Local citrus growers fear free trade pact

It's what he knows. It's what he loves.

It's what he's counted on to help support him in retirement from a local citrus consulting job.

But now George Austin, a 66-year-old second-generation citrus farmer in Southwest Florida, questions his future. He wonders whether he soon will be forced to give up the roughly 200 acres of groves he owns in Lee and Hendry counties.

He's concerned because of a push by Washington to finalize what's known as the Free Trade Area of the Americas agreement. The next five-day round of meetings on the agreement, which would establish the largest free trade region in the world, begins Monday in Miami. The goal is to put the agreement into effect by January 2005.

While the agreement is at least a year away, Austin fears he could be one of the first victims of the $13 trillion trading bloc it would create.

The FTAA would integrate 34 countries and remove impediments to market access for their goods and services in the Western Hemisphere, excluding Cuba. To Austin, that means a citrus tariff charged on Brazilian juice imports could be lifted.

He said the tariff is the only thing keeping his small groves alive.

At the free trade talks, a battle brewing over the citrus tariff charged on Brazil's juice and other agricultural concerns is expected to take center stage. Florida's citrus producers want to keep the tariff. Brazil, the world's top producer of orange juice, wants it gone and is eager to export more citrus to the United States.

The U.S. tariff on Brazilian juice is about 30 cents a gallon, and without it, Austin said, smaller growers like himself will be the first to go out of business.

"I would not be able to survive," he said, adding he couldn't compete with the larger, more efficient operations in Brazil. "The disappointment to me would be that I invested in the groves for retirement."

In short, for Austin the free trade agreement may mean he will have to work harder and longer than he expected in his golden years.

But it has much larger implications in Southwest Florida -- and the rest of the state.

When it comes to citrus, Brazil and Florida are the powerhouses. Together they corner about 85 percent of the world's orange juice market in the form of concentrate production.

Brazil has a good climate, advanced farming techniques and cheap land and labor costs. Some argue that without the tariff, Florida's entire citrus industry will dry up, creating a monopoly for Brazil in the orange juice market that will do nothing to benefit consumers.

"We are a large grower and I can tell you that without that tariff the Florida producer will be out of business," said Robert Coker, a senior vice president for U.S. Sugar Corp. and Southern Gardens Citrus in Clewiston. "This it not a Chicken Little exercise. This is real jobs and real investment in Florida."

At stake is a $9 billion commercial citrus industry in Florida that employs more than 90,000 people, and a local industry that pumps more than $500 million into the region's economy.

Because of the importance citrus plays in Florida's economy, the industry plans to be well-represented at the meetings. More than 20 growers and citrus industry representatives in Florida are expected to be in Miami this week, where the meeting could draw as many as 20,000 protesters, including environmentalists, consumer activists and union representatives.

Going into the negotiations, Brazil -- which has the largest economy in South America -- has big demands of the United States when it comes to agriculture. It wants the United States to reduce its farmer subsidies and protections against dumping excessive amounts of crops on the market at cheap prices. Those demands to eliminate the U.S. juice tariff and other farmer protections could stall negotiations, observers say.

Big business

Locally, citrus is big business. That's thanks in part to the freezes of the '80s that devastated growers in the northern and central part of Florida and drove many of the state's citrus growers south.

Some of Florida's largest growers now have their headquarters in Southwest Florida.

Southwest Florida accounts for nearly 25 percent of the citrus production in the state. In this region, there are nearly 179,000 acres of citrus -- or about 280 square miles -- out of about 800,000 acres of citrus groves statewide.

In the 2001-02 season, the region's growers produced more than 57 million boxes of oranges -- out of 287 million boxes statewide -- according to the Florida Agricultural Statistics Service.

