Many Citrus Firms Still Shut Out by Japanese : Produce: Most resume business as usual. But those in quarantine zone remain blocked from key markets.

With the threat of a Japanese boycott of Ventura County citrus products all but past, most growers and packinghouses outside the county’s Medfly quarantine zone returned to business as usual this week.

But with one-third of the county’s citrus grown within the 86-square-mile quarantine zone, a substantial amount of produce is still shut out of the lucrative Japanese and Pacific Rim market.

And some packers, including Paramount Citrus in Oxnard and three others that are now handling exclusively quarantined fruit, will not return to normal operations until the quarantine is lifted, probably sometime next year.

“We’re now a quarantine house and will handle only fruit destined for the domestic market,” said Jim Finch, director of lemon operations for Paramount Citrus. That alone will cause some loss in income because the foreign markets pay a higher price than domestic buyers do.

In addition, growers from the San Joaquin and Coachella valleys that sent their fruit to the Paramount house for packing and shipping are now using other packinghouses for the fruit they send overseas.

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“Those growers no longer want to send their fruit here since we can’t pack it to send it to Japan,” Finch said. “It’s lost opportunity, lost volume.”

With the designation of 86 square miles from Camarillo to Thousand Oaks as a Medfly quarantine area, Sunkist Growers Inc., which represents almost 900 growers in Ventura County, designated four of the county’s 15 packinghouses as handlers of exclusively quarantine fruit.

That assures Japan, as well as other export and domestic markets, that there is no possibility that an infestation could be transported to their regions.

It also means that some growers and packinghouses will lose from the quarantine, while others will gain, said Ventura County Agricultural Commissioner Earl McPhail.

“Yet they are willing to cooperate for the good of the industry,” McPhail said. “It’s a major milestone, and that’s what it takes to get through this.”

Japan and other Asian markets, which typically buy the highest quality fruit for about 10% more than the domestic market pays, will not accept any fruit from the quarantine zone. But other states across the country and Canada will take quarantine citrus because they do not consider lemons a host to the Medfly.

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For years, growers and packers have tried to create new markets outside the Pacific Rim and inspire new uses for lemons at home. But they have found the lemon market a tough one to expand.

“The consumer is only going to use a quarter of a lemon in iced tea or a squeeze over fish,” Finch said. “Mothers don’t put them in their kids’ lunches for school.

“Japan is one of the few places in the world that doesn’t grow its own fruit that we still have access to.”

Growers and agriculture officials were worried that Japan and other export markets would close off the entire county for fear of infesting their own citrus industries. But as long as no new Medflies are found outside the quarantine zone, Japan will accept fruit from the rest of the county, officials said.

Foreign markets, with Japan leading the way, last year imported about one-third of the $260-million lemon crop grown in Ventura County.

“The other countries are highly influenced by what Japan does,” said William Quarles, vice president of corporate relations for Sunkist. “Japan is Sunkist’s most important export market, accounting for 40% of the exports.”

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In addition to Japan, the other three top export markets are, in order of volume, Canada, Hong Kong and Singapore. Other importers are South Korea, Australia, Indonesia, Malaysia, Taiwan and Mexico.

The overseas markets are important in part because Japan and the other importers pay more for their fruit from Ventura County’s packinghouses than the domestic markets do. After trans-oceanic transportation costs are added, the Japanese consumer pays about 50% more in the supermarket for a lemon than a U. S. customer pays.

But they are also important because the amount of trees planted and grown is based on the number of lemons that can be sold in the United States and abroad.

“A lot of lemons are planted with Japan in mind,” Quarles said. “So the plantings were made in light of a demand that greatly exceeded the domestic market demand.”

Although citrus planting in Ventura County dates to the missionaries of the 1800s, the Japanese market did not open until the early 1960s when the country first liberalized its imports, Quarles said.

Before that, Japan was still operating under protectionist policies of the post-World War II era in an attempt to rebuild the nation’s economy.

“Japan did not produce lemons, and they went very well with that country’s cuisine,” Quarles said. “They tried to grow lemons for a while, but they didn’t do well there because of the climate. They just couldn’t grow a good lemon.”

At about the same time that the Japanese market and other Asian markets opened up, the European market began to shut down. Until then, the European Community had taken about one-third of the county’s citrus exports.

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“But then the EC put on a discriminatory tariff,” Quarles said. “They were charging us 20% tariff on oranges that went into Europe and at the same time they were charging other countries far less.”

Quarles said that tariff, combined with the escalating cost of transportation, pushed Sunkist and other U. S. packers out of that market.

“So we were very fortunate that Japan and the Orient were opening up for us,” Quarles said.

Citrus, he said, was one of the few commodity groups that had alternative markets.

“There was a horrible recession in agriculture during the mid-1980s,” he said. “Farmers were shooting themselves. But the California-Arizona citrus industry was one of the few that maintained a stable economic base during that period.”

While the export markets do create a dependence on foreign countries for economic well-being, the agriculture industry has no choice if it is to continue to thrive, Agricultural Commissioner McPhail said.

“We’re dependent on all our markets, domestic and foreign,” he said. “We can’t limit our markets by cutting out whole sections of the world.”

He said Sunkist and other cooperatives are constantly trying to reopen the European market. But the European Community requires member countries to buy from each other before they look to outside markets.

“It’s not just economics and productions,” McPhail said. “It’s a matter of politics as well.”

Growers and shippers are now working with the European Community, Russia, Eastern European countries, Mexico and Central and South America in attempts to open up trade.

“The agriculture industry is always looking to expand our markets,” McPhail said.