Subsidies by European peach growers have not only pushed California growers out of overseas markets but now are pricing them out of their own market, according to the head of the California Canning Peaches Assn.
“Our competitors are selling in our market at 17% to 21% below our price,” said Ron Schuler, the association’s president.
Schuler described the peach growers’ plight to the National Commission on Agricultural Trade and Export Policy last week during a hearing designed to increase the Midwest-oriented commission’s understanding of the trade problems encountered by California’s diverse agricultural industry, which produces more than 250 specialty crops--from avocados to zucchini--in contrast to the bulk commodities more typically produced in the nation’s heartland.
Spanish peaches, landed in New York recently, sold for $15.80 a case, Greek peaches for $14.40, while California peaches cost more than $19 a case--$17 a case in California--despite the state’s higher yield per acre, Schuler said.
The result is that sale of imported peaches increased from barely 16,000 cases four years ago to 1.2 million cases last year. At the same time, he added, California’s export of peaches plunged from 1.9 million cases to 560,000.
“Your description of your industry’s experience is very similar to what we’ve been hearing from a lot of (agricultural) industries encountered at our field hearings,” Commission President Kenneth L. Bader told Schuler.
The 35-member, privately funded commission was created by Congress last year to develop recommendations for a national agricultural trade policy by next July. Its membership includes representatives of agricultural organizations, members of Congress and three Reagan Administration appointees.
U.S. agricultural exports have slid 18%--more than a total of $36 billion--since 1981’s peak of $43 billion, Bader noted. The U.S. Department of Agriculture estimates that those lost sales, due in a large part to an overvalued dollar, has cost the nation $300 billion in general economic activity.
The USDA recently lowered its estimate of 1985’s export sales to $32 billion, compared to $38 billion last year. Yet, agriculture remains the only area showing a surplus in the nation’s $145-billion foreign trade deficit, observed John Norton III, an Arizona citrus grower recently appointed deputy secretary of agriculture and a commission member.
But unfair trade practices, as well as subsidies and the strong dollar, have hurt California growers too, U.S. Rep. Tony Coelho (D-Merced) told the commission.
“We’re involved in a trade war, but we’re the only one that’s not fighting,” he said. “We in the United States are Joe Nice Guy.”
Coelho said laws governing trade are outdated and their means of resolving trade disputes cumbersome, costly and ineffective. Like the peach growers, whose productive acreage has shrunk by a third in the last few years, the state’s wine makers are finding themselves unable to compete with French and Italian jug wines sold in this country, he claimed, at less than their cost of production. (Europe has a huge wine surplus.)
California’s cannery industry has virtually disappeared because of the inability of the government to remove foreign trade barriers while putting nothing in the way of subsidized imports, Coelho charged.
Either “level the playing field,” he warned, or Congress will retaliate with quotas and tariffs. “A number of our trading partners would back off, if we were tough,” he claimed.
Testimony submitted on behalf of Sen. Pete Wilson (R-Calif.) pointed out that Congress has helped U.S. agriculture price itself out of foreign markets by enacting farm legislation that encourages production for sale to the government rather than to a market. But, he noted, California producers, in contrast to many Midwest growers, tend to support market-oriented farm programs.
Nonetheless, Wilson said in his testimony, “the trade door must be opened. The only question is whether it is to be opened by key or by fire ax.”
Congress continued to wrestle with new farm legislation last week to replace laws expiring at the end of the month.
Jean Marie Peltier, senior policy specialist for California’s World Trade Commission, cited a number of non-tariff barriers that restrict sales of the state’s crops to Japan and, increasingly, to other Pacific Rim trade partners:
- Japan refuses to admit figs because they are treated with potassium sorbate, while admitting prunes treated with the same substance.
- Japanese fumigation requirements virtually destroy avocados and lettuce.
- Because the Japanese have a country-wide ban on a certain kind of nematode, which does not exist in California, the state can’t ship fresh potatoes.