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Andy LaVigne

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Material Information

Title:
Andy LaVigne
Series Title:
Florida citrus oral history project
Physical Description:
1 sound file (56 min.) : digital, MPEG4 file + ;
Language:
English
Creator:
LaVigne, Andy
Mansfield, Bill
University of South Florida Libraries -- Florida Studies Center. -- Oral History Program
University of South Florida -- Tampa Library
University of South Florida -- Globalization Research Center
Publisher:
University of South Florida Tampa Library
Place of Publication:
Tampa, Fla
Publication Date:

Subjects

Subjects / Keywords:
Citrus fruit industry -- Florida   ( lcsh )
Globalization -- America   ( lcsh )
Orange juice industry -- Brazil   ( lcsh )
Genre:
Oral history   ( local )
Online audio   ( local )
Oral history.   ( local )
Online audio.   ( local )
interview   ( marcgt )

Notes

Summary:
The interview focuses on LaVinge as executive vice president of Florida Citrus Mutual and his work on the state, national, and international level to expand economic and political stability (capitalism) to the countries of Central and South America and reduce the tariff. LaVigne discusses the efforts of NAFTA, CAFTA, FTAA, GATT, and WTO.
Venue:
Interview conducted May 13, 2005, in Lakeland, Fla.
System Details:
Mode of access: World Wide Web.
Statement of Responsibility:
interviewed by William Mansfield.

Record Information

Source Institution:
University of South Florida Library
Holding Location:
University of South Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 024871277
oclc - 64027630
usfldc doi - C56-00012
usfldc handle - c56.12
System ID:
SFS0022314:00001


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Full Text

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C O P Y R I G H T N O T I C E T h i s O r a l H i s t o r y i s c o p y r i g h t e d b y t h e U n i v e r s i t y o f S o u t h F l o r i d a L i b r a r i e s O r a l H i s t o r y P r o g r a m o n b e h a l f o f t h e B o a r d o f T r u s t e e s o f t h e U n i v e r s i t y o f S o u t h F l o r i d a C o p y r i g h t 2 0 0 7 U n i v e r s i t y o f S o u t h F l o r i d a A l l r i g h t s r e s e r v e d T h i s o r a l h i s t o r y m a y b e u s e d f o r r e s e a r c h i n s t r u c t i o n a n d p r i v a t e s t u d y u n d e r t h e p r o v i s i o n s o f t h e F a i r U s e F a i r U s e i s a p r o v i s i o n o f t h e U n i t e d S t a t e s C o p y r i g h t L a w ( U n i t e d S t a t e s C o d e T i t l e 1 7 s e c t i o n 1 0 7 ) w h i c h a l l o w s l i m i t e d u s e o f c o p y r i g h t e d m a t e r i a l s u n d e r c e r t a i n c o n d i t i o n s F a i r U s e l i m i t s t h e a m o u n t o f m a t e r i a l t h a t m a y b e u s e d F o r a l l o t h e r p e r m i s s i o n s a n d r e q u e s t s c o n t a c t t h e U N I V E R S I T Y O F S O U T H F L O R I D A L I B R A R I E S O R A L H I S T O R Y P R O G R A M a t t h e U n i v e r s i t y o f S o u t h F l o r i d a 4 2 0 2 E F o w l e r A v e n u e L I B 1 2 2 T a m p a F L 3 3 6 2 0

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Citrus Oral History Project Globalization Research Center University of South Florida Interview with: Andy LaVigne Interviewed by: William Mansfield Location: Lakeland, Florida Date: May 13, 2005 Transcribed by: Wm. Mansfield Edited by: Wm. Mansfiel d [Tape 1, Side A.] Bill Mansfield: This is Bill Mansfield, from the University of South Floridas Citrus Oral History Project and Im talking with Mr. Andy LaVigne on May 13, 2005 in the offices of [Florida] Citrus Mutual, in Lake Land, Florida. And Mr LaVigne, we always get people to start off by having them state their name and telling us when they were born and where they were born, so let her go. Andy LaVigne: Im Andy LaVigne, Executive Vice President and CEO of Florida Citrus Mutual. I was born February 4, 1963 in Kencheloe Air Force Base in Michigan. Mansfield: That was a long way from Florida. LaVigne: Well, Dad was in the military, so we traveled quite a bit. Mansfield: Okay. Describe your current occupation. LaVigne: As Executive Vice Pre sident of Florida Citrus Mutual, in the association its charged with addressing issues on the state, national and international level, as a collective for the growers, and how various regulatory or legislative process, or development of those processes wo uld impact growers, positively or negatively. And how we can have an impact on that. So my role is to be involved in that process and hopefully be proactive to the point where we can address issues, prior to them becoming a problem for the growers, in thei r actual operations.

