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interviewed by William Mansfield.
Tampa, Fla. :
University of South Florida Tampa Library,
1 sound file (65 min.) :
digital, MPEG4 file +
e 1 transcript (digital, PDF file)
Florida citrus oral history project
The interview focuses on Stuart as president and CEO for the Florida Fruit and Vegetable Association. Discussion includes NAFTA and its impact on fruit and vegetable growers in Florida and California, the affect of lobbying and the future of the citrus industry in Florida.
Mode of access: World Wide Web.
Interview conducted May 10, 2005, in Maitland, Fla.
t Treaties, etc.
1992 Oct. 7.
Citrus fruit industry
Tariff on oranges.
University of South Florida Libraries.
Florida Studies Center.
Oral History Program.
University of South Florida.
University of South Florida.
Globalization Research Center.
y USF ONLINE ACCESS
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
Citrus Oral History Project Globalization Research Center University of South Florida Interview with: Mike Stuart Interviewed by: William Mansfield Location: Maitland, Florida Date: May 10, 2005 Transcribed by: Wm. Mansfield Edited by: Wm. Mansfield [Tape 1, Side A.] Bill Mansfield: I always but a label on the disk by saying, This is Bill Mansfield from the University of South Floridas Globalization Research Center talking to Mr. Mike Stuart here in is this Orlando or Maitland? Mike Stuart: Mait land Mansfield: Okay, Florida on May 10, 2005. And Mr. Stuart, we always get people to start out by stating their name and telling when they were born and where they were born. Stuart: Okay, my name is Mike Stuart. I was born in Pasadena, California on October 14, 1953. Mansfield: Okay. And I reckon you grew up in California? Stuart: I did. I spent the first thirty eight years of my life in southern California. Born and raised in a suburb of Los Angeles. And, again, spent the first thirty eight years t here, before moving to Florida in 1992. Mansfield: Okay. Tell me about your education. Where did you go to school?
2 Stuart: For my secondary education [I] went to schools in the Pasadena area, private, parochial schools. Then for college [I] went to Cal. State University at Long Beach. I have a degree in journalism, of all things. Mansfield: Well tell me how you, I guess this is fruit and vegetables, so Ill say, tell me how you got connected working in agriculture? Stuart: Actually through the retail si de of the business. When I was in my early years of college [I] went to work for a small independent grocery store in the Pasadena area, where I grew up. [I] did that for a couple of years and then had the opportunity to work in their produce section. When I was at Long Beach State, worked for a couple of different stores. Got married and went to work for a medium sized, high end chain down in the Newport Beach area. Spent a few years working for them in produce and then when I got of school an opportunity became available to work for a ah association of growers based in California. They did a variety of different things for the industry, everything from lobbying to marketing to you know the usual things associations do communications. They had a magazine a nd there was an opportunity to go to work for them writing for their magazine. I thought it was a great way to, kind of bridge my journalism background, from school, with something I had been doing to pay my way through school (working in the fruit and veg etable side of the retail grocery business). So I went to work for them for literally a couple of years well it wasnt just a couple of years; it was a lot of years. But I thought it would be a couple of years, writing for their magazine and newsletter and doing that type of thing. [I] got to really like the industry and the people in it. One thing led to another and I stayed with the m for thirteen years, until I jumped ship and came to Florida. So it was really a city up bringing. But I think its been i nteresting because its brought me a little bit of a different perspective to what I do. Compared to a lot of the folks that run associations, or are involved in associations in agriculture, that grew up on the farm, or have spent their whole life involved in farming in some way.
