Sam Watson will likely have fewer eggplants, cucumbers, squash and bell peppers growing on his south Georgia farm next spring after struggling through the last three seasons.
Watson said he just can’t compete with the much cheaper Mexican produce that is flooding U.S. markets. So he scaled back this spring and, with no relief in sight, he may have to shrink his Moultrie operation again next spring.
“I’m scared to grow my business in the current environment,” he said. “And if you’re not growing, then you’re going to get left behind or you’re going to go out of business.”
That’s why Watson is frustrated by President Donald Trump’s proposed replacement deal for the more than two-decade-old North American Free Trade Agreement, more commonly known as NAFTA.
The renegotiated deal, called the United States-Mexico-Canada Agreement, or USMCA, does not address the growing strain on fruit and vegetable growers who are feeling the squeeze from Mexico. NAFTA didn’t either, but Watson and others say government-subsidized agriculture south of the border has changed the game and that the new deal leaves them vulnerable.
‘We’re just collateral damage’
Watson, who is also a Republican state representative from Moultrie, said other farmers will likely scale back their operations too – or worse.
“I think it’s obvious that we have people who are going to suffer, but yet we’re just collateral damage, I guess,” Watson said this week.
“Yeah, we didn’t have any deals in NAFTA, but times are different. If we’re going to make a change, then we need to make a change for the good for everybody,” he said. “All we want is a level playing field.”
A report, released earlier this year by the University of Georgia, backs up those concerns. Georgia stands to lose nearly $1 billion in economic input and more than 8,000 jobs in the trade revamp. The report focused on the crops seen as the most at risk: blueberries, bell peppers, cucumbers, eggplants, squash and tomatoes.
The report concluded that while the state could withstand the hit, the same could not be said for the counties that rely on blueberry and vegetable producers to keep their economies humming along.
“For a county to lose over 40% of its income, as Clinch and Echols are forecast to experience, is economic damage on the scale of the Great Depression,” according to the report. “In four additional counties (Appling, Brooks, Colquitt, and Decatur), the percentage drop in incomes is in the range of 2 to 5% equivalent to what is commonly experienced during an economic recession.”
The threat of such major losses comes as state officials begin a third year examining rural Georgia’s economic challenges and searching for solutions. Watson recently became a co-chair of the influential House Rural Development Council, which starts meeting next week in Jasper.
‘Good for America’
Georgia U.S. Senator David Perdue said he is aware of the Georgia produce farmer’s plight, but he argues the proposed deal “overall is good for America.”
“It’s much better for most of commerce in America, for sure,” he said during a recent roundtable discussion with reporters held at his Atlanta office.
Still, he acknowledged that the deal would not cover everyone.
“They’re no worse than they were. Let’s be very clear. This doesn’t do anything to make their situation worse. But they’re under some other competitive problems too,” Perdue said, mentioning blueberry farmers specifically.
Mexican farmers have been able to extend their growing season for blueberries through government-subsidized greenhouses and other protected growing spaces. That has created a troublesome overlap in seasons for Georgia farmers.
Georgia is regularly a top blueberry producer in the country, with the total crop valued at about $227 million in 2017, the most recent year available.
Mexico’s protected production area has grown from 25,000 acres to more than 100,000 acres since 2009, when the subsidies began, according to the UGA study. Mexico’s labor costs are also about one-tenth of U.S. labor costs.
“There are other ways that we can deal with that, but I think overall for the ag industry it’s a major plus,” Perdue said of USMCA.
Perdue praised the deal for opening up opportunities for more export into Mexico, as well as Canada, and addressing some of the uneven labor standards.
The junior senator’s comments echoed those his cousin, U.S. Secretary of Agriculture Sonny Perdue, made earlier this year in a blistering op-ed after UGA researchers released their study. The former Georgia governor and UGA veterinary student vigorously defended the trade deal.
“The sensational assertions are flat wrong,” he wrote in May.
Sonny Perdue acknowledged then that negotiators did not secure “all the improvements we wanted for seasonal fruits and vegetables.” But he also argued the deal improved nearly every aspect of NAFTA and that Georgia’s agriculture industry would benefit.
For now, NAFTA remains in effect while its proposed replacement awaits a congressional vote. The Trump administration says the renegotiated deal will create more balanced, reciprocal trade with neighboring countries that supports high-paying jobs for Americans and grows the economy across North America.
Charles Hall, who heads the Georgia Fruit and Vegetable Growers Association, said he does not dispute that the deal is good for American agriculture.
Southern produce farmers, he said, are just asking the Trump administration for help crafting a plan to avoid the devastation that the UGA report says awaits them in the coming years if nothing changes.
“(The association) is looking to the administration to identify solutions that would help address our concerns regarding Mexican imports during the southeastern harvest season,” Hall said in a statement Thursday.
Georgia Agriculture Commissioner Gary Black said Thursday that since the agreement appears poised for final passage, he is turning his focus to regaining lost ground in the market.
“While we may all have different levels of disappointment – and I’ve surely shared mine – the time now is to focus on what is the solution,” Black said in an interview. “And I believe the solution is partnering with retailers and developing that consumer network that’s going to insist upon Georgia-grown products.”
Black said that means educating consumers that buying local products means investing in a local food infrastructure and local farmers.
“I trust a high majority of our consumers to do that,” he said.