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2 Mansfield: Okay. How did you get involved in with citrus? Is this your first work with citrus growers? LaVigne: Well, not really. It is directly, but indirectly, no. I graduated from the University of Florida in 1986 [and] moved to W ashington, DC soon after that and worked in Washington for ten years, with members of Congress from Florida and also with the Secretary of Agriculture and his office, under Secretary Ed Madigan. In working for Congressman Tom Lewis, from 1987 to 1991, one of my key focuses was agriculture and trade. He was the only member from Florida on the House [Agriculture] Committee and so I was his representative on the Ag Committee staff. A lot of my role there was dealing with trade agreements and labor issues and environmental issues which naturally transitioned into this position [with Florida Citrus Mutual]. Then I also worked for Congressman Charles Canady, from the Lakeland area, for many years. And Lakeland [has been] the center of citrus for so many decades. The [Florida] Department of Citrus is [here] and [so is] Florida Citrus Mutual. I also did his Agriculture Committee work. So I continued my relationship with the citrus folks at that time. Mansfield: Okay. When did you come to work with Florida Citrus M utual? LaVigne: Its been seven years. I came here in 1996. Mansfield: [clears throat] The thing that everybody is talking about, when it comes to free trade and Floridas citrus, is the Free Trade of American Areas LaVigne: Free Trade Area of the Ame ricas, the FTAA. Yes Mansfield: Right. Tell me what you um your perception of that bill. LaVigne: Well, as they move through the negotiations of that agreement, what they are really looking at doing is an expansion of NAFTA, the North American Free Tra de

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3 Agreement, from Canada all the way down to southern most points of Chile. In that you obviously encompass a number of nations that are not currently major importers exporters with the United States. There is a lot of opportunity there. But there is stil l a lot of military and economic unrest in those countries. That poses a challenge. The push now is really on two tracks, as I would see it. One is the Free Trade Area of the Americas; the other is the World Trade Organization the global negotiations. As we watch it, it is very similar to the GATT [General Agreement on Tariffs and Trade] NAFTA negotiations, back in the late 80s and early 90s, where one would move along and all of a sudden hit a snag and the other would pick up momentum. And thats what were seeing now with FTAA and WTO [World Trade Organization]. Youre seeing the FTAA move along and all of a sudden it hits a snag and its principally a snag with Brazil and Venezuela. And now the WTO seems to be picking up a little more momentum. So tha t the whole aspects of global trade negotiations have evolved quite a bit, from the um original Uruguay Round of negotiations of GAT and NAFTA. I think the key part of that and why were seeing some problems with the FTAA negotiations is the fact that you re lessor developed, Third World countries, like you find in South America, want to have a more active role. They want to have access to they want to limit access to their markets and things like that. So thats a major sticking point for many of the devel oped countries. Mansfield: Okay, I have read about that, but it seems like, when it comes to Florida, everybody is concerned about is the protective tariff, limiting the import of orange juice frozen concentrate from Brazil. LaVigne: Well, what we find though, is we are in a truly unique situation, in the global trade arena with citrus. Youve got two entities in the world that produce [orange juice] actually two states in the world. [The state of] San Palo, in Brazil and Florida produce, roughly, 90% of the oranges for orange juice in the world. Texas, California, Spain, [and] Australia produce oranges for the fresh market. And if they cant make it to the fresh market because of quality standards or other standards their secondary market is squeezed jui ce of some kind. So youve got two players in the world and, essentially, two

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4 markets in the world North America and Europe. You dont have the Brazilians, who are the largest producers of oranges in the world, taking advantage of their own market. They ha ve less than 5% of what they produce [going] into their own domestic market. It comes here to the US and it goes to Europe. Its a very consolidated market, almost to the point of a monopoly. There are three major players in Brazil. They control all of th e Brazilian production and processing and most of the global distribution. So when we look at it, we feel that [the only way to maintain] free trade, in this arena, should Brazilians continue to operate the way that they operate, is to continue the current situation, enabling the Florida growers to stay viable and that [means] keeping the tariff in place. [The United States] is the number one market in the world for orange juice, because the Florida growers built that market. They assessed themselves, they developed technology and they advertised the product to get it to grow to where it is today. I dont think its in the best interest of the US, or Florida, or the Florida grower to give that market away to a foreign producer. We are more efficient in prod uction pre acre. The thing that gets us is what you would call the social cost. They are a major issue and thats the labor cost and the compliance costs and the other things that we have to deal with. [They] probably add, at least, 30% to our bottom li ne, over what the Brazilians have. So, you look at it, from that context, of the unique nature of the market (two players and two markets). Even the folks that are in this arena, in free trade and support free trade (whether its the Coke a Colas, or the Pepsis, or the Tropicanas, or the Minute Maids, or Cargill, or others) they have a hard time with this situation. Because they dont want [it to become] a one supplier market place. [That would put them] into a bind as well. They are then at the whim or th e Brazilian processors, not, at least, with an outlet market with the Florida growers. So, really, its not just a straightforward free trade or protective tariff issue. Really, we consider the tariff the cost of doing business in the United States. Mansf ield: What is Florida Citrus Mutual doing to keep the tariff in place?

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5 LaVigne: Well Bill, two years ago we pulled together a group, we call it the Citrus Tariff Oversight Committee, to look at, to stay actively involved with the negotiations. With that, weve pulled together interests grower interests from through out the state. To try and coordinate the industries efforts; bring the industry together behind this [and] develop our message. [We want to] make sure that we are communicating to negotiators, t he administration, [and] legislators as well as other interested countries. And sitting down with the Brazilians and having various discussions. But, our main goal was make sure people understood the unique nature of our market and our production. Also, t o make sure that as the negotiations move forward, were at the table. We dont know what the ultimate solution is. As we go through it, right now (in our view) we feel that keeping the current tariff in place is the best option. When you look at trade and long term issues and you look at a crop like citrus, [where] you cant just grow something next year. You got a tree in the ground for thirty years, or longer. Weve got to look at it from that way. Somebody more creative than us or somebody, who may have worked in negotiations in another area, may have another solution, but we want to be at that table to be offered that solution. So that growers have the option to remain viable in the state of Florida for as long as they choose. We feel that there are als o opportunities, globally, but we cant sacrifice one area for a promised opportunity down the road. Weve got to move to that eventually. The last thing there is, in the education process and the lobbying process, we have to make sure that people underst and that orange juice is not like wheat, corn, rice; any other major staple, for third world and developing countries. You cant just take a tanker load of orange juice and drop it at the port in Africa or Asia, somewhere and expect them to distribute it. Those countries dont have refrigeration, a lot of the m dont have eccentricity in the villages in the remotest areas. Where you can take fifty pound backs of rice and drop them in the middle of the square and they get distributed [ ]Y ou cant do that with orange juice ] Our product is a little more unique in that way too. It is not as easy as [other commodities] to be distributed. Mansfield: A lot of people have told me that orange juice is a luxury for developed countries and where they dont have the inf rastructure to preserve it, it just doesnt exist.