BY THE NUMBERS

The citrus industry in Southwest Fla. 179,000: The number of citrus acres in the five-county region $340-375 million: Annual sales for citrus growers $575 million: Total economic impact from growing, harvesting and transporting citrus (including fertilizer and other product sales to citrus growers and services they buy) $82 million: Annual income directly generated by citrus growers, including wages, taxes, rental income and farm profits $220 million: Total income generated by citrus growers, including money spent by the citrus growers' employees on boats, cars, televisions, other goods, and income generated by other businesses that support the industry 9,200: Number of full-time equivalent employees the citrus industry supports in total 8.8 million: Number of work hours directly generated by citrus operations, equating to about 4,400 full-time jobs (most workers are seasonal) Nov. 1 to July 1: Length of the citrus harvesting season Source: Fritz Roka, agricultural economist for the University of Florida's Institute of Food and Agricultural Sciences at the Southwest Florida Research and Education Center in Immokalee

Among the heavyweights that call Southwest Florida home are Fort Myers-based Consolidated Citrus, the state's largest grower with 52,460 acres of citrus. Southern Gardens in Clewiston is third on the list of Florida's largest citrus growers with 28,000 acres. LaBelle-based Jack Berry Inc. is fifth with 16,240 acres.

A. Duda & Sons Inc. in LaBelle and Barron Collier Cos. in Immokalee, which each have about 15,000 acres of citrus, are tied for seventh place in the state.

All this could be gone without the tariff on Brazilian orange juice, industry representatives say.

"I think financial investments will dry up immediately for everyone," Coker said. "Some growers may have the ability to hang on longer than others. But it doesn't matter. If you reduce the tariff, it's a death sentence for everybody."

Even with the Brazilian tariff in place, Florida's growers are looking at what could be one of their worst seasons. The state's growers are expected to have the largest orange crop in the state's history, and the oversupply has already pushed prices below the cost of production.

The state's orange growers are getting 60 cents per pound solid for their fruit, and the break-even point is about 70 cents per pound solid, said Mongi Zekri, a multi-county citrus agent for the University of Florida's Institute of Food and Agricultural Sciences. A pound solid is the amount of sugars and acid in a box of fruit and it's used to determine how much growers get paid.

"If these low prices continue, many growers will give up on growing citrus even without losing the tariff," Zekri said.

The strategy

Many Florida growers and their representatives plan to participate in this week's Americas Business Forum, which will bring several hundred business leaders from across the hemisphere together to discuss topics ranging from agriculture and market access to property rights and government procurement.

The business executives will come up with recommendations on the FTAA to present to 34 finance ministers, one from each country, who will be negotiating the agreement at a cabinet-level ministerial meeting Thursday and Friday.

Local grower representatives traveling to Miami this week include Coker, with U.S. Sugar Corp. and Southern Gardens Citrus; Tom Jones, director of government affairs for Silver Strand, a Barron Collier Partnership, and grower Austin.

Austin's reasons for going to Miami aren't just personal. He's going as the chairman of the Citrus Tariff Oversight Committee, which the president of Florida Citrus Mutual appointed earlier this year to fight for the tariff.

Florida Citrus Mutual, the industry's largest trade group, has launched a two-year, $7 million lobbying and advertising campaign to keep the tariff on Brazilian juice. Andy LaVigne, the group's executive vice president and chief executive, expects to play a lead role in this week's meetings.

Florida's Department of Citrus, which is also fighting to keep the tariff, will have representatives at the meetings. In June, the department tapped Tampa Bay Buccaneers head coach Jon Gruden to appear in TV spots that promote the preservation of the U.S. tariff on orange juice imports.

A detailed agenda for the meetings has been hard to come by, so Coker and others who will represent Florida's citrus industry in Miami don't expect to develop a strategy for their lobbying efforts until after they arrive.

Jones, with Barron Collier Cos., said he doesn't have a game plan. He plans to stick closely with Florida Citrus Mutual's representatives.

"I think that what we are looking to see happen is to make sure that the position of the Florida citrus grower is understood as far as the tariff issue," Jones said. "Removal or reduction of the tariff does nothing to promote competition. It will create a monopoly for Brazil."

Another NAFTA

The Florida Fruit & Vegetable Association, one of the largest agricultural trade groups representing growers in the state, is also sending its president to Miami. He will stand up for citrus growers and the other growers who could be affected by the agreement.