3 Mansfield: You said you were working in produce, could you explain that for me? Stuart: Well, literally [I] was merchandizing fruits and vegetables, clerking in the grocery stores. I had a very good friend of mine; in fact he was one of the guys in my wedding, whose dad owned a whole sale business in the Los Angeles produce market. Spent a lot of time with them and dealing with that business and getting to know how that whole sale side of the business worked. In fact they served o ne of the stores that I originally worked for. So I got to know the whole sale side of the business, a little bit, through them. In fact, that friend of mine now runs the business, in the LA market. Hes still in it. But again, my experience was really on the retail side and not on the production side. When I started with Western Growers I had to learn all about the farming end of agriculture. Mansfield: You said that Western Growers did all the usual things that associations do, there are a lot of people who dont know what associations do. Stuart: Well, trade associations, whether they are agricultural associations or associations representing, doctors or lawyers, for that matter, all do a fundamentally, the same things. Thats advocacy work; government relations, whether thats at the local, state, regional, national, or in some cases, international levels. They all provide their members some degree of communications or information sharing capability, whether thats producing news letters or magazines or web sites or rather detailed grass roots information sharing mechanism. They all do that kind of thing. Then they will get involved in individual services, whether thats insurance programs or providing different kinds of consulting work on labor rela tions or environmental type of activities. Those are some of the things that we did. Mansfield: The main thing people have been talking about is TFAA Stuart: FTAA
4 Mansfield: FTAA, Free Trade of the Americas. Stuart: Right. Mansfield: But it seems like this really started with NAFTA [North American Free Trade Agreement] back in the Stuart: Well it actually started a long time before that. The whole notion of establishing uh bilateral or regional types of free trade arrangements goes all the way back uh decades. But really the proliferation of them started back in the early 80s. The real first foray that the United States had in it was the US Israel free trade agreement, which was negotiated, back in the early 80s. There then was an agreement called the Caribbean Basin Initiative, which is kind of the foundation under which the current CAFTA [Caribbean Area Free Trade Agreement] agreement is built. That was put together and passed by Congress, back in 1984 or 1985, somewhere in that neighborhood. Th e CBI [Caribbean Basin Initiative] was really a one way deal. That was simply the US eliminating its trade barriers on probably, 90% to 95% of all trade coming from the Caribbean and Central American Countries as away to help stabilize both their economies and their political structures. At that point in time, we all know were in some state of flux and uncertainty. So, that became an effort not some much to facilitate trade but to drive both economic and political stability in those countries. And engender a tighter relationship between the countries, for a variety of geopolitical and economic reasons. Then you had the US Canada Free Trade Agreement and negotiations. That made a lot of sense, just simply because you share a three thousand mile boarder betwe en the US and Canada. The economies are similar in nature. Ive had some of my friends in Canada try and explain to me, over the years, that theirs is a developing country. But I dont think anybody really buys that. But you know, the currency levels, for the most part are somewhat similar (although, there have been some changes) but the agricultural infrastructure is very similar. So, it was relatively easy to come to that kind of agreement.
5 And that was really one of the first comprehensive agreements. T hat was put together. Although there were some exceptions in that agreement, most noticeably some of the old Section 22 commodities, the dairy and those kinds of commodities, where there are import quotas and that type of thing involved. Essentially as the Canadian Agreement was being finalized, some discussion evolved about the possibility of having a US Mexico Free Trade Agreement. That was in an on again off again mode, for a number of years. All of a sudden, back in the late 80s, very early 90s the po litical motivation was there to start that process. It then kind of looped in to include Canada on a three way negotiation and thats where the NAFTA, the North American Free Trade component came in. Those negotiations took place, during the early 90s and [it] was eventually signed into law actually went into effect in January of 1994. Of course, during that time you had the Uruguay round negotiations, which began in the mid to late 80s, 1986. Which continued on and wasnt implemented the early 90s as w ell. So, that kind of over laid the NAFTA negotiations and everything else that was going on. So it was a very complex period. Not unlike what we have here today, where we have, simultaneously, the FTAA negotiations under way. [Along with] a number of regi onal and bilateral agreements that have been passed by congress or are in the process of being negotiated by the United States and Bahrain, Morocco, Australia, Chile, I mean the list is very long at this point in time. Then of course we have the big Doha development round, which is the multi lateral or WTO [World Trade Organization] negotiations that are going on, overlaying all of this. Here again, were in a very complex period, when it comes to all of these trade agreements. Mansfield: Thats one of th e reasons they wanted to do this project now, because often history is written long after the event. But in the negotiations for NAFTA, Ive read and have been told that there were some fears that produce, fruits and vegetables coming in from Mexico would put American fruit and vegetable growers at a disadvantage.