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6 LaVigne: Well, we try to look at it too, from the opportunity as a health I mean, if there was a way for distribution (and there is some research going on, trying to do some shelf [life stabilization] iss ues. Youve got some very vital nutrients and vitamins that are helpful to communities and nations that have health issues. [With orange juice], youve got an automatic delivery system. The logistics becomes a challenge for that. Mansfield: Tell me more a bout the Citrus Tariff Oversight Committee. When did that come into existence? LaVigne: It came into existence a little over two years ago. What we did, as an industry, was pull together, with Mutuals board and the other associations throughout the stat e, an over riding group that looks at the trade negotiations as they moved through. Mansfield: Could you tell me about the membership? LaVigne: Sure! The membership is all growers who have an investment in groves. So we dont have somebody who is princip ally a processor, or principally a packer. Their investment had to be in the groves long term interest and people who had some political savvy, in the process, or an interest in being involved in it. Because we are expecting, or asking these people take th e time out of their schedule, to meet with various legislators, negotiators. We had several meetings previously with Trade Ambassador Zellick and some of his staff [and] members of the White House, members of the [Bush] Administration. It takes time and m oney out of their pockets to do this. And then we ask the growers to voluntarily contribute to the effort, to make sure that we are able to fund this additional project, over and above what we do on a daily basis. Weve had very strong participation [and] were very pleased with the level. The CTOC is a guiding body in our trade policy. The overall objective was to make sure that when we are at the table and issues of opportunities arrive, we had a body in the industry thats representative of the industry to come back and say This has been laid on the table. What do you think? Or We would like to bring this to the table, what do you think?

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7 And instead of it being one or two people representing a nine billion dollar interest to the state it is a collective group of twelve folks who sit around that table and can really provide some good in put. Mansfield: You said they were all growers, what kind? I mean LaVigne: Youve got everything from a hundred twenty five acre grower to a seventy thousand acre grow er. From north of the citrus producing [area], north of here, all the way down to LaBelle and Immokalee, and everything in between. And just round oranges, not principally grapefruit or something like that. It had to be oranges for processing. Mansfield: Yes. Thats one of the problems of talking about citrus. It does include grapefruit and lemons and limes. But everybody is talking about oranges. LaVigne: Right. But even majority of your grapefruit growers, say on the east coast, in the Indian River are a, or in the southwest, down in the Gulf area, they may have grapefruit and that may be their principal [crop], but theyve also got a back up. Theyve diversified. Theyve got some oranges that they also grow and sell for processing. But its diversifying so theyve got two options there. Mansfield: For the historical record, could you tell me the people that are on the Citrus [Tariff] Oversight Committee? LaVigne: You know I would have to send it to you. I dont have it [off the top of my head and] I w ould probably leave somebody out. I would hate to do that. Mansfield: Okay. It would be great if you could send me a copy of that. It would be good to have that for the record. I know you might forget some of the people, but who would you characterize a s the people taking leadership?

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8 LaVigne: Well, current chairman, of Florida Citrus Mutual, is ex officio on the board, Marty McKenna. But he is the way that we set it up, the chairman of Mutual is automatically on the CTOC and he is an ex officio member. Marty is based out of Sebring and his production office is in Lake Wales, here in Polk County and Highlands County. Squire Smith who was chairman of the Mutual at the time and started the CTOC is a grower out of Winter Haven and Eagle Lake. Weve got a re presentative out of Southern Garden Citrus, out of South Florida. Dan Richey, a Citrus Grower out of Indian River was on the original board and on the Citrus Commission. Pat Carlton, a third or fourth generation citrus grower, the Carlton Family, from the previous governor, out of Wachula, is on it. Robert Underbrink, who is the state president for King Ranch and over seeing Consolidated Citrus is on the board. Joe Davis, Jr. who came on the board in the beginning and has since become chairman of Citrus Wor ld. Um Mansfield: [laughs] I dont mean to throw a pop quiz at you. LaVigne: No, Im trying to think. Weve got other [board members but] Im just drawing a blank right now. Steve Sorrels, out of Arcadia [is also on the board]. Mansfield: Does it seem to you that anyone of them takes more of a leadership role on that committee, with ideas, or suggestions? LaVigne: No, I think they al rise to the occasion, depending on where we are and whats going on. They all contributed a great deal to it. The other thing that theyve done, besides ideas and suggestions, is [to] take the message back to the grower community. Thats been key, because they have to hear that: one, the resources that theyre providing (on a voluntary basis) are being spent wisely and succ essfully. And two, have hands on fed back on the progress being made. Growers anybody, would like to hear How did you meeting with the Secretary go? Or, How did your meeting with the White House go? What message are we getting back? And so those kinds of things have been extremely helpful.