"We recognize that the FTAA is going to set a broader sweeping agenda for the future of trade on a lot of sensitive crops, including perishables that are grown in Florida," said Ray Gilmer, a spokesman for the association. "While the citrus tariff is getting the most attention, we recognize that these broad multilateral trade agreements can have a long-term impact on the ability of our folks to compete in an increasingly international marketplace."

Gilmer points to the 1994 North American Free Trade Agreement (NAFTA) as good reason to watch these latest negotiations. The new free trade agreement is looked at as an expansion of NAFTA, an agreement between the United States, Mexico and Canada meant to increase trade and investment among the three countries.

But many U.S. growers see NAFTA as a failure. The agreement made it easier for Mexicans to sell their produce in the United States: They undercut prices so much it put dozens of Florida farms out of business. Recent estimates show that Florida's tomato growers have lost about $1 billion in sales since NAFTA took effect.

"Our experience with NAFTA was that we were assured verbally that U.S. negotiators would safeguard Florida crops," Gilmer said. "But that ended up being empty promises. So this time around we are making sure the administration knows every step of the way how important this is to us."

Brazil isn't just a powerhouse when it comes to orange juice. It is also the top producer of coffee and sugar and is poised to become the largest exporter of soybeans and beef. That has many other farmers concerned across the United States.

While he's at the Miami meetings fighting for the Brazilian citrus tariff, Coker also plans to battle a reduction in tariffs on sugar imported into the United States. He said if the new agreement reduces sugar tariffs, the U.S. industry will be at a real disadvantage because international tariffs throughout the world will still be high.

"We will just be allowing more access in the United States with no place for the American producers to compete," Coker said.

Proponents of the new agreement, many of them large corporations, argue that the United States will benefit because it will increase the flow of U.S. exports and increase investment within the hemisphere -- the same types of arguments made for NAFTA.

President Bush supports the agreement for many reasons, said Sarah Anderson, a fellow at the Institute for Policy Studies in Washington, D.C.

"He's a friend of big business," she said. "Also, his father was the first person to propose the idea of a hemisphere-wide trade agreement."

She and other experts question what will actually happen in Miami this week. With the ministers only meeting for two days, she said any real progress on the agreement is questionable, especially with so much disagreement over key issues.

President Bush has made no promises to Florida growers. But the growers feel his brother, Gov. Jeb Bush, understands their concerns.

Farmworker concerns

Florida's growers are far from the only ones worried about a Free Trade of the Americas Agreement. Members of the Coalition of Immokalee Workers, a farmworker advocacy group are planning a three-day, 34-mile march to protest the treaty. That's one mile for each minister represented at the meeting.

The march was scheduled to start in Pompano Beach this morning and protesters plan to arrive in Miami on Tuesday.

"It's the only way we have to get our message across," said coalition member and event organizer Julia Perkins. "We don't have the resources of other groups that can have spokespeople and pay for commercials. We haven't been invited to the meeting for anyone to hear our voices."

Among the many marchers is Gerardo Reyes Chavez, a tomato picker from Immokalee who said he was forced to come to the United States to work after the passage of NAFTA because he could no longer make enough money on the small family farm he worked on in Mexico.

Perkins said there are many farmworkers in Immokalee who used to be small family corn farmers in Mexico and lost their farms after NAFTA. Since NAFTA, Mexico has seen an influx of subsidized corn from the United States. Mexico has lost an estimated 1.3 million jobs in agriculture.

"It forced them to look elsewhere for work," Perkins said. "They go from being on their own land to coming here and working on someone else's land."

The group's message is going to be that the new agreement will be a failure, just like NAFTA. The jobs that have been created for farmworkers in the United States as a result of NAFTA are poor paying jobs and unfair to workers, she said.

"To increase free trade without putting human rights as paramount is very dangerous because we've seen in Florida five cases of modern-day slavery in the past six years," she said. "We want to make sure human rights are considered as more trade agreements are being considered."

For farmworkers and growers, the stakes are high in the negotiations.

For local farmer Austin, the stakes are personal. He fears he will be his family's last generation to grow citrus.