This year’s Tomato Suspension Agreement (TSA) is still a hot topic of controversy among tomato farmers and shippers from both sides of the debate. In this piece growing companies and shippers who were directly impacted by the agreement explain how the agreement affects their businesses. This week the view of an U.S. grower was reported in this piece one of the growers from Mexico who would prefer to remain private shares her thoughts on the matter.
According to the grower that the roots of the TSA date to the year 1995. The first NAFTA was being discussed as well, and Florida did not support the agreement until an anti-dumping law was issued to stop the import of Mexican tomatoes. “There are a lengthy and tangled history of things that led to the signing of the deal, however much of it gets tied to the politics of bureaucratic game-play,” says the grower. “Whereas the intention behind these agreements of five years is to allow each party time to address any perceived mistakes and to make amends, the TSA continues to be revised, updated, redesigned and made overly complex and so on. There is no conclusion being in sight.”
The heart of the matter
At the core of the deal is in the end, protectionists He declares. “If you look back at reports from the past 10 years, you’ll see that the Florida Tomato Exchange (FTE) constantly slamming their Mexican tomato industry and calling for the abolition of the deal due to a number of infractions,” says the grower. “What isn’t mentioned by the FTE refer to is actual facts or proof that they are claiming to be true.”
Even though the FTE has stated that they intend to end this agreement, the farmer thinks that the intention behind that FTE was to cause life for the Mexican increasing population more challenging and expensive. “Domestic growers gain greatly by the arrangement in that they get a floor that covers 80 percent of their product sold on the market which improves the demand for their product. Florida farmers complain over alleged efforts to market their products below the floor price. But, they’re not governed by this cost and typically sell lower than the floor and, in the end, at losing money, and blaming the Mexican industry for their troubles,” he says.
What is not discussed is the fact that American farmers face endless challenges related to labour. “Plainly said, there’s no legal workforce to meet the demand. The result is that crops are without harvesting regardless of the market condition. This is a real issue. They are however not connected to any events occurring in Mexico or anywhere else,” he says.
Consequences of the contract
The threat that the agreement could be canceled is a major threat to the Mexican sector, as that it could unilaterally and quickly modify the business model of the sector for everyone concerned, including importers, farmers and distribution companies. “Upon termination, the duties will be in effect immediately in the amount of nearly 21 percent of the ad valorum amount to be paid by the importer record at the time of entry into the products,” says the grower. “That will be millions of dollars accumulated in cash that isn’t returned but could in fact upon review, rise in retroactive effect,” he says. This could quickly and easily cause the bankruptcy of many companies, and force the bulk of the tomatoes in Mexico. Costs for tomatoes could rise for the consumer, possibly so much that the retailers could restrict their options significantly or they did not eliminate tomatoes altogether.
A different part of the puzzle which is frequently neglected is that in the end consumers are driving changes within the market. They want flavor consistent, consistency, and uniformity with respect to supply. Every new hurdle that the FTE is trying to set into place, the vast majority of imported products have met the task and produced superior quality and better tasting tomatoes. The farmer says he does not intend to discredit the local sector, as certain varieties have developed also, but the gassed-green tomatoes aren’t up to the standards set by the majority of people.
And where do we go from here? the situation? A renegotiated deal could be in the works. “Florida may demand increases to the price of floor space, as well as more rigorous sanctions The only certain winners will be the attorneys,” he says. He gives an example how the previous agreement imposed obligatory USDA inspections of quality at the time of the entry of the farm. “Last I looked the rate of passing these tests was close to 99.5 percent,”” stated the farmer.
Image: Dreamstime
Source: The Plantations International Agroforestry Group of Companies