Broccoli Growers Steamed by Mexico
California’s broccoli industry faces worse problems right now than President Bush’s distaste for its product.
Some fear that a plan in Washington to eliminate tariffs on Mexican-grown vegetables will doom much of the Salinas Valley’s traditional production of broccoli and cauliflower. They point out that such processors as Birds Eye, Campbell Soup and Del Monte already have moved plants to Mexico because pay scales are so much lower.
“Everybody who is not down in Mexico now will be down there if they eliminate the tariff,” said Jeff Shaw, vice president of Shaw’s Frozen Food in Watsonville. “They will have no choice.”
Even with the current tariff, 40% of the frozen cauliflower Shaw processed in 1989 came from Mexico. The company expects to import broccoli for selected customers this year.
Eliminating the 17.5% tariff would “make matters worse,” Shaw said. “The 10-year outlook is pretty bleak.”
Companies that have moved at least part of their vegetable processing to Mexico want the Bush Administration to eliminate the tariff they pay to get the processed product back to markets in the United States. Administration trade officials also are looking at tariff reduction as a way to improve relations with Mexico.
California-based growers and processors don’t want tariffs eliminated, but one packer feels that view is going unheeded. Bill Ramsey, a partner in Salinas-based Mann Packing, said he felt after meeting with trade representatives recently that their minds already were made up.
“The government has just put dropping the tariffs on a fast track,” Ramsey said. “They just listened to me very politely.”
Under this fast-track approach, the International Trade Commission issued a recommendation without public hearings and allowed less than a month for written comments to be filed.
“One of our biggest complaints has been that they are trying to railroad this thing through,” said Michael Stuart, vice president of the Western Growers Assn.
When the International Trade Commission made its report public last month, its recommendation to President Bush and the likely impact on imports from Mexico were deleted.
The report did acknowledge that Mexico already has expanded vegetable exports to the United States, partly by borrowing U.S. technology.
“Mexico has the added advantage of adequate low-cost labor and additional land available for expansion,” the report added.
Joe Fahey, president of Teamsters Local 912 in Watsonville, went to Mexico to investigate just how low labor costs are there.
He said Mexicans processing vegetables earn the equivalent of $3 to $4 a day; wages at Watsonville frozen food plants are $6 to $7 an hour.
But broccoli, cauliflower and tomatoes imported from Mexico sell for the same prices in U.S. markets as does domestic produce, Fahey said.
“The Mexican workers say they are getting robbed,” he added.
Fahey estimated that 2,000 food-processing jobs have been lost in Watsonville because of relocations in Mexico. The latest is Green Giant/Pillsbury, which announced in January that it will move its Watsonville production facilities there.
Despite those losses, Fahey thinks vegetable processing can survive in the Watsonville area. He said Mexican workers are increasingly militant in demanding higher wages; the vegetable-growing area around Irapuato faces serious water shortages, and the political situation is less stable than in the United States.
“Although there are tough times ahead for workers, the frozen-food industry and our community, there are plenty of good business reasons for companies to keep their plant facilities here,” Fahey said.