6 Stuart: Well the fact of the matter is they already were at a disadvantage. Mexicos labor structure, regulatory structure is not the same as what exists here in the US. So when you look at input costs, particularly for fruits and vegetables, which are very labor intensive, Mexico already had a fairly significant input cost advantage. Where Mexico had difficulty competitively was just in the mere cost of transporting those products from West Mexic o, central West Mexico, all the way into US markets. Obviously, they are going to be more competitive the closer those markets are to the Mexican boarder. So they were very competitive at the time in market is the southwestern and western US, simply becau se of the proximity issue. We got into markets in Chicago, New York and Philadelphia and that type of thing. The transportation costs, depending on where markets were for individual commodities, could present so challenges for them. With NAFTA, over a ten year period you had the eliminations of tariffs take place. Depending on the tariff levels before NAFTA kicked in (which were either fairly large or insignificant), over time that has made Mexico just that much more competitive throughout the US. Mans field: What was the Western Growers Associations position on NAFTA? Stuart: Very similar to the position here in Florida [over the FTAA], the difference being Florida, really at the height of it winter vegetable season, really competes with no one in the United States. There is no one that can grow tomatoes, bell peppers, cucumbers, squash and strawberries and other commodities during the winter months the way Florida can. I mean California produces lettuce and some items during the winter months and does a very, very good job of it. But on those flowering vegetable types the only competition for Florida (during the winter months) is Mexico. California had concerns on the shoulders of their seasons, to the degree there was lettuce production in Mexico, ob viously that was a concern. Melons and other types of commodities that California also produces, there were some significant concerns with Mexico. But California was in the frying pan, but Florida was in the fire during the NAFTA negotiations.
7 Mansfield: So the Western Growers Association was in opposition to the NAFTA? Stuart: Well, yeah, I think over all you can say that. I think what we were trying to do at the time in California was to strike the best deal we possibly could in the negotiations. [Consi dering] the fact that at the time, it was apparent to us that it was unlikely we would be able to exempt ourselves from the negotiations. The idea was to get as long a phase in period for the individual items as humanly possible. [This] would allow the in dustry time to make whatever adjustments where needed in order to keep ourselves competitive with the people south of the boarder. Mansfield: And what did you all do try and effect legislation? Who do you go to negotiate? Stuart: It wasnt so much effec ting legislation. It was just simply working with the US Trade Representatives office and the Department of Agriculture, essentially those who were sitting down and negotiating the agreement, to craft the best possible package that we could. That involved trying to extend the phase out period. During all of these negotiations, the way they work (and this really came true the NAFTA) is that there are a series of baskets that each individual item would fall into. The baskets were (well use letters) A woul d be immediate phase out of the tariffs. B would be intermediate phase out, of five years. C would be a longer term phase out at ten years. And in the case of NAFTA they had a category called C+ which was over ten years, And there were some items, i ncluding Florida citrus, that were included in a fifteen year phase out that was structured somewhat differently. Most of the commodities and their had a straight line phase out. Some of these C+ categories had more of a waterfall effect. The tariffs e ssentially maintained a level plane over a period of time (say for ten to twelve years) but then at the twelfth year it fell off precipitously, to zero. Thats kind of where we are with Florida citrus.