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9 Mansfield: Now, if you could, tell me about those meetings. What, you said you all met with Trade Ambassador Zellick? And I ask this because, history books will tell you [of a meeting] but you dont get much of a fe el for what went on in the meeting, so LaVigne: Well the first meeting we had, I remember very, very well. It was actually in Congressman Adam Puttmans office. [It was] with Ambassador Zellick and a couple of representatives of the CTOC. It was an educa tion process more than anything. [I think] Ambassador Zellick had the same impression of Floridas production as most people. They think were like California, most of our oranges go to the fresh produce section of the market place and that if you open a foreign market like Poland (that was on that he mentioned) then we could start shipping our product to Poland. We had to step back with the Ambassador and say, Were just the opposite of California. He had that what do you mean? look [on his face]. And we explained that instead of 90% of our product going fresh, like California, and Texas and Spain and other areas, 90% of our product goes to process. Those trees are grown for processing. The fruit on those tresses is grown for processing. Theyre good he avy round oranges that produce a lot of juice. They arent always ideal for peeling and eating, but they are made to grow juice oranges. So you cant alternate real quick. [Interview interrupted by in coming call.] Mansfield: Okay, so you were saying t hat you LaVigne: So we spent that time working with the Ambassador. He was very, very receptive. He understood the issue and his reply was, You need to understand my role in this is to negotiate agreements, open markets and provide opportunities for us, and the consumers. And to import and export products. So he was very gracious in the education that we were able to give him and very open to that. But, he also said Lets stay in touch and continue to communicate, and see what alternatives develop, or evo lve as we go through the process.

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10 Mansfield: And place that meeting in a chronological context. When was that? LaVigne: That would have been [figures to himself] I believe it was probably April or May of 2002. Mansfield: Okay, so he thanked you for t he education, how effective do you feel your presentation was? What kind of results did you get? LaVigne: I think it was very effective. Not soon after that we meet with his deputy ambassador and the head for ag negotiations, USTR [United States Trade Re presentative], Al Johnson. And Al already had the information. It was clear that the ambassador and the staff that was with him had passed on our issues to Ambassador Johnson. So that has given us the base, not only for USTR understanding the unique sensi tive nature that we find ourselves [in]. But also the Administration, the Department of Commerce, and the Hill. In the negotiations over the past three years, they have setup a category, more or less, in the agriculture section. Its a fourth tier as they call it, and that tier is sensitive commodities. From what we understand, in talking with the Ambassador, we are at the top of the list, in that basket. So, from our perspective we thing weve been very successful in getting there. You know, as they move along, in this, they become more defined in what sensitive means and what opportunities are there, or what restrictions may need to be placed on it. But ultimately, that sensitive category will be the one that, as countries determine whether there wi ll be things that are exempted or not in negotiations. We anticipate thats where the US will say, Okay, if youre going to pull those things off the table, then were going to pull these three things; this [agricultural one], and that high tech one and th is banking one. But I think thats just the way the negotiations have evolved. Mansfield: Forgive me for smiling, but it sounds sort of like a poker game.

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11 LaVigne: Its very much like a poker game. It is. Its an extended, multi year poker game and peopl e have to have the will to stay at the table. And the game changes constantly. You get a flurry of activity at the end and everybodys sitting there with all there cards and all their chips and trying to decide what gets played and what doesnt get played. I think thats a good comparison. Mansfield: What about your activities to educate congress? You, having experience in that, [it] seems like youre the ideal person for this job. So tell me what Florida Citrus Mutual is doing to influence Congress. LaV igne: One of the things we started out with here, in the Tariff Oversight Committee plan was to look at Floridians perception of citrus. We did a poll throughout the state, trying to get our snapshot (its been three years now) of what peoples perception of the Florida citrus industry was. I had a you know a guess at what it would be. But this industry has a very rich history, a pioneering history and many, many generations that have, essentially settled this state and been active in politics in that devel opment, over all of these years, for many different aspects. And the perception of the industry was very, very strong with little to no negatives. It was exactly what I thought it would be. It is a credit to the families that have developed this industry over those many generations. So, as we went to our congressional delegation, especially those who grew up here, they were very receptive. As we focused on it, just focused on citrus and no other commodities, and no other issues, and focused on trade, the delegation, across the board, from the staunchest republican to the most liberal democrat, were very receptive to the message. They understood, and they understood the importance of the industry, economically, environmentally and socially. We didnt have a huge hurdle to get over there, what it was, was building their base of knowledge about the industry. Given everything else they have on their plates: social security, the war in the Middle East and everything else, what we did was begin a slow process of sitting with their staff. We meet with them, either in their district here, in Florida or in Washington. We sit down with them, discuss the industry, where we are, [where we are] at the table with the negotiators,

