N.A.F.T.A.
In East Tennessee, It Isn't All
Bad.
Love it or hate it,
most U.S. vegetable producers have an opinion about the North American Free
Trade Agreement (NAFTA).
Growers in warmer climates like Florida may have reason
to hate it, says Dr. Greg Pompelli, associate professor in agricultural
marketing. But Tennessee producers haven't been affected much so far.
Winter vegetable shippers in Florida, California, Arizona
and Texas are feeling the pressure of increased competition from Mexican
imports thanks to NAFTA, he said. Cost of production is critical, and many
U.S. growers can't compete price-wise in the winter vegetable market. Florida
tomato growers have lost half their market to Mexican producers in the past
couple of years, but part of those losses were weather-related.
That doesn't mean Mexico will continue to make great inroads
in the winter vegetable market, Pompelli explained. Mexican production depends
on irrigation, and their water supply is very limited.
A healthy Mexican economy will also help U.S. producers.
Even though Mexico exports 20 to 25 percent of its four to five-billion
pound tomato crop each year, the largest share is still being consumed at
home. Tomatoes are an important part of the diet there.
"If the economy is strong in Mexico, they'll buy those
tomatoes which won't make it north," he said. "If you've got a
weak economy in Mexico, then consumers can't purchase. And the growers will
ship rather than let them rot."
For Tennesseans, the wait-and-see question is: how will
farmers in the warm-weather states react to their loss of market share?
Will they shift production to later in the year? If so, that would mean
more competition here. Cost of production in Tennessee will be critical,
Pompelli said, because Florida growers are used to receiving the premium
prices that vegetables command in winter. They may not be able to afford
production costs without those higher prices.
The good news is that U.S. vegetable exports overall are
growing faster than production. Canada is our best customer, followed by
the European Union and Japan. But our number-four trade partner is Mexico,
Pompelli said, another NAFTA plus.
Also, U.S. per capita consumption of vegetables is up because
of increased availability of winter vegetables at attractive prices, and
that buying trend could carry over into summer months.
Consumer safety concerns are a plus for Tennessee growers,
he added, because most consumers trust and would rather buy locally grown
vegetables. And that's an edge that Mexican producers can never overcome.
Has NAFTA been good for agriculture overall?
It has increased agricultural trade in both directions
between the U.S. and Mexico, Pompelli said, but it is a very complex issue.
- by Lisa Byerley Gary | 