as you can see with the part near the bottom where i bolded, dumb economists believe in quack theories like america not growing any of its food anymore. there are serious consequences that stupid economists overlook when they have visions of unfettered free markets and maximum efficiency. they are numbers men, who just look at the fact that america can have cheaper orange juice. they really don't care about what it does to local industry, the american worker, or to national security by importing our food from abroad. dumb economists just know that their job won't be affected, they sit high atop their academic perch and preach how the rest of america needs to sacrifice to the slavish devotion of free and open markets in every possible instance.
The big squeeze
Globalization catches up with Florida's citrus belt
tradealert.org
BY JANE BUSSEY
jbussey@herald.com
CLEWISTON - This town that citrus and sugar built seems to have stepped straight out of a movie set from the 1950s. Life revolves around high school football, church bake sales -- and the U.S. Sugar Corp., which manages the orange groves and sugar cane fields that are the mainstay of the local economy.
But globalization is catching up with even sheltered Clewiston. Not only have restaurants like La Azteca and Julio's Cafe Tropical sprung up alongside Wal-Mart, but now a distant threat has emerged.
Under the proposed Free Trade Area of the Americas, tariffs on orange juice could be eliminated, leaving Clewiston's -- and Florida's -- citrus industry vulnerable to stiff, and some say nearly impossible, competition from Brazil.
Unlikely as it seems, this town of 12,000 people, a two-hour drive north of Miami on the southern edge of Lake Okeechobee, is on the front line in the battle over hemispheric free trade.
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The threat to the state's citrus industry epitomizes the critical choices facing communities and countries over deregulated trade. In Florida, where the citrus industry generates $1.6 billion in cash receipts and has an economic impact almost five times that amount, or about $9 billion, it's a high stakes issue. Agriculture is the state's second largest industry after tourism.
The Free Trade Area of the Americas, or the FTAA, is the dream of Miami's trade community; in fact, the goal to have a hemispheric free trade pact in place by the end of 2005 was first announced at the December 1994 Summit of the Americas in Miami. Thirty-four countries in the hemisphere -- all except Cuba -- signed on for negotiating the deregulated trade agreement.
But the citrus industry is front and center in the struggle over trade. A top priority for Brazil is eliminating the tariffs -- import duties countries charge to preserve an industry or help it compete against subsidized competition -- on orange juice concentrate so Brazil can more easily sell to the United States. Without the 29.5 cent per gallon tariff on imported Brazilian orange juice concentrate, Florida farmers fear their industry could simply not compete and a town like Clewiston would suffer.
Wages, taxes and environmental and agricultural regulations make U.S. production more costly. Florida workers earn $60 a day; Brazilian workers earn $60 a week.
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For true believers in free trade, it's a simple matter of letting the cheapest supply have the market. But for many in the Clewiston area, the citrus issue doesn't simply revolve around economics. It also brings into question food safety and security, commercial land development and the rural way of life.
''There is a fundamental decision we have to make: whether we will have food grown in the United States or in other countries,'' Couse said. ``I can't believe our leaders can't see that at some point in this, someone can hold us hostage over food depending on how far we go with free trade.''
But as U.S. trade negotiators frequently remind industries suffering from global competition, trade officials are in the business of negotiating trade deals. Both the textile and apparel industries have witnessed this firsthand and watched as textile mills moved overseas.
This battle over tariffs and market share is fought out at the wholesale level. Anyone expecting much cheaper orange juice if Brazil becomes the nearly sole supplier has only to look at the experience of the Florida tomato industry, which withered under stiff competition from Mexican winter tomatoes without any noticeable relief in tomato prices for consumers.
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The Florida citrus industry tried to drive home these issues in an Oct. 14 meeting with U.S. Trade Representative Robert Zoellick. The Washington official said he was happy to listen, but added: ``At the end of the day, my job is about free trade and open markets.''
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Latin American countries, facing half a decade of low growth, are demanding access to U.S. agricultural markets, with shrill denouncements of U.S. tariffs and farm price supports on the rise.
At a recent trade ministers' meeting in Quito, Ecuador's Foreign Minister Heinz Moeller drew a resounding round of applause when he demanded access. ''Developed countries should open their agricultural markets to underdeveloped countries,'' Moeller said. ``Give us the opportunity now to grow richer.''