8 Mansfield: You said you worked with the trade represe ntatives and the Department of Agriculture? Stuart: Right. Mansfield: Could you go into more detail about that? Stuart: Obviously, there are people assigned, within the trade representatives office and the USDA and they work together as a team, to sit down with their counter parts. In the case of NAFTA, with their counterparts form Mexico, to sit down and workout the minutia of those agreements. Then as that process evolves, those base line types of discussions tend to bubble up in the process until the y get to the sub ministerial level. This would be administrators or people in the assistant secretary level, or assistant trade [representative] level. Finally, after a number of years, it bubbles up all the way to the top and the minister office, which w ould be our US Trade Representative and Secretary of Agriculture and the Minister of Trade in Mexico. In the case of NAFTA, chief negotiators have to sit down and look at the whole package and essentially made a determination and whether or not the agreeme nt, as negotiated is the best deal that they could get. At that point in time, if the administration of each country believes that they got a deal that makes sense recognizing that in any agreement youre going to have some people that will fare better th an others you take it and present it to Congress and hope that theyll approve it. Mansfield: So thats how the system works. But Id be more interested in knowing what you all did. Who did you approach? What did you say to them? More of a hands on Stua rt: W ell you have to take a step back and determine what products are going to be effected most severely. You cant just take a shotgun approach at the process and say that everything at the end of the day is going to be negatively effected. You really hav e to ratchet it down to the point where you [ask] Where a re our real problems? Then you got to go back and develop the economic arguments that backup the case your trying to
9 make. Thats working with the people at you land grant [universities], private ec onomists and even working within the Department of Agriculture, with their economic group. And the International Trade Commission plays a legislatively mandated role in that, looking at how these agreements would effect individual products, whether its in agriculture or [manufacturing]. Thats their job, to look specifically at how these agreements would affect individual commodities. You kind of aggregate that all together and walk into the Department of Agriculture, or the US Trade Representatives Offic e and say, Look, if we do this, if we take these tariffs to zero, this is the type of displacement were going to have in the US. [Whatever the item might be, tomatoes, or citrus, in terms of the loss of production, loss of self sufficiency it really ma kes sense for the US to maintain production of those items. This insures we have a domestic supply of those products.] Not to mention the other impacts to rural economies and that type of time, whether they be in California and Arizona, or Texas of Florida or where ever those items happen to be produced. They tend not to be produced in Miami or Tampa. They tend to be produced in fairly rural areas around the state. So thats the case you have to make. Quite frankly, those cases are weighed against other c ases that are presented. They are also weighed against the cases presented by the other country. Thats the challenge the negotiators have, is sitting down and taking all of that input and saying, Okay, what is it we really have to workout here? What do w e have to give up in the process, in order to obtain our goals? Whether its Mexico on a bilateral basis, or the whether hits the entire world on Doha or Uruguay Round basis. Mansfield: When I interviewed Mr. Bouis he talked about attempting to organiz e different grower organizations to unite in opposition to this part of NAFTA. What do you know about that? Stuart: There certainly was an effort to bring folks together. There was a moderate amount of cooperation, but quite frankly, with in the fruit and vegetable sector in the US, agreements affect different people in different ways.
10 For example, the apple industry was very much a proponent of NAFTA, because, number one, they had no tariffs and number two, they saw a tremendous market potential in Mexic o. At that time there was essentially a prohibition on US apples moving into Mexico. They saw that as very much an opportunity. So, you know when you have competing interests within an industry sector like that, it makes unity pretty darn difficult. With in your spectrum you have your poles, so you have a couple here at opposite ends. Then in the middle you got a whole bunch of other folks. In order to have unity you got to focus in one area. And fortunately it tends to be towards the middle, because your e never going to get [the extremes to come together]. Sometimes its pretty tough to get people at the [extremes] to even walk an inch towards the middle. That was the