one. Machines would damage the delicate berry and fail to separate ripe from budding fruits. So it is up to people, typically immigrants, to pick strawberries.
According to the Los Angeles Times, a good strawberry picker in Southern California can earn $150 per day during the harvest season. That translates to $18.75 per hour. According to the California Legislative Analyst’s Office, between 25 and 30 percent of all nonstrawberry pickers in the same region earn less than $12.50 per hour. So why are these less well-paid folks not clamoring for jobs in the strawberry fields? Strawberry picking is hard, seasonal labor and must be pieced together with other fieldwork.
In Baja, strawberry harvest workers make much less than they do in Southern California: about $11 a day. So why doesn’t more of the strawberry business move south across the border? The labor price difference isn’t yet so much as to force the move south. Strawberry farms here still can find people to work in the fields. But there is an issue: The people willing to pick strawberries in Ventura County for $18.75 per hour are not Americans. They are Mexicans willing to brave the hazards of living in the United States without legal permission.
The delicate balance that allows both Californian and Mexican strawberry operations to prosper is under pressure. The Trump administration has pledged to deport unauthorized residents. And where more effectively to deploy the limited resources of U.S. Immigration and Customs Enforcement than where there is a concentration of the undocumented: in the strawberry fields?
The immediate impact of deportations will be a shortage of labor. In the short run, California and the United States will have fewer strawberries picked and the berries in the market will command higher prices. In the longer run, farmers either will pay pickers more, or plant crops that can be harvested by machines. The result: even fewer strawberries and even higher prices. And the same people who have been picking strawberries in California still will be picking our strawberries. They just will be doing it south of the border.
The shift of the strawberry business further south should be a boon to Mexican agriculture, food processing and trucking. For the agriculture in the U.S., profits will be lower as land ideally suited for strawberries will be used for feed corn. And, though President Trump campaigned on closing the trade deficit with Mexico, the deportation policy will expand it, as more profits from the strawberry trade accrue to Mexican land barons.
So it is a policy of “pick your poison.” You can engage in mass deportations with consequent lower income for American farmers and their Mexican farmworkers, and increase the trade deficit. Or you can forgo mass deportations, increasing the income of American farmers and their Mexican farmworkers, and keeping the trade deficit with Mexico no greater than it is today. But you can’t do both.
And this is only strawberries. In 2015, Mexico exported almost $22 billion of agricultural produce to the United States. Strawberries are just the tip of the iceberg.