Georgia growers fear cheaper Mexican produce will soon devastate their industry

Georgia farmers are increasingly worried that state-grown fruit and vegetables could one day disappear from the produce section because of competition from an influx of cheaper Mexican produce.

Fruit and vegetable growers hope that the negotiation of the U.S.-Canada-Mexico trade agreement would give them another tool to fight plummeting produce prices.

But as the trade deal inches closer to congressional ratification—so far without the trade protections Georgia growers had sought—produce farmers are growing increasingly worried.

“It’s a matter of time, whether it’s five years, 10 years or 15 years, most of our southeastern produce growers are going to either go out of business and sell their lands into development or they’re going to change over and start growing other crops or just retire,” said Charles Hall, executive director of the Georgia Fruit and Vegetable Growers Association, a state produce grower advocacy group.

Since the early 2000s, Mexican produce growers have received government subsidies to build thousands of acres of greenhouses and climate controlled growing areas, allowing them to grow millions of pounds of blueberries, squash, cucumbers and other produce for most of the year.

Mexican growers also face a lighter regulatory burden, enabling them to pay their workers less than their American counterparts, a University of Georgia economic study released in late April found. As a result the Mexican produce exported to the U.S. is often significantly cheaper than produce typically grown in Georgia and Florida.

What’s good for U.S. producers and manufacturers isn’t necessarily good for consumers. The North American Free Trade Agrrement recognized Mexico’s competitive advantage from lower production costs, and it’s meant considerably cheaper grocery prices for U.S. consumers. Similarly, the growth in automobile prices for consumers has been slowed, to the benefit of consumers, with assembly of components in Mexico.

Secretary of Agriculture Sonny Perdue, a former Georgia governor, wrote in an op-ed in May that the study was “flat wrong.” He argued that Georgia’s agriculture output has increased over the past decade, and that Georgia’s farmers could switch to farming more profitable crops.

“Chapter by chapter, verse by verse, USMCA improves virtually every component of NAFTA and Georgia’s agriculture industry stands to gain significantly,” Perdue wrote in the op-ed in the Macon Telegraph and Columbus Ledger-Enquirer.

Some within the Trump administration have told Hall and his association that they’re working on a new solution that could help Georgia produce growers. But they’ve never directly told Hall what that fix could be. Hall said he’s worried the work to get a solution will soon stop.

“At the point that USMCA passes, I got a feeling that that solution work will stop,” Hall said. “I hope not.”

The House has set no timetable for formally considering the USMCA.

In the meantime, Jeffrey Dorfman, a University of Georgia economics professor and one of the study’s authors, saw tough times ahead for Georgia produce growers.

“It might cost a grower in Georgia $14 to produce a box of squash, and if he’s lucky he can sell it for $16. When the Mexican squash shows up they might be sold for $6,” he said, “which either means we’re losing a lot of money on our squash or we’re just letting it rot in the fields, and not even going to pay workers to pick it.”

Hall said growers hoped the U.S.-Canada-Mexico trade agreement, the deal slated to replace the 1993 North American Free Trade Agreement if approved by Congress, would allow southeastern produce growers to file lawsuits against Mexican growers in the U.S. and to push the U.S. government to put tariffs on Mexican produce growers who participated in unfair trade practices.

The original U.S. proposal for the trade deal contained those provisions, but during negotiations in 2017, Mexican officials rejected the provisions, the Wall Street Journal reported.

“The administration worked hard to get that included in USMCA,” Hall said. “I don’t want to give the impression that the administration turned their back on southeastern growers.”

The Trump administration has urged Congress to pass the agreement by the end of the summer, but ratification faces hurdles in the Democratic-run House.

Among those hurdles are lawmakers such as Rep. Austin Scott. The central Georgia Republican is concerned that the trade agreement could be devastating to many of the produce farmers in his Macon-based district.

“It’s the fruit and vegetable guys that USMCA (the trade agreement) hurts,” Scott said. He said he would back the trade agreement if provisions are made to protect his state’s fruit and vegetable farmers.

Scott joined 35 other Georgia and Florida lawmakers signed a letter to U.S. Trade Representative Robert Lighthizer asking him to add provisions to the USMCA to make it easier for farmers to request Washington to put tariffs on specific international products that are devastating their business.

Rep. Sanford Bishop, a Georgia Democrat who also signed the letter, said many of the produce farmers are extremely concerned about the lack of protective provisions for produce farmers.

“They are very very worried about it,” Bishop said of produce farmers he’s talked to. He said he’s going to consider their concerns while he reviews the trade agreement.

“The devil is always in the details and we got to do what we can do to try to make sure that it protects our producers here in America and certainly those in Georgia,” Bishop said.

There’s been no public response to the letter, but Scott said that Trump administration officials are aware of the issue.

At a House Ways and Means committee hearing in mid-June, Lighthizer told the committee that they were looking for a solution outside of the trade agreement that satisfied both the Mexican and American growers.

“I think we have to find some way to help (southeastern produce growers),” Lighthizer said. “There is no question that they are hurting.”

Some economists are not in favor of the protective trade provisions. Economists at the Peterson Institute for International Economics published a piece that argued that protective tariffs would eventually harm consumers and drive prices up.

In the next two decades, many south Georgia counties will see extreme job loss because many farms will close, the University of Georgia study predicted.

“You’ve got a number of small, rural communities that depend on the economy that farms within their communities provide,” Hall said.