challenge we had, from an organizational or logistical standpoint, of trying to bring d isparate interests to the table, within an industry. That led to some of Franks frustration. Because he tried to identify some folks he felt should all feel the same way. But even in Western Growers there were disparate interests, in terms of what threats or opportunities NAFTA presented. Again, for Florida it was all one way way. It was coming in this direction. There was really no reciprocal opportunities in Mexico that would mitigate their opposition to the agreement. Whereas in California, Texas, the northwest and other areas [they perceived] at least enough opportunity there to have a dampening effect on the hard line opposition in the agreement. Mansfield: I just want to make sure I understand you correctly. Certain sectors of the industry saw oppor tunities in approving NAFTA? Stuart: [Nods his head: affirmative.] Mansfield: Which sectors of the industry were they? Stuart: A lot of the tree fruit folks saw opportunity down there, apples, deciduous fruits. You know Mexico doesnt grow a lot of peac hes, pears and nectarines. So there was an opportunity there, to some degree; and still is in Mexico. One of the biggest frustrations
11 for the Californian deciduous fruit industry, some eleven years after the agreements been in place, they are still wrangl ing with Mexico in getting fruit into the country. We still cant get citrus into Mexico from Florida, despite the fact that there is some opportunity for fresh citrus in Mexico, from Florida. So some of those frustrations exist. But having said that, te n, twelve years ago, there were barriers that existed were tariff related. NAFTA was an opportunity to remove some of those tariffs. In California, you also had folks that were farming on both sides of the boarder. That has a mitigating impact, because you re not totally united from the standpoint if you had tomato producers in California that are growing tomatoes in the winter time in Mexico and in the spring, summer and fall in California. That Mexico production is part of their year round production capa bility. It is very important to them. Removing an 8% to 10% tariff equivalent, ad valorem equivalent was something that was attractive to them. That had a dampening effect. Mansfield: Okay. Now well jump from California and the Western Growers Associatio n to here in Florida. Stuart: Sure. Mansfield: I know that the Mexican citrus has not affected Florida citrus, as people originally thought. They tell me that the Mexicans dont have the infrastructure to export citrus here. But what about, the other f ruits and vegetables, like tomatoes? Stuart: Well, Ill still make a case for citrus. Because as I mentioned to you earlier, I dont think the final chapter in that book has been written. There was and still is a very precipitous fall in the tariff that w ill occur on FCOJ [Frozen Concentrated Orange Juice] in single strength juice coming in from Mexico. The fifteen year agreement started in 2004. The real precipitous fall in that tariff doesnt start occurring, really until this year and next year. Then it falls off dramatically until it hits zero. So that significant tariff has still been there. And it is a significant tariff on FCOJ and single strength juice coming in from anywhere (Brazil, Mexico, where ever it happens to be coming from).
12 So whether or not that tariff reduction, from an economic standpoint will provide some economic incentive for Mexico to go out and upgrade and improve their infrastructure for grove development, maintenance and processing improvements, remains to be seen. I havent wri tten that threat off. I personally still think its out there. Now there are lot of people who are a lot smarter than I am, on the subject. But if you just look at the veneer of the issue, with the way the NAFTA agreement was structured on citrus, its wor ked as it was intended to. It was designed to extend that pain as far out as possible. Will the pain ultimately come? I dont think we know. It hasnt yet, but as I said, I dont think that chapter has been written yet. Mansfield: Okay, but I mentioned to matoes and other vegetables because one man I interviewed mentioned a lot of the vegetables grown around Lake Okeechobee werent being grown there any more, because they had been replaced by Mexican vegetables. Stuart: What specifically was he mentioning? Mansfield: Tomatoes. Stuart: Tomatoes havent been grown around Lake Okeechobee in twenty or thirty years. Mansfield: Well that might explain it. Okay, lets get back to Florida citrus and the threat, Mexico, thats coming. But [the threat from thre at from removing the Brazilian tariff] seems to be whats concerning people now. Stuart: Yeah, cause Brazil is the eight hundred pound gorilla of the citrus industry, worldwide. It is significantly bigger than the Florida industry in term of the number of boxes produced. It is a huge looming threat out there, no question. It is probably the darkest cloud that hangs over the Florida citrus industry.
