TALKS CONCERN CITRUS GROWERS

Publication: Florida Today
Printed: Wednesday, November 19, 2003
Wrtitten by: Brian Monroe

MIAMI -- Florida citrus-industry officials fear that many of the state's growers will be put out of business if U.S. tariffs on Brazilian oranges are dropped. The tariff issue is one of the points of contention on the table, as negotiations for a free-trade agreement linking 34 nations in the Western Hemisphere officially start today in Miami.

Florida and Brazil are by far the largest citrus producers, accounting for about 90 percent of the world's oranges. At stake for Florida: a citrus industry that has a $9 billion-a-year impact on the state's economy, employs 90,000 people and is second in importance to tourism, according to the Florida Department of Citrus.

"The goal of a free-trade agreement is to increase competition and decrease costs to consumers," said Andy Levine, chief executive of Florida Citrus Mutual, a trade association that represents 11,000 Florida citrus growers on issues affecting their business.

" But, because there are only two competitors in the citrus industry, if you eliminate the tariff, Florida growers will be put out of business," he said.

In effect, the citrus industry's argument is that, with no tariff on Brazilian oranges and juice, that nation's growers could undercut Florida growers on prices, putting many of them out of business.

"Then, it would be a monopoly, and Brazil could set any price they want to," Levine said.

How the Florida citrus industry is affected by the proposed Free Trade Area of the Americas agreement is just one of many issues that have brought thousands of protesters to Miami from throughout the country and abroad.

FTAA representatives said if the agreement passes, it could create thousands of jobs and add billions of dollars in revenues by creating a $13 trillion market with 800 million potential consumers.

Those in the citrus and sugar industries and labor unions, however, disagree, and contend that thousands of jobs could be lost if tariffs are removed or large corporations move operations out of the country in search of cheap labor.

Locally, the Indian River Citrus League, which encompasses six counties from Palm Beach to Daytona Beach and includes Brevard, represents roughly $2 billion a year in orange and grapefruit sales. The industry employs 2,000 people in Brevard alone.

The main argument Levine has heard so far from FTAA representatives is that, by allowing free trade among countries, "in the big picture, all boats would rise" on a wave of higher trade-related revenues, he said.

But, he added, that doesn't include the citrus or sugar boats.

"Our situation is unique, and should be treated as such," said Levine, who has been attending the various meetings in Miami on the free-trade issues and doesn't like what he is hearing. "If Florida growers can't compete, it would be a monopoly. We aren't going to 'take one for the team' for anybody."

Still, some experts say that the citrus and sugar industries might find themselves outnumbered in the trade talks.

Roughly 80 percent of U.S. international trade is in manufactured goods, while less than 10 percent is agricultural, according to the Washington-based National Association of Manufacturers, the nation's largest trade association.

" We have testified to Congress we think the FTAA should go forward in as ambitious a form as possible," said Scott Otteman, the National Association of Manufacturers international trade policy director, who is in Miami for the conference. "It could have the benefits of tripling U.S. exports to South and Central America within 10 years."

He disagrees with protesters who said free trade would mean a huge loss of American jobs, adding that, according to research through the U.S. Commerce Department, there are more than 1,200 jobs created for every billion dollars of exports.

Of course, there will be "some dislocations" of jobs in certain industries -- like citrus -- Otteman said, but "we shouldn't let the few losers hold up the whole progress for the rest of our economy."

If Brazil is allowed to have its tariffs lifted, it would be a "statewide catastrophe," said Doug Bournique, executive director of the Indian River Citrus League. "Citrus is grown in 26 counties in the state of Florida. It is critical for us to maintain a strong economically viable orange industry."

For example, Bournique said those employed in citrus are 20 percent of the work force in Indian River, Martin and St. Lucie counties, and has an economic impact "just as big as tourism."

Bournique is in constant communication with state citrus officials in Miami, and he said he has gone to Washington several times before the FTAA meeting to make sure policymakers understand the concerns of the citrus growers, packers and producers.

In Brevard, Bournique said there are more than 14,000 acres for the 150 area growers who employ 2,000 people.

For local grower Jim Harvey, the lifting of tariffs would "make the Florida market less desirable. The citrus processors won't give you as much for your product because they can buy imported at a cheaper price."

"Brazil is making a lot of money, and it's hard enough to compete now for Florida growers," said Harvey, vice president of Harvey's Groves, with stores in Rockledge, Melbourne and Cocoa Beach. "Without the tax, it would mean significantly less money for growers. That would be terrible."

With bumper orange crops and falling prices, Harvey said he doesn't sell to juice producers, but rather focuses on the "gift-fruit" market, advertising that his oranges and grapefruit are handled with more care, thus resulting in better-tasting juice.

Still, if "concentrated-juice prices in the store fall to a ridiculous amount, people might stop buying my juice," Harvey said. "It could really affect us."

If tariff restrictions are lifted, the "effect will be felt on Brevard's indigenous citrus industry," said Lynda Weatherman, president and chief executive of the Economic Development Commission of Florida's Space Coast." The produce brought in will directly compete with local farmers, and, as
such, may eliminate jobs locally and have a direct . . . impact on Brevard's economy."