A landmark tomato agreement has tentatively been reached between the U.S. and Mexico -- a pact that could save tomato farming in Manatee County, growers said Monday.
The U.S. and Mexico mutually set a firm wholesale base price for all Mexican tomatoes coming into the United States, according to the U.S. Department of Commerce.
The wholesale price is set high enough now that U.S. tomato growers can effectively compete, Bob Spencer, president of West Coast Tomato in Palmetto, said Monday.
"It could affect the tomato industry in Florida," Spencer said. "Our acreage for tomatoes could grow and that would be great to see. This is a big day for Florida."
Spencer and other local farmers think tomato prices in grocery stores won't rise much, if at all, due to the agreement.
Spencer estimated that Manatee County has lost 40 percent of its tomato fields in the last decade or so because farmers couldn't compete with lower Mexican tomato prices.
The agreement, which is still in its preliminary stage, essentially prevents Mexican farmers from selling their tomatoes in the U.S. for less than it costs to grow them, said Reggie Brown, executive vice president of the Florida Tomato Exchange.
Mexico's exports of tomatoes to the U.S. reached $1.81 billion in 2011, more than quadruple the $412 million in 2000, officials said.
The U.S. forced Mexico's hand with a combination of diplomacy and the threat of a "tomato dumping" lawsuit, which could have added tariffs as high as $2 or $3 to every box of tomatoes shipped from Mexico to the U.S., Spencer said.
"The facts were there to support our case, so they became reasonable in the settlement agreement," Spencer said.
Mexican officials actually viewed the agreement as a victory for Mexico.
"Congratulations to Mexican tomato producers for the agreement reached and the suspension of the U.S. government anti-dumping investigation," said Mexican Economy Secretary IIdefonso Guajardo on his Twitter account.
The plan is open to public comment until Feb. 11. The agreement will be enforced by agents of the U.S. Department of Agriculture under the Perishable Agricultural Commodities Act.
"We are happy that it is now under the USDA instead of being policed by the Department of Commerce," said Gary Reeder, 59, a Duette farmer who has been growing tomatoes in Manatee County since the 1970s.
A 25-pound box of tomatoes sent to the U.S. from Mexico will now never be sold cheaper than $8.30, according to the U.S. Department of Commerce.
The previous lowest wholesale price was $5.80 per box, Reeder said.
Another way of explaining the difference is that the wholesale price went from 21 cents per pound to 31 cents per pound, Reeder added.
In the past, Mexico would ship tomatoes to the U.S. and ignore any reference points, Brown said.
"They would go way under the $5.80 per box," Reeder said. "There was no floor. Tomatoes would sometimes come across the border with no price. They would take whatever they could get. That was killing us. You can't compete with that.
"If there is a level playing field, I promise you there will be gold stars next to our names," Reeder added.
Hispanic #1 Breaking News for Entrepreneurs, Professionals and Small Business Owners - HispanicBusiness.com
OCTOBER 31, 2014
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