Capitalism vs. Culture: We Aren’t Really Talking About Tomatoes

Jim Prevor - The Fruits of Thought

On ‬the surface‭, ‬the long-standing debate consuming the tomato industry is played out in a kind of legalese‭. ‬The Florida contingent‭ ‬claims the Mexicans are doing all kinds of illegal things‭, ‬including subsidizing the Mexican tomato industry and dumping tomatoes in the United States‭. ‬The Mexicans contest these claims‭, ‬denying doing anything that is illegal‭, ‬that violates treaties or would be a cause for action by the United States‭.‬

The whole use of the term‭ ‬“dumping”‭ ‬is problematic in the produce industry‭. ‬Traditionally‭, ‬dumping means one of two things‭ ‬‮—‬‭ ‬selling an item in a foreign market below its cost of production or selling it for less than its sale price within the country of production‭.‬

Yet‭, ‬by either of these definitions‭, ‬produce is dumped every day of the year‭. ‬First‭, ‬the cost of production is irrelevant to the‭ ‬short-term marketing of a perishable product‭. ‬It is not possible to store produce in a warehouse indefinitely waiting for the market to rise above its replacement cost‭. ‬

In the same way‭, ‬the reference to a home market price rarely makes sense in produce‭. ‬Think about the Central American or Caribbean countries that export melons to the United States or the grapes exported out of Chile‭. ‬These products are grown with the intent of exporting them‭. ‬There is no relevant domestic market‭. ‬

An additional complicating factor in produce is that most imported produce is not actually sold at a fixed price in the United States but rather consigned‭. ‬Producers‭, ‬growing the product for export‭, ‬find marketing agents and consign the produce to them‭, ‬hoping to get the best return based on current market conditions‭. ‬

This is necessary because producers need to ship their perishable products every day‭. ‬There is very little option for them to negotiate a fixed price with a direct buyer because what would they do with the produce if the buyer said no‭? ‬Implicit in the global supply chain for fresh produce is the notion that producers are prepared to accept the market price‭, ‬and they ship with the understanding not that their agents will always get profitable prices‭, ‬but that they will get the market price‭ ‬‮—‬‭ ‬high or low‭.‬

There is little question that the market for tomatoes has shifted from mature-green gassed tomatoes to vine-ripe and‭, ‬in general‭, ‬tomatoes grown in various degrees of controlled environment agriculture‭. ‬Due to many intrinsic factors‭, ‬such as climate‭, ‬labor‭, ‬etc‭., ‬Florida has been disadvantaged by this shift‭. ‬Consumers should‭, ‬of course‭, ‬have the right to buy the products they prefer‭, ‬and the Florida tomato industry is losing out because it has not been able to advance to meet consumer demand‭.‬

Yet‭ ‬‮—‬‭ ‬and this is a great dilemma of the Trump era‭ ‬‮—‬‭ ‬this free market approach doesn’t seem to capture the aspirations of many Americans‭. ‬There is a notion that all across the great heartland of America‭, ‬factories‭ ‬have closed‭, ‬and the communities they sustained were harmed‭. ‬Even if‭, ‬in some kind of economic determinism‭, ‬using comparative advantage analysis‭, ‬we could prove that the loss of those jobs was more than exceeded by the gains in employment of investment bankers in Manhattan and San Francisco‭, ‬it is not clear that this would be the America that Americans would vote for‭.‬

When the British voted for Brexit‭, ‬they did so despite being told many times that the result would be a smaller gross domestic product‭. ‬But man does not live by his bank account alone‭, ‬and the majority‭, ‬who embraced Brexit‭, ‬thought their lives and those of‭ ‬their children and their children’s children would be enhanced in intangible ways‭ ‬‮—‬‭ ‬in non-financial ways‭ ‬‮—‬‭ ‬by preserving a distinctive English life‭, ‬rather than‭ ‬merging into a European identity‭.‬

So‭, ‬this is really the churning dynamic of capitalism vs‭. ‬culture‭. ‬The capitalist tells us‭, ‬irrefutably‭, ‬that economic prosperity is obtained and preserved by free trade‭. ‬Yet‭, ‬the cultural advocate tells us that communities all across the land‭ ‬‮—‬‭ ‬manufacturing plants in the Midwest and‭, ‬yes‭, ‬ag towns everywhere‭ ‬‮—‬‭ ‬support churches and American Legion halls‭, ‬Boy Scout troops and marching bands and raise up the kind of people who answer their country’s call when our wars have to be fought‭. ‬

The argument about the technicalities of tomato trade really miss the point‭. ‬It is two ships passing in the night‭. ‬The question‭ ‬of whether we will have steel mills in Pennsylvania or tomato fields in Florida is a debate over what kind of country we want to‭ ‬be‭.‬

It is not a new battle in America‭. ‬Jefferson praised the yeoman farmer as a source of virtue for the new Republic‭, ‬calling farmers‭ ‬“God’s Chosen People”‭ ‬in his‭ ‬Notes on the State of Virginia‭, ‬while Alexander Hamilton‭, ‬praised the Industrial Republic in his famous‭ ‬Report on Manufacturers‭. ‬

Jefferson won our hearts‭, ‬but Hamilton wrote our future as a nation‭. ‬But we are much richer today‭, ‬and the necessity of accepting social change to maximize income may be less than it once was‭.‬

Whatever the outcome‭, ‬the mistake is to think we are just talking about tomatoes‭.‬