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12 those kind of thinks. And as various miles tones occur in the negotiations, we also sit down with them after those [and learn] This is what happened. This is how it may impact citrus. And this is what we anticipate. Well keep you posted. We havent asked for anything, except specific needs, as iss ues come up. We havent tried to cry wolf every time something was floated out there and [caused] a little bit of concern. So I think weve been It was just a constant updating and not hitting them with a hammer, but just keeping them apprised. We didn t have to overcome negatives. We didnt have to get their support in some other manor that you often have to do in a political situation. You know, hold huge fundraisers, or those kinds of things. Everyone thin k s highly of the citrus industry. Its a good product. Its wholesome. You got a tree in the ground for thirty years; its not a major environmental [threat] It is more of an environmental benefit than a [threat] So there are many things that just played into our hands and made our job a lot easier. M ansfield: What about congressional representatives who arent from Florida? And when I say that Im thinking of [the] Committee on Agriculture and the Committee on Trade, how do you work with them? LaVigne: The Committee on Agriculture i ts been very rec eptive, just to our message. There are a lot of commodities that they deal with that are not program commodities out of the Midwest. That committee is pretty well stacked toward Midwest program crops that get subsidies. So working with my colleagues, and t he citrus industry in California, the citrus industry in Texas, the apple industry and other tree fruit [industries], weve been able to communicate how trade agreements have or have not helped [the] specialty crops, as we refer to them. Its helped make them receptive as weve testified before the House and Senate ag committees. Weve talked about that and its really been very well received and given those members the opportunity to look at how that may relate to some situation they may find i n their state. Just about every state has a commodity like ours that is not subsidized and is subject to the market whims, or foreign imports. [Sometimes they] are, either coming out of some Third World country that has [low wages] or things like food prod uction

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13 practices; that would not be acceptable in the US. So thats been a positive reception for us. And we dont have anybody on either ag committee from Florida, Senate or House. So hats been an area weve had to work. But, again, weve been very well received. Then we work closely with the Ways and Means Committee and the Finance Committee and we have members [from Florida] on both of those committees. And they are the trade oversight committees for the House and Senate. Anything trade related goes t hrough them in hearings. And proposals are made their, amendments and then thrown to the floors of both bodies for a vote. So with the help of Congressman Shaw, the Chairman of the trade sub committee this year, Congressman Foley, whos on that Committee, theyve been extremely helpful there in getting the message. Foley covers part of the [?Indian?] River. Congressman Shaw doesnt have any citrus in his district anymore but hes very close to the citrus industry and people in the citrus industry. Hes be en with the legislature for many years and hes very close to a lot of people in the industry. Then Senator Nelson, when he was a member of the house his district was the northern part of the Indian River. When he went into space on the space shuttle he br ought Indian River grapefruit with him. Hes got close, close ties [to the citrus industry]. His family grew citrus and raised cattle. Then Senator Martinez has a very close relationship with members of the industry, having grown up in Orlando, at a time when Orlando was a big citrus producing area. So those relationships are extremely helpful to us through the negotiations and thats how we work to educate them. From that perspective it is not a hard lift. Again, as long as we stay at the table with them and keep them posted, and not bug them on minor issues, we can continue to be successful. Mansfield: You say they are receptive to it and I think about how politicians have the reputation of smiling, nodding their head, and then going ahead and doing what they want to do. So when you said, theyve been receptive, could you substantiate that with some illustrations? LaVigne: Yeah. Two years ago, we sat with the Secretary of Commerce, at the time. And Im going to draw a blank [trying to think of his na me]. President Bushs first Secretary

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14 of Commerce, out of Texas, old friends. The meeting was arranged by Congressman Foley and Congressman Putman. They came to the meeting with us and they sat and, you know they provided support of the industry and why i t was important to the stare of Florida. The Governor, Governor Bush has been extremely receptive and has carried our message, not to his brothers administration but also to some of the Brazilians, when hes been on trade missions for the state. Its t he same with Congressman Shaw, as hes gone to various meetings or held hearings. They talk about whats your view on how we deal with the unique nature citrus finds itself in? [The reply is] Well Congressman were aware of that. We understand your support and where youre coming from. Our goal in this thing was, whenever the White House opened the door, someone was there talking about citrus. And I think weve been able to do that, in a balanced manor. Not with a hammer, or anything else, which you often see with a lot of other issues, or commodities or challenges that people find themselves in with the government. So, thats been helpful. But thats what weve seen. Senator Martinez had a meeting [and was at the airport when he] ran into the new ambass ador from Brazil to the United States. They were sitting there talking and one of the first things the Brazilian Ambassador brought up was trade and citrus. Martinez said, We need to find a solution to this thing. You need to help us find a solution to thi s thing or were going to have some challenges here. So its on the top of a lot of their minds, as we go through this, as something that is very, very important to the state of Florida. Mansfield: Well, talking about, you know the other states have inte rests that are similar, but I was interviewing someone (I cant recall his name), but he mentioned apple growers. I believe this was in reference to NAFTA but apple growers had an interest in tearing down the trade barriers so they could sell their apples. So they would support eliminating the tariffs. What kind of I guess maybe the question should be, who are the adversaries?

