September 15, 2000

Vegetable growers face
difficult challenges

With world supply and demand reaching record levels, these should be prosperous days for America’s fruit and vegetable growers.

Unfortunately, many face an uncertain future filled with economic turmoil and potential disaster, according to the American Farm Bureau Federation.

“Up to now, all of the economic indicators for the fresh produce industry have shown a healthy, growing and vibrant industry,” said American Farm Bureau Federation President Bob Stallman. “But, there are storm clouds on the horizon...”

U.S. grower receipts have consistently risen to keep pace with increasing world demand. And retail sales in the United States are expected to increase dramatically over the next five years.

But increased international competition for the same markets, high labor costs and low availability of workers, and increasing regulatory demands could threaten the future of America’s fresh produce industry.

The challenges have reached such levels that fresh produce growers have had to turn to government for assistance in order to survive. In late July, the Senate approved legislation to provide U.S. apple growers $160 million in economic assistance, $100 million in market loss assistance and $60 million in crop loss assistance. The House approved $115 million in economic assistance for apple and potato growers.

“This type of government assistance is unheard of for fresh produce,” said Stallman.

Despite the jump in retail sales, America’s producers are not harvesting the potential profits. The United States reached an all-time high in vegetable imports in 1998. And, the United States, long a net exporter of fruits, is projected to be a net importer in the next two to three years.

“It’s no secret that the world is a much smaller place than it was 25 years ago,” said Stallman. “Advances in transportation technology and genetics have allowed growers in other countries to grow and ship perishable commodities to the United States.

“The transportation and storage technology now exists to allow countries to grow and ship highly perishable fruit to the U.S. during the winter, meaning there is now year-round availability of fresh produce.”

Chile and Mexico have taken advantage of the new market opportunities the United States offers. Chile has nearly quadrupled its apple shipments to the United States since 1990. Avocado imports have more than doubled. And strawberry imports from the South American nation have increased 900 percent.

Labor costs have increased at least $1 billion annually for American farmers since 1994. This hike came at a time when average prices received by growers increased only slightly.

“The concern over wage rates and other labor costs like workers compensation, unemployment insurance and housing requirements would be immaterial if our global competitors also had to comply with a similar set of labor standards,” said Stallman. “The top five U.S. importers of fruit—Mexico, Chile, Costa Rica, Honduras and Guatemala—have no corresponding set of labor requirements or costs.

“And China, the largest importer of apple juice concentrate, has no applicable corresponding labor standards as well.”

Stallman also fears a massive shortage of farm workers could be “right around the corner.”

Increased regulatory costs, such as farmers meeting Food Quality Protection Act requirements, also are taking their toll on America’s fruit and vegetable producers. FQPA was passed to regulate the use and registration of pesticides.

“Fruit and vegetable producers stand to lose the most from FQPA impacts,” said Stallman. “The loss of key groups of pesticides will especially hamper U.S. producers.

“These are just a few of the issues impacting the health and economic viability of America’s fruit and vegetable producers,” said Stallman.

Farm Bureau has spelled out some solutions to many of the challenges facing America’s fruit and vegetable growers, including:

• Agriculture needs a legal, stable and affordable workforce.

• Producers must have access to safe, effective and economical crop protection products. Therefore, the FQPA and the Environmental Protection Agency’s implementation process must be fixed to provide growers with long-term assurances that they will be able to produce crops that meet consumers’ quality demands.

• Growers need effective and affordable risk management programs.

• Future trade negotiations must address inequities, such as the use of subsidies, as well as recognize the difference between U.S. environmental and labor standards with those of some of our primary competitors.