The North American Free Trade Agreement...

But now, since the passage of the North American Free Trade Agreement (NAFTA), their market share is drying up faster than an unwatered plant in the tropical sun. The value of the tomato crop alone, to which Southwest Florida is the biggest contributor, has dropped more than 40 percent, nearly $300 million dollars a year.

Yet, with the learned optimism of farmers conditioned to cycles of freeze and drought, high interest and low land values, they fight on. And, like Davey Crockett and Daniel Boone at the Alamo, their quixotic efforts will be remembered more for the drama of their demise than anything else.

Of the People, and By the People, But Not For The People

"I am by nature an optimist. The industry has some opportunity," says Michael Stuart, president of Florida Fruit and Vegetable Association. He represents the more than 2,200 growers who produce 90 percent of Florida's vegetables.

"But," even he concedes, "you have a competitive situation that is extremely difficult."

South Florida, by nature of its latitude, is the only region of size in this country that can produce a winter crop of vegetables. As such, it has enjoyed a long history of domestic market dominance. But just a thousand miles to its west, Mexico basks under that same warm winter sun.

"The situation is you have a tremendous capacity to produce in western Mexico," says Stuart. "There is lots of water, good soil, and few if any [physical] import barriers."

Before NAFTA, a system of tariffs leveled a playing field that otherwise would have been tilted by regulation in favor of Mexico. Mexican growers have few if any business regulations under which they are required to operate. For example, every chemical fertilizer and pesticide used by American growers on American soil must be approved by the American Environmental Protection Agency. Approved chemicals are most often the most expensive. Generally, growers have no disagreement with using only approved chemicals. According to Stuart, they are committed to preserving a safe environment and producing a safe product.

Although Mexico has tacitly agreed to use only approved chemicals, this agreement is not enforced at the highest levels. And is not respected at the lowest. Thanks to the cheaper, unapproved chemicals they use, production costs are much lower for Mexican growers than Floridian growers.

Labor cost is another significant area in which Mexican growers have an advantage. Labor regulations in the United States require that pickers be paid between $40 and $50 a day. According to industry experts, pickers in Mexico earn less than 10 percent of this rate.

Before NAFTA, fat tariffs on Mexican imports brought the delivered cost of vegetables to about the same as the regulated delivered cost of Floridian growers. But tariffs are going away. "Tariffs are on the gradual road to elimination due to NAFTA," Stuart says. During the next ten years, they will be eliminated altogether.

The Dump Chumps

Add to the absence of regulation on Mexican growers and the decline of compensating tariffs a wild card: the 1995 devaluation of the Mexican peso. Suddenly, without warning, Mexican tomatoes brought only devalued pesos when sold in Mexico. When sold in the north, in Los Estados Unidos, even priced below their cost of production, they brought solid, worthsome dollars. And, if imported in sufficient quantity, they had the added benefit of bankrupting some of Mexico's Floridian competitors.

"In the '95-'96 season, you saw a tremendous increase in all vegetables coming in from Mexico," Stuart says. "There was a lot of blood on Florida's soil." Of course, it is illegal to dump product at lower than its production cost with the intent of driving your competitors out of business. So Florida's embattled industry got right on it.

"The leadership from Florida Department of Agriculture filed trade actions with US Department of Commerce seeking some solutions to the problem," says Stuart. The actions were supposed to determine if Mexican growers were dumping, make them stop, and compensate anyone damaged by the illegal activity. It didn't work out that way.

"We lost it," Stuart says, although some points were ostensibly scored. "The anti-dumping petition resulted in a determination of dumping by Mexico. We were able to negotiate to suspend that." But the suspension was not mandatory. In effect, Mexico only had to say, "okay, we won't do it anymore."

"The suspension agreement is voluntary," says Stuart, "but it sets a floor price [for Mexican tomatoes]. He admits the floor price is lower than the cost of production in regulated Florida. "It won't make any money for people in Florida, but it creates a price that they can't go below."

But if the floor price is still less than Florida's cost, what comfort is to be found for Florida's growers? Little, if any. The prophylactic preset price can bankrupt Florida growers again, anytime the Mexican growers chose to charge it.

"Their own good sense is what stops them from selling at this price," Stuart says, but the good sense of a Mexican tomato farmer is thin protection indeed.

Up a Tree

Not all of South Florida's agribusiness eggs are in one basket. Citrus products account for a large portion of the total revenue. However, the citrus industry is threatened by the same changes affecting vegetables now.

"As it now exists, we are highly competitive," says Ron Hamel of Gulf Citrus Growers Association. "We can, per acre, out-produce them, so we are still the lowest-cost producer." He explains that technology such as computerized micro-jet irrigation provides the current advantage. But, he adds, "There are certain areas they are more competitive than us, say labor. On the harvesting side, they can harvest less expensively than we can because they don't have the same labor regulations."

It is unlikely that Mexican growers will be able to bridge this technology gap anytime soon. Hamel reports that a recent trade mission to Mexico confirmed that growers there have little irrigation at all, not much infrastructure and are not likely to develop any soon. "There are small groves [there], not as well-managed or operated as we are geared to be," he says. The technology is available to them now, he explains, but it's not being used because they can realize no benefit of scale.

This advantage over Mexican growers will not insulate the citrus industry from unfair competition however. NAFTA, governing trade between North American countries, has current affect on trade relationships with South American countries, specifically, Brazil. Brazil is curre