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15 LaVigne: Really the only adversary weve had is the Brazilian industry. Everyone else has been supportive, or has chosen, because of the market, or politics or other reasons, just to stay neutral. Or theyve been supportive behind the scenes. You know, as we discuss this with Tropicana, or Minute Maid, or Cargill, or Dryfuss, or others they would prefer to have two suppliers. Many of them have told us this. Theyve all been supportive of our efforts, at some level or another. So, unlike steel, you had the car manufacturers on one side and the steel producers on the other side and the president found himself in the middle, putting ta riffs on [imported steel]. You were going to have one side screaming at you one way or the other. [With the citrus tariff] there is really no one screaming at us, except the Brazilian processors. That is also something that has made this more palatable as we have gone through the process. Mansfield: What are the Brazilians saying? LaVigne: Well, their argument is the tariff keeps them from importing to the United States and they should be able to have free access here. And, you know, if you want to trad e with Brazil this is one of the things you need to get rid of. Thats essentially their story. The challenge that weve got with that concern is the late 1980s a countervailing duty case was filed against the Brazilians, and won in favor of the Florida citrus growers. That basically said [the Brazilians] were receiving zero interest or negative interest loans on their property in setting up their groves. And once you set up a grove, its set up. Youve got to maintain it, but youve got trees in the gro und for many, many years. Theyve also been found to be dumping, on one occasion and we are midway into another dumping case. Their practices are not practices that would be found acceptable in the United States market place. So [the Brazilians] have a t ough time being too hard core on opening markets. The other thing is that they are exporting 95% of what they produce. What are they going to increase? They cant just plant a crop next year and start harvesting and increase another hundred million gallons They are already exporting everything they can to the US and Europe. So the bottom line, what they are looking at is economics; just putting

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16 more money back into their pockets not expanding the market in Brazil, or expanding a market somewhere else. [The ir approach is] Lets further control the US market. Therefore I will be able to have additional dollars in my pocket. From our perspective, that logic doesnt fly. If they want to grow their market, if they want to grow their GDP, you cant do it with cit rus when youre already exporting all of your citrus. Typically, in an economic situation like that, what youre going to do is youre going to increase your exports, not just increase what goes into youre pocket. Mansfield: Some people have said that if the tariff is eliminated youll end up with an OJPEC, rather than OPEC. LaVigne: Yeah, I think youre very close to that. Youve got a situation where there are three producers down there now. Cutrale, Citrusuco, and Citravita control roughly 80% of th e processing and growing of those oranges. They probably control 90% of the distribution in the world. Recently two of the entities bought Cargills interest in Brazil. It was; Okay, were going to buy you. And then they choose to split it up. How they are going to split it up and who gets what would never fly in the United Stated. Thats why we have anti trust laws and other things. It wouldnt happen [here]. Its just the unique nature of the market place. Its Realistically thats how it is in Brazil. But thats how it is China has their guidelines. India has their guidelines. Europe has [its] guidelines. Every country has their own specific [guideline ] and thats the challenge the negotiators have. What parts of those, what cards is Brazil willing to throw on the table to have some sort of agreement thats acceptable? What cards is China willing to throw on the table? What cards is Europe willing to throw on the table, to find something over all, that everyone can sign off on? Mansfield: What do you foresee happening if the tariff is removed? LaVigne: We really believe, from an economic standpoint, if the tariff is removed the industry in the state of Florida, as we know it today, will be gone. I think that the Brazilian industry will control the mar ket to the point of making it absolutely not

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17 economically viable for growers to stay in business in the state of Florida. That land will be sold either to Brazilian interests, to process up here, to have some kind of a counterbalance to a disaster in their area. Or, it will be sold to developers, or something else. And growers are just like any businessman, if they cant make a profit every other year, or some other function, then they will go out of business. Mansfield: I was trying to remember who I was talking to that talked about the contradiction of President Bush being an avowed free trader, yet here is this tariff which is not free trade. What are your concerns about that? How would do you plan to influence the administration to keep this tariff in place, which is not free trade? LaVigne: Well, we look at it from the other side of that, Bill. Free trade is a competitive market. When you have a monopoly youre not in a free trade situation. So in our minds, and in our case and we truly believe this, is that if you um get rid of the tariff, to the detriment of the Florida grower, what youre doing is enhancing a monopoly. That is not in the best interest of free trade. If you have a better solution well listen to that solution, but it is not in the be st interest of the US government to promote a monopoly. The [Bush] Administration understands that. Theyve said you know youre right and various economic panels [that] Ive presented this to the first think they [ask] is What about the comparative advan tage? I say, How can you have a comparative advantage when one country controls the distribution? I know its just orange juice. People say its not OPEC, its not oil, but this is peoples livelihood. This is something the vast majority of US citizens dr ink as a nutritious, healthy beverage. And youre going to give this to one country and, essentially, three entities as a monopoly? Thats not free trade. Thats what I think is the nature of the new trade negotiations that make the challenge for, now, Amb assador Portman, but then Ambassador Zellik, even more difficult. Mansfield: What about the producers a processors I guess you call them? I believe about half of the processors in Florida are Brazilian companies?

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18 LaVigne: Yes. Mansfield: How do you deal with them? LaVigne: Over all, we have a pretty good relationship. I mean most of the people that work in those plants, they were there when [the plant] was a US, or a French entity, you know, not under the Brazilian ownership. So there is a pretty good r elationship there. Sometimes there are challenges, when we get into various global issues. Weve actually worked with them on some issues of international interest, [issues of] standards and quality on orange juice. But, over all, the relationship with the m is pretty good, even given some of the tension thats out there. Ive been surprised that its been good. But, like youve said, roughly 40% to 50% [of the processing plants in Florida are owned by Brazilians.] Its just [the processing] plants, its not in groves. I think its also [in their interests] in spreading their not liability, but [reducing their risks] hedging their bets, to make sure that if there is a disaster [in the groves] down there, theyll have something here, and vice versa. Also, they can bring their product here and repackage it and distribute it, from bulk to packaged [juice], in the United States, youve got that ability to blend [orange juice] here and other issues like that. So, they want to have a presence in the largest mark et I the world. Mansfield: Well, I guess well sort of move from citrus to that lawsuit, these citrus growers are suing the Florida Department of Citrus over the box tax. Tell me your take on that. LaVigne: Well, I think what weve seen is the evolution of the advertising program and the Department of Citrus and Citrus Commissions role in this arena. You know the Department of Citrus, when it began back in the 30s was the driving force for developing [frozen] concentrated orange juice, not from concentr ate orange juice and then a lot of the other research that was done on packaged products and fresh products and things like that.

