Farmers say tomato trade is ripe for change

Tony DiMare, a third-generation Florida tomato grower, has spent two decades contending with cheap Mexican imports, watching his neighbors abandon crops in their fields and sell off their farms when they couldn’t match the price of incoming produce.

But emboldened by the Trump administration’s hostility toward foreign trade, DiMare and a group of Southeast growers are pushing for tough new protectionist measures against their Mexican rivals — so tough, in fact, that their demands threaten to wreck the negotiations.

“I’m all about free trade, but it has to be fair,” DiMare said. “It’s Americans first now, right?”

As the United States, Canada and Mexico prepare to wrap up a fourth round of talks about revisions to the North American Free Trade Agreement, there is growing fear that the talks could collapse around one of several “poison pill” provisions.

Those include the Florida tomato growers’ demands, which are supported by some berry, melon and pepper producers, for stronger anti-dumping measures — an idea that has been soundly rejected by the Mexicans.

The Florida growers’ highstakes campaign for special antidumping measures for seasonal produce has also exposed sharp divisions with the rest of America’s farmers, who are generally strongly pro-NAFTA and whose

livelihoods are on the line if the negotiations falter.

“There’s a lot of political power resting with a small group of individuals who have a lot to gain,” said Joseph Glauber, a senior research fellow at the International Food Policy Research Institute and the former chief economist at the Agriculture Department. “Unfortunately, the special provision you carve out for one interest groups can really backfire for others.”

Agriculture is one of the sectors with the most to lose should NAFTA fall through — in large part because the trade deal gave farmers so much.

Between 1993, the year before NAFTA went into effect, and 2016, U.S. agricultural exports to Canada and Mexico shot up by more than 400 percent, from $8.9 billion to $38.1 billion. Mexico and Canada are now the principal foreign markets for such U.S. commodities as corn and soybeans, apples and high-fructose corn syrup.

Those benefits have generated strong support for the trade agreement among farmers and ranchers over the years — and anxiety at the prospect that it could come to an end.

“The words we didn’t want to hear, in farm country, were ‘Terminate NAFTA,’” said Chad Hart, an economist at Iowa State University who focuses on grain markets. “Maybe ‘readjust,’ maybe ‘renegotiate.’ But you’re talking about two of our three largest agricultural trading partners — it’s never ‘terminate.’”

But not all farmers have seen those gains — and some, including Florida tomato growers, argue they have lost out because of competition from producers who enjoy lower labor costs and a better growing climate.

The problem, in a word, is humidity. Florida has a lot of it. As a result, its growers can’t use greenhouses, which better protect the vegetables, and they have severe problems with pests and diseases.

When you buy an industrial Florida tomato, it has been grown outdoors in a field, harvested green, and ripened near the grocery store with ethylene gas. Mexican tomatoes, on the other hand, are largely vine-ripened and grown in greenhouses.

Florida growers say these aren’t the only things separating them from the Mexican competition. Farmworkers’ wages in the United States are far higher, as is the cost of meeting government regulations. And the Mexican greenhouse industry has only taken off, they argue, because the state helped subsidize it.

As a result, growers say, dozens of Florida farms have closed, and the number of acres planted in tomatoes in the state has fallen by half since its high in 1989.

“That, to me, draws the clearest picture,” DiMare said. “When you look at the disadvantages we face, how do you expect the domestic industry to survive?”

Tomato growers have suggested a series of remedies to stem their losses.

In 1997, the countries agreed on a minimum price for Mexican tomatoes.

Now U.S. tomato growers’ demand to make it easier for regional producers to bring anti-dumping complaints could become a stumbling block in the NAFTA negotiations.

Under current rules, farmers can file dumping cases only after demonstrating damage to their entire industry across multiple seasons. The U.S. proposals would make it possible for smaller groups of producers to bring complaints, effectively increasing the number of anti-dumping cases and the chance that U.S. growers would prevail.

“It’s about fundamental fairness,” said Mike Stuart, president of the Florida Fruit and Vegetable Association, which has lobbied for the measure. “As it stands, they’re sitting ducks for unfair trade practices.”

But some in the industry have described the provision as a backdoor mechanism for putting more tariffs on Mexican produce. Mexican officials have said they will not consider a deal that enhances protections for seasonal growers, criticizing the proposals as “arbitrary” and “against the interests of free trade.”

The provision has also incited tensions across U.S. agriculture, where the general feeling is that Florida growers have put everyone else’s business at risk. The industrywide line on NAFTA has long been “do no harm” — make no changes to the deal that could lead to any agricultural trade restrictions.

But if the seasonality provision makes its way into the final agreement, it could be used against American farmers and ranchers who export to Mexico, several industry representatives said. Targets might include pork producers, who sold 1.6 billion pounds of hams, legs and “off-cuts” to Mexico last year.

There is also growing recognition that American farmers could get hurt if disagreements over the provision cause the United States to walk away from the free trade agreement.

In that case, tariffs for most U.S. agricultural exports would spike — making them more expensive than the commodities on offer from other countries.

Midwestern corn, oilseed and wheat farmers would have the most to lose, said Roman Keeney, an agricultural economist at Purdue University.

The tomato growers’ provision did not come up at this round of NAFTA talks in Washington, according to several people familiar with the negotiations. That will leave the dispute for the fifth round of talks, in late October or November.

DiMare, for his part, isn’t terribly anxious: He says he believes that the Trump administration will continue to push for protections for tomato growers.

Besides, he’ll see benefits regardless of how the provision fares. Like the operators of most of Florida’s largest tomato companies, DiMare doesn’t merely grow tomatoes — he also acts as a wholesaler, sourcing tomatoes from different growers and reselling them to grocery stores and food-service providers.

Some of his product, he admits, comes from Mexico.

“It depends on what customers want,” he said. “For whatever reason, some people want the Mexican tomatoes.”