Town Fights for Survival in Florida's 'Tomato Belt'
Competition from Mexican growers threatens way of life in proud Immokalee, Fla.
For decades, the Barfield cucumber and tomato farm sprawled over 1,500 acres in this agricultural region skirting the Everglades, its packinghouse welcoming visitors driving down Main Street. Barfield went bankrupt last year. "Simple economics," says farmer Fred Barfield.
A few blocks away, $8 million worth of new equipment sits idle at the former Collier Enterprise packinghouse. Dubbed the most modern tomato packinghouse in the country, it closed last year too, but for a different reason: Its corporate owners closed shop and moved the operation.
These defunct packinghouses tell the story of an industry and a community learning firsthand the reality of life in a global economy.
Over the past five years a combination of factors, including competition from Mexico, increased government regulations, and severe weather, has forced half the state's small tomato farmers out of business.
Nowhere has it hit as hard as in this Collier County community of 18,000 people, the unofficial capital of America's winter tomato industry, a town of diners and deep pride whose residents have worked the surrounding earth for generations.
"The domination that Immokalee had on the tomato crop is gone," says Greg Mihalic, Collier County's housing and urban improvement director.
Florida produces half the nation's winter tomatoes. But between the 1991 and 1997 seasons, the industry took a major hit, shrinking from 200 farmers to 60 while sales went from a record high of $728 million to a record low of $440 million.
"It's definitely a different industry than it was 10 years ago," says John Van Sickle, a University of Florida professor of food and resource economics. "It's going to have to have some help or it won't survive."
It's in the Immokalee region, where tomato is the No. 1 business, that the decline was greatest. Here, tomato sales dropped 60 percent, from $265 million to $102 million. That reflects the fact that the region lost 31 percent of its acreage, its shipments were cut by more than half, and the average wholesale price of a 25-pound tomato box went from $9.10 to $7.39, according to figures compiled by the Florida Department of Agriculture and Consumer Services.
"I've never seen anything decline so sharply," says Bob Blankenship, the department's chief economist.
While Florida and California are both top producers of tomatoes, they don't compete because they have opposite harvest seasons. Not so with Mexico, which goes head to head with Florida for the winter tomato market.
Farmers here say that although they've felt the strain of Mexican exports for 20 years, the Mexican economic crisis and subsequent devaluation of the peso intensified the battle. "The pressure became unbearable.," says Johnnie Goodnight, who became a tomato broker here after losing his 600-acre tomato, pepper, and cucumber farm in 1989.
In calling for a progressive reduction of tariffs on some Mexican imports, the North American Free Trade Agreement encouraged Mexican growers to increase shipments of winter tomatoes.
They did. Between the 1991 and 1997 seasons, Mexico's share of the US tomato market jumped to 42 percent from 28 percent. Florida growers, meanwhile, lost ground, going to 40 percent from 56 percent.
Until the US Commerce Department took action in 1995, Mexican growers could sell tomatoes on the US market at below production costs. That drove wholesale prices down, forcing many farmers out of business.
Things stabilized somewhat after the US and Mexican governments signed an agreement in 1996 that said tomatoes from Mexico cannot be sold below $5.17 per box. But experts say Mexican farmers still sell at below the cost of production of Florida farmers because their labor and regulatory costs are far lower than those in the US. "The regulatory environment is much stricter here," says Mr. Van Sickle, referring to regulations on pesticides and labor laws.
The ripple effect
In the past two years alone, Immokalee has lost its six main packinghouses and, with that, 600 jobs. The loss has rippled through the economy, driving the town's unemployment rate up to 15 percent. Today, 46 percent of the town's inhabitants live below the poverty level.
"When you've got a town that is so dependent on one business, it becomes a major factor throughout the town," says Greg Mihalic, who's in charge of urban improvement for the region.
"What middle class we had has disappeared," concludes Steve Price, president of Florida Community Bank, which is headquartered in Immokalee.
Some tomato experts say that government regulations have simply made it too expensive for Florida growers to stay in business, and that the government must step in to save the industry here. The Florida Fruit and Vegetable Association is lobbying Congress to enact a national labeling law that would help people to choose to buy American instead of Mexican.
Meanwhile, Collier County officials, predicting that the decline is irreversible, are looking at ways to diversify the economy. Efforts are under way to promote Immokalee as a destination for ecotourism, for instance. Last year, Immokalee won designation as a federal enterprise zone, which gives tax incentives to business moving manufacturing jobs here.
To be sure, Immokalee still counts among the biggest vegetable producers in the area. But most of Immokalee's tomato farmers today are corporate entities. They have outside assets and risks spread across different locations to withstand the effects of weather. But their bosses don't live in town, and don't contribute to it as much as the farmers did, observers say.
"It's not only the growing, but it's the whole processing that is moving away," adds Mr. Mihalic. "These farms don't pack and ship in Immokalee."
"Virtually every single local tomato grower has gone out of business," says Mr. Price. "Large corporate growers that grow tomatoes 12 months a year are virtually what's left here. They lose money here and make it up somewhere else."
That's the case with Pacific Tomato Growers, a major player in Immokalee, with sales expected to top $100 million this year. It has only 1,300 acres of tomatoes in Immokalee but 17,216 acres spread across Georgia, Pennsylvania, and California. That's enough to have caused the company "significant losses" over the past few years, says Mac Carraway, the company's chief financial officer. "Our single benefit is that we don't just grow in one place," Carraway says. "It's helped us to survive."
Hope for the future?
This year, things have looked a better for Immokalee farmers.
Due mainly to El Nio-driven freezing weather, Mexican shipments went down and the price of a tomato box went up a little.
But many say it's a short reprieve. While farming always has been a risky enterprise, subject to the whims of storms and tornadoes, experts agree that NAFTA has destabilized the market.
"You sit here, watching the Weather Channel to see what's happening in the Pacific," says Mr. Goodnight, the tomato broker. "If any kind of weather system is hitting Mexico, that has an adverse effect on their crop. It's our salvation."
Some, like University of Florida agricultural economist Fritz Roka, refuse to place the blame on Mexico.
"The growers are going through a rough economic time, and Mexican producers are being blamed for why they are in a downturn," he says. "Historically the tomato industry goes through cycles, and the past few years have been at the bottom."
But, Mr. Roka explains, farmers here must diversify their crops if they are to survive.