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19 Also advertising, you know [invoking advertising images] the days of waking up with the blue bird, the sunshine tree and all of that. Its evolved this industry in the United States into an orange juice consuming market. But there are also some growers, the ones who are filed the case, who feel that the advertising has not evolved with [the market] or been able to [keep up] wit h it. The benefit [of the advertising] doesnt just go back to the people paying the tab. Some of that benefit goes to the people who import, principally the Brazilians. And they are not paying. So youve got that free rider concept in there that has cause d a lot of consternation. And, realistically Bill, I think there has been other politics in the industry over the last five to ten years, that has further facilitated that action. The citrus industry is not the only one with this of a marketing or adverti sing program that is under fire right now. [The beef industry is.] Pork is. Milk is. Mushrooms, Washington apples, all of those programs that were essentially set up to be grower advertising programs are under stress from the people who pay it. [Its usua lly small numbers but there is some level of that unrest.] Thats what youve got in this case. Mansfield: Okay thats a good description of the problem. What could you tell me about Florida Citrus Mutual s position on that [lawsuit]. LaVigne: We have w eve always been supportive of the Departments advertising programs. There have been various times when weve questioned certain parts of it, as far as where monies were being spent, or what the tax level was, given the market situations for the growers. But weve always bee n supportive of the advertising program and [the] other responsibilities of the Department. Right now, as we look at it, the board of Mutual has decided, since it is a legal case and there is nothing we could do, one way or the other, is to see how the court rules on the advertising section. To begin having discussions about what we do in other areas of concern that falls under the purview of the Department. But ultimately that advertising component is going to be decided by the Florid a State Supreme Court and the US Supreme Court. Were waiting to see how that evolves.

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20 Mansfield: So, youre just going to sit back on the sidelines, waiting to see what happens? LaVigne: Yes. Unfortunately there is nothing we can do about it. Once it g ets to that court level, theres been a lot of discussions over the last four or five years, since the case was filed, about How do we solve this? How do we move on from here? But now that it is at the point where it is, all you do is cause further conste rnation in the industry. Its better to focus on the issues you can have impact on and let the Supreme Court rule. Mansfield: Im a little hesitant to ask this next question, but I feel like I should. Some of the people Ive interviewed have said that Flo rida Citrus Mutual was not meeting their needs. Thats why theres been a proliferation of these smaller citrus organizations. How would you respond to that? LaVigne: Well, I think that was the case, probably in the 90s as various issues arose. It was a different time, different leadership here at the association. As the industry has evolved and consolidated, I think we have done everything to try and bring the industry together, handle those issues, help those regional groups address that. I think that was an issue previously. I dont believe its an issue today. I think, as we go forward, our efforts are to coordinate the industry. A lot of this evolved out of the CTOC, realizing that weve got just a heck of a history here, very well received by both o ur neighbors and friends in the state; the state legislature, the federal legislature and the administration (and previous administrations). Weve got a lot of positives there and we cant be perceived that here is infighting within the industry. Pulling that together, even through some of the stresses weve experienced, hurricanes and canker and things like that, will only help the growers long term. Mansfield: It does seem like the growers have been under I dont know if siege is the right word, but be tween the hurricanes, canker, Brazilians and the pressure from real

PAGE 22

21 estate developers, it seems like the Florida citrus grower the orange grower has really been battling. LaVigne: Its been about five years of one challenge [End Tape 1, Side A. Begin T ape 1, Side B.] LaVigne: after another. Hopefully were through some of those. Our hope is that as we go forward [in] the next couple of years well get our hands around this canker situation. We are cautiously optimistic on our position, where we stand with the trade issues, and the hurricanes, while they were devastating to the industry, probably caused a positive impact on smaller crops, draw down, carry over and reserve product. So the supply is lower and the demand, hopefully, we can bring [it] back up. So, all of those forces will be positive for the grower. To a large extent, there is not a lot you can do about the land issues. Were probably going through what California went through in the 80s and 90s. That will evolve. What we will see is tho se citrus growers, who are in areas where they can produce very good yields, have strong groves and are not right next to a developing Publix, Wal Mart, or something else, will stay in business. As long as most of the dynamics remain constant they will be economically viable for the long term. Mansfield: You said that, I guess it was about ten years ago when there was this unrest among the growers, that there were these different issues and different conditions, could you tell me about those? LaVigne: Ye s. We had the Gulf area for a matter of fact, Gulf Citrus Growers began, [as] an effort to try and put the Gulf name on demand. Like Indian River Grapefruit was, they wanted, I forget what they called it, Sunshine Gulf, or Gulf Sunshine Grapefruit, they wa nted to have that branded almost. It didnt evolve to that. So they began to handle local issues and others and it evolved into a different entity.

