FUTURE TRENDS IN SOUTHEAST VEGETABLE MARKETS
Esendugue Greg Fonsah
Extension Economist
Department of Agricultural & Applied Economics
University of Georgia
Tifton, Georgia
gfonsah@uga.edu
The future of the vegetable industry and market is precarious for the following
reasons: (1) Immigration labor reforms; (2) International competitiveness; (3) Debate
on diet and health issues; and (4) Other trade related reforms/policies.
Out of the problems enumerated the new immigration reform or regulations
concerning migrant labor is the most burning issues on the agenda of most politicians.
This regulation has created two schools of thought, those for it and those against it.
Both schools have plausible reasons for their support or rejection of the policy. The
policy impacts heavily on some sectors of the U.S. economy, especially agriculture
which is more highly dependent on migrant labor than others. The objective of this
article is to shed some light on the effect of the new immigration regulations and how
it would impact this industry if policy makers fail to implement regulations that
would strike a balance in the migrant labor equation (AFBF, 2006).
The United States vegetable and fruit industry is one of the most dynamic in
terms of growth and diversity. This industry generates 29% of total U.S. crop cash
receipts and it is ranked 5th in terms of U.S. agricultural exports (figure 1). Other
major economic crops that have an impact on the U.S. farm cash receipts are feed
crops, 24%, oil crops, 16% food grains, 7% and cotton and tobacco, 6% (figure 1).
The size and diversity of the industry can be determined by the number of
commodities involved such as broccoli, cabbage, tomatoes, onion, cucumbers, lettuce,
snap beans, sweet corn, pepper, pumpkin, eggplant, and fruits like oranges, apples,
peaches, citrus, blueberries, strawberries. This list includes tree nuts such as pecans,
macadamia, walnuts and pistachio; pulse crops such as field peas, lentils, field beans,
and melons (watermelon, cantaloupes, honeydews, etc.), produced in the United
States (Lucier et al.; 2006).
Fig. 1: U.S. farm cash receipts for
crops, average 2002-2004.
Other
crops
18%
Oil crops
16%
Cotton &
tobacco
6%
Feed crops
24%
Food
grains
7%
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Fruit &
vegetables
29%
Although labor has always been an important issue in the U.S. agricultural
sector for more than half a century, the recent broad-based guest worker program
aimed at increasing the agricultural sector labor supply has raised controversial views
amongst government legislators in the senate and the congress. Of the 10 million all
farm labor recorded in 1950, only about 3 million exist as of 2005. Out of that
amount, 0.50 million are hired workers (figure 2).
Recent studies show that although food preparation pays less, $6.64/hr than
farm labor, $9.50, it has been an uphill battle to convince the food preparation labor
force to switch to farm labor even for higher wage. The reasons forwarded were that
it is less strenuous and more comfortable to be engaged in the food preparation
industry than farm work. As a result, Americans preferred the later to the former
(AFBFR, 2005; Fonsah, 2006).
If farm labor is less attractive to Americans, our dependence on migrant labor
will increase. If this hypothesis is correct, then the vegetable and fruit industry that
depends on migrant labor will be heavily affected. A study by the American Farm
Federation depicts that the state of Georgia will lose $101-$181 million in production
and $30 - $101 million in income in the short-run. In the long-run, the loss to the
state of Georgia will increase to $131-$241 million in production and $50-$161
million in income respectively (AFBFR, 2006; Fonsah, 2006).
The recent crack down of illegal immigrants in some states such as Georgia
will definitely have an adverse effect on the vegetable industry especially for crops
that are hand picked, e.g. pepper, fresh tomatoes, squash etc. Hopefully, policy
makers will derive a workable solution that would strike the balance between the two
schools of thought so as to minimize the loss in both production and income.
Figure 2: United States Farm Workers, 1950-2005
M illi o n s
12
10
8
6
4
2
0
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Hired Workers
All Farm Workers
Source: USDA - NASS
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Conclusion
Farm labor force is the backbone of the U.S. Agriculture especially in the
vegetable and fruit industries. Although those for and against migrant labor have
plausible reasons for their argument, the earlier politicians resolve the problem the
better as the impact in both production and income loss is substantial. Furthermore,
prices will increase because of the natural scarcity caused and we might eventually
become net importers of vegetables and fruits.
References
1. American Farm Bureau Federation Report (2006). “Impact of Migrant Labor
Restrictions on the Agricultural Sector”. Economic Analysis Team, February.
2. Fonsah, E.G. (2006) “Effect of the New Immigration Regulations On the
Financial Conditions of the Fruits and Vegetables Industry”. The Georgia
Economic Issues Newsletter, 22 (3) 2-5.
(Nov). Also online:
http://www.ces.uga.edu/Agriculture/agecon/ISSUES/Newsletters/November2
006.pdf
3. Lucier, G. and A. Jerardo (2006) “Vegetables and Melons Situation and
Outlook Yearbook”. ERS/USDA, VGS-315/July 27.
4. Lucier, G. S. Pollack, M. Ali, and A. Perez (2006) “Fruit and Vegetables
Backgrounder”. USDA Outlook VGS-313-01/April.
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