Lean times for nation's produce basket

Central Valley grows big crops, but so do new foreign rivals

Farmers in America's major produce aisle -California's mammoth Central Valley - are feeling an unaccustomed economic squeeze.

Overshadowed by the state's energy crisis, farmers here face growing foreign competition, rising costs for everything from labor to fertilizer, and shrinking water supplies. The trends, along with pest outbreaks and regulatory burdens, are reshaping farm economics in the region that has long symbolized America's agricultural prowess. Half of US-grown fruits and vegetables originate here, state records show.

For now, the challenges aren't showing up at the grocery store. But the plentiful crops and low prices that satisfy consumers are forcing dramatic changes in California's irrigated fields and orchards.

Smaller growers are selling their farms. Long-established operations are idling fields, abandoning crops before harvest, or even tearing out trees and vines to shrink harvests and drive prices back up.

"Farmers in all areas of the state are commonly stating to us that this is as bad a time to make a living in agriculture as has ever been in this state," says Steve Lyle, spokesman for the California Department of Food and Agriculture.

Representatives of the state are in Washington this week, lobbying Congress to change the way it parcels out farm aid.

Traditionally, Congress has geared farm aid mainly to the Midwestern Grain Belt.

Congress has approved $60 million in relief for California fruit and vegetable growers.

But California farm groups, holding that the health of the farm economy here is vital to both state and nation, are calling for more attention.

And they are enlisting other Sun Belt states.

As Congress drafts its 2002 Farm Bill, Golden State secretary of agriculture William Lyons has teamed with his counterparts from Florida, New Mexico, Arizona, and Texas to press for more federal cooperation on farm issues facing their states.

In other moves to help farmers here, the California Farm Bureau Federation has formed a Farm Crisis Task Force, and this winter it will launch a "Buy California" campaign to urge consumers to choose state-grown commodities.

"While much of the nation has enjoyed a booming economy the past few years, agriculture has gone bust," says Bill Pauli, the CFBF's president.

Rich harvest, poor prices

A key problem: Commodity prices have been flat or sinking for three years running. Several years of good weather in the state has produced bumper crops.

Overabundance of items such as raisins, peaches, apricots, and pears have depressed prices while filling storage facilities.

Coalitions of prune, raisin, and other growers have pooled resources to pay colleagues to destroy crops to shrink harvest quotas and stabilize prices.

Prices for commodities from tomatoes and lettuce to oranges and grapes have dropped so low that many smaller growers are either leaving the businesses or letting fields go unplanted.

"How are tomato prices? Terrible!" says Jeff Fabbri, whose family has farmed here since the 1930s. His biggest problem is the strong dollar. "We depend on exports to take the excess production capacity that we have in the US, but with the strong dollar, it has been tough to be competitive internationally with other countries."

Fabbri's farms have a long record of success in over a dozen commodities, so his troubles highlight the depth of the current challenges.

"Even good, hardworking farmers who have a long record of success through many kinds of problems are really having a tough time," says CFBF's Bob Krauter. "This indicates to us these problems are real."

The bad news extends beyond the Central Valley.

Northern California's Klamath Basin have had water cut off in favor of allotments to endangered species.

South of the Central Valley, in Ventura County, the once-dominant crop of Valencia oranges has plummeted in value 80 percent in the past two years, at the end of a 30-year drop in acreage to about half what it was in the 1970s. Officials there are worried that if one part of the citrus industry fails, other citrus operations will become fragmented, lose financial support, and fail as well.

Part of the problem for all of California agriculture is increasing global competition and faster of trade.

Import competition

"You can bring a container from anywhere in the world in 2 to 3 weeks. The efficiency of moving things has increased, and agricultural trade is the biggest beneficiary," says Fabbri, who runs a 5,000-acre family farm operation near Bakersfield. He is irked by competition from China, where workers are paid $1 a day, versus the $6 to $8 per hour his field hands get.

"That in effect is a subsidy given by the Chinese government, which we can't compete with."

Other farmers have complained of unfair competition in recent years from countries including Chile, Mexico, and Turkey. Such countries are not saddled by the same stringent health regulations or minimum wages. Apricot sales, for example, have shriveled since 1994 in the face of imports.

Fabbri, meanwhile, worries that many consumers are unaware of farm challenges.

"I just sold a ton of wheat for $105, which amounts to a half cent per pound," he says. "If I were to double my price of wheat, that would not change the price of bread appreciably, yet everyone wants to blame the farmer if food costs go up."

To fight back against the worsening agricultural situation here, officials are asking for market-loss assistance programs, relaxation of trade restrictions of US produce overseas, and tax relief, such as an end to the estate tax, which hurts family farmers.

A bill in the state legislature would require prisons and hospitals to buy California produce if it is available and is priced within 5 percent of the lowest bid.

"The good news about this situation is that farmers are pulling together [to] think about public policies that can really help them," says Daniel Sumner, an agricultural economist at the University of California, Davis.

Too much action might prompt retaliatory measures by other states or countries. But, while he stops short of calling the current situation "critical," Mr. Sumner says urgent action is warranted.

(c) Copyright 2001. The Christian Science Monitor

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