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22 The Highlands area, their association began in the early 90s because of some environmental issues that ar ose and, at the time, Mutuals leadership chose not to get involved and take a leadership role there. They felt they had to do something, so they did it themselves and started their organization. They do local issues. Peace River wanted to be similar to Gulf, where they had a Peace River region and an identity. So, it evolved that was the effort there. The challenge that we have is when you deal with these legislators or the public, or Washington, or Tallahassee. They look at us as Florida Citrus. They d ont look at us as regions or counties or anything like that. So I think weve evolved back to realizing the strength of a unit, instead of separate entities. We brought that back into, I think, into um perspective and been able to have the success we have had with disaster assistance and canker assistance and the tariff and other things along those lines. Mansfield: So, its safe to say that, the challenges by these [adversities] and the citrus tariff legislation has united the citrus growers? LaVigne: Y es. I think more than ever. And the one outlying factor there Bill, is the grower lawsuit. There, youve got a very strong contingent out there who are supportive of generic advertising. Youve got a contingent out there who dont believe it has the same i mpact that it did before. And, youve got a contingent somewhat in the middle. Theyre concerned about whether its having an impact anymore, but they dont know what to do if we got rid of it. Youve really got three areas there that you know and ultima tely the Supreme Court is going to decide it. Mansfield: Well, maybe its for the best that the Supreme Court is going to do it and you dont have to. LaVigne: [Laughs] I would agree with you on that.

PAGE 24

23 Mansfield: Well, in talking, you mentioned the peopl e on the Citrus [Tariff] Oversight Committee and you said that they ranged from one hundred and twenty five thousand acres to LaVigne: A hundred and twenty five acres. Mansfield: A hundred and twenty five? LaVigne: To seventy thousand. Mansfield: Oh a hundred and twenty five. LaVigne: Yes, just a hundred and twenty five, small to large. Mansfield: Okay that knocks the wind [out of my question.] LaVigne: Small to large. Mansfield: Cause I was thinking, if thats the case, the small grower is un der represented there. LaVigne: Oh no, hes represented. Mansfield: Well, what do you feel like the future holds for the small grower? Because Ive had people express concerns about them. LaVigne: Well the challenge that weve got with that, and its l ike with any business, any entity, any community, whether its your small banks or whether its your mom and pop corner store, or its your citrus grower or other commodity producers. The small grower has a harder time with efficiencies, you know. Where th e small grower is going to continue to be successful is [if] they do as much of it as they can themselves, or internally

PAGE 25

24 with their families. They have high producing groves and are in an area that enables them you know they dont have the pressures of sel ling out. And [if] they are able to come together in some co operative fashion, whether its with a co op, Like Citrus World, or whether its with a handler who handles smaller acreage s and can sell that in a large bundle. Thats where they can make decent money on that property. I think part of it too is as the economics of the industry change, if all of those other factors come into play, then the prices they will receive will come up. So [in] a lot of respects, I dont see it different than any other i ndustry. Youve seen an evolution away from small town banks; now were seeing it come back to it. You know you see small town banks start back up because people want that kind of small town service. And legislation has changed and made it easier. I think youll see that same evolution in our industry. Youll have your large guys, who are international corporations. Who invest in it and its part of their portfolio and an insurance company. And then youll see those mom and pop operations who have thirty f ive to a hundred acres and still make a good profit off of it and pass it down to their children. Mansfield: What is Florida Citrus Mutual doing to help the small grower? LaVigne: I believe that as we look at hurricane assistance, [for example] providing that assistance all the way from the small grower to the large grower. Giving them the ability to recover from that, helping to develop other risk management tools, like crop insurance that makes it viable for them. Interacting with their county governmen ts and their tax assessors at certain times, to make sure that their taxes are within reason for an agricultural operation. Trying to fund research that will enable them to produce more on smaller acreage. Or give them other varieties, where they could pla nt ten acres of a specialty fresh fruit; that would be very valuable to them and the can care for it themselves. [Were working on] a variety of things that gives them those options; as well helping them look at those options on paper. Lets look at the ec onomics of it. What is it going cost you to put in? When can you get your first crop? Whats the market for it?

PAGE 26

25 Those kinds of things. And helping them [by] providing decision making tools that can make their operation viable down the road. Mansfield: Oka y. Ill ask a couple of more questions and turn you loose. LaVigne: Okay. Ive got a couple of minutes, cause Ive got to get on a call at 10:15. Mansfield: In that case, is there any question you want to answer that I havent asked? Or anything you wa nt to comment on that I havent asked about? LaVigne: [sighs] I think the only thing is, as Ive evolved in this position, the one major thing that Ive seen is an industry that has been so active (and I mentioned this earlier, to emphasize it) so active in the development of this state, the evolution of this state. I think the people that have been here a number of years realize that. Citrus growers are a very hardy lot, like a lot of agriculturist. They overcome freezes and market situations and pests and disease and even the economics of land values. You see a lot of folks selling their groves now, that are close to developments, and turning around and buying more grove and land to plant groves. So I think what well see in the long term, as we look ba ck in history; twenty five fifty years there will still be a very strong industry. It may not be eight hundred thousand acres, or seven hundred fifty thousand acres, may be it will be five hundred thousand, but it still producing very high yields and is ve r y competitive. Hopefully, working with the Brazilians and opening up opportunities in places like China and India and around the globe. Mansfield: Okay. That seems like a real good place to stop and let me than you for taking the time to talk with me this morning. And remind you that the information youve shared with me will be deposited in the Special Collections of the University of South Floridas library and I need to get you to sign a release from for us. LaVigne: Okay. I can do that. No proble m. [End of interview]


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