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Orange juice futures have dipped as low as 75 cents a pound in the past two years at a time when the cost of production has been closer to $1 a pound, resulting in a money-losing enterprise for orange growers and the processors. Recently orange juice prices have spiked up to more than $1.10 a pound, a price where everyone is making money.
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FLORIDA VS. SAO PAULO
In the battle over tariffs, this global fight is really a competition between two states -- Florida and Sao Paulo, the most prosperous state in Brazil and the location of almost all the country's commercial orange groves.
Brazil and Florida have already come to blows, over the state's 32-year-old equalization tax, a 3-cent-a-gallon charge to Florida and Brazilian growers for orange juice promotion. After five international companies filed a lawsuit because Florida didn't tax out-of-state domestic producers, Florida began levying the state tax on oranges coming from California and Texas.
But there is still friction, with Brazil insisting that it will file a complaint with the World Trade Organization over Florida's tax.
Sao Paulo state, with 1.8 million acres of citrus groves, has more than twice Florida's acreage of 797,000 acres. Together the two states produce 85 percent of the world's orange juice; Florida with 40 percent and Sao Paulo with a 45 percent share. While Florida's production supplies America's orange juice thirst, nearly all of Brazil's orange juice production is exported to Europe and Japan, some $5 billion a year.
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Brazil's costs are lower, according to University of Florida agricultural economists Tom Spreen and Ron Muraro, who estimate production costs are $259.69 per acre in Sao Paulo and $721.68 per acre in southwest Florida, with labor making a large difference. With the recent devaluation of Brazil's currency, comparative costs for the country are even cheaper.
Muraro estimates it costs Florida citrus growers about 99 cents to deliver a gallon of juice to a Florida processor, compared to $1.06 (including the 29.5-cent tariff per gallon) for a Brazilian grower in Sao Paulo.
Without the tariff, he said, ``the cost to the Brazilian to deliver the juice would drop to 78 cents a gallon, giving them a significant competitive advantage.''
Meanwhile, some advocates of deregulated trade propose the United States should do away with growing its own food altogether. California agriculture professor Steven C. Blank wrote The End of Agriculture in the American Portfolio in 1998, forecasting that in 50 to 100 years the American agricultural industry will be gone; growing fields churned under to make way for condominiums, golf courses and shopping malls. It is a future that Blank endorses.
But Mark Ritchie, president of the Institute for Agriculture and Trade Policy in Minneapolis, said the public and policymakers must think before eliminating tariffs that keep industries in business.
''Any proposal to vastly increase U.S. imports in anything has to be analyzed in its impact on the environment, trade deficit, family income and farm families,'' Ritchie said.
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''When you import your food, you are both stealing your food from some place else, and once a year or twice a year you get a disruption: a longshoremen's strike, an E.coli outbreak or whatever,'' Ritchie said.
Finally, some areas, such as South Florida's wetlands, are too environmentally sensitive to withstand a massive influx of condominium communities.
UNDER PRESSURE
''They [citrus growers] are in a state under tremendous pressure,'' Ritchie said. ``Their only option would be to turn that land into development. Two hours out of Los Angeles and San Francisco is considered bedroom communities.''
Despite the clamoring for access from the developing world, developed countries, such as Japan and European nations, have insisted that maintaining a robust rural life is a matter of cultural preservation that is not up for negotiation.
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While experts say growers could turn into land developers, dwindling production would affect Mexican and Central American migrant workers who arrive in the town in the fall to pick oranges and vegetables.
''This is the only thing I know how to do,'' said 27-year-old Miguel Castillo, who sends $1,000 a month to his family in Puebla, Mexico.
Everyone agrees that any decision to do away with citrus tariffs will be as much about election politics for President Bush as about economics or deregulated trade. Some observers count on the president not wanting to inflict a major blow on an industry in a state governed by his brother Jeb. But the United States will have to make some concessions if it wants the FTAA.
Political decisions are likely to leave one side fuming. For Brazil, agricultural access is a deal-breaker in trade talks. For Clewiston, the issue is about the life and death of rural Florida as town residents know it.
''It's just hard to believe we would do away with agriculture,'' Couse said. ``This whole [middle] South Florida economy is agriculture.'' |