13 Youve got a problem with canker in the state right now. But in the longer term, I think were going to be at the canker thing. Whether or not we can keep our finger in the dike with Brazil remains to be seen. Mansfield: Well what is Florida Fruit and Vegetable Association doing to influence affect legislation? Stuart: Well theres an effort being coordinated actually through Florida Citrus Mutual, that is trying to bring the citrus industry together. And it has brought the citrus industry together, to specifically hold on to that tariff in the FTAA negotiations. Essentially the objective is to exempt citrus from the agreement. There is a historical precedent for exempting certain items from agreements in the past. And given the competitive nature of the Brazilian industry and the Florida industry, were really talking about two states here. The Brazilian ind ustry is really concentrated in a very, very few hands. Their production costs, going back to the discussion we had earlier, are from a labor standpoint, a fraction of what they are here in Florida. Which is problematic. So as a result, think there is a go od economic argument out there for maintaining that tariff and maintaining a viable industry here in Florida. Otherwise, if the tariff goes away, I think the studies have pretty well show that the face of the Florida citrus industry [will] change dramatic ally, over a period of time; until were not much of citrus player anymore and Brazil essentially has a monopolistic position in the world orange juice market. If the objective of these agreements is to enhance competition to benefit consumers, in this pa rticular case a good case has been made that it will have the opposite effect. But if you havent talked to Andy LaVigne, at Florida Citrus Mutual, you need to. Andy is the quarter back on that activity and were one of the spokes in the wheel. Were worki ng with the industry to do that, but hes the quarterback. (To mix my metaphors.) Mansfield: [laughs] Well tell me what you all are doing. What is this spoke doing?
14 Stuart: Well, what were doing is obviously cooperating in that process. But weve got th is organization is very, very diverse in term of the commodities we represent. We represent the vegetable industry in the state. Weve got a significant citrus membership. Weve got sugar cane producers that are members of the organization, tropical fruit, sod and a number of other commodities. So, its always a challenge for us when these agreements are negotiated, because weve got so many hats to wear for different groups. It makes it very, very challenging. Our objective here, as it is with all agreeme nts, is to try and work with the negotiators as good a foundation in these agreements as we possibly can. So that when it comes to individual commodities theyve got the ability to go in and make their individual cases. Mansfield: Youve said you represen ted many groups, from sod and sugar cane, how do you Im trying to think of the best way to put this question Stuart: I think I know where youre headed. Most of those groups have individual organizations that really carry the banner for their individual tariffs or aspects that are specific to their organizations. Its tough for use to do that. We do it in some cases, simply because there are no other groups out there doing it for them. But again, our the majority of our efforts have to be focused on the broader issues within these agreements in terms of their over all structure and what they call modalities the structure of the negotiations and how they fit. Then working with them to advance the cause of individual commodity positions, whether its orange juice or tomatoes, or tropical fruit, or whatever the issue happens to be. Mansfield: But you talked about, and worked with the Western Growers Association, how the apple people were in favor of NAFTA and some of the fruit and vegetable people were leery of it others had interests in Mexico. Stuart: Right. Mansfield: How does that compare with
15 Stuart: Its very similar, very similar. What we did at Western Growers, back in during the NAFTA and Uruguay Round negotiations was, again, to try and build th at solid foundation. So that you did have a tariff reduction structure, that for highly sensitive products allowed for as long a phase out as is possible, within the confines of the negotiations. To try and develop some kind of a safeguard that would provi de some interim help for commodities that needed it. We still havent gotten there on that issue. Thats still something that I fervently believe remains to be developed. But weve got that typical square peg were trying to fit into a round hole. It just doesnt work. But thats something that were working on. The good news with that is, I think we probably have more support in some of the lessor developed countries as well as in developed countries, like Japan and to a lessor extent, Europe. [They] see the needs for those kinds of special safeguards for seasonal and highly perishable types of products. Mansfield: But here in Florida, is there anyone who would like to see the tariff removed? Stuart: In citrus? Mansfield: Or in fruits and vegetables in general. Stuart: For FTAA, if they are out there I dont know who they are. Mansfield: How do you enlist the fruit and vegetable people, who arent citrus [growers] into supporting this program to keep the tariff in place? Stuart: Well, you cant. In th ose respects each commodity group has to carry their own water. For the most part, youre not going to get the citrus guys to carry the vegetable industrys water and vice versa. Now if there is a commonality to the issue, where you can link those up, then yes there is an opportunity to go out and do that. But idea of the vegetable guys going up to Washington and sitting down and arguing for the maintenance
16 of the citrus tariff, thats pretty unlikely. Theyre not going to do it. And there is no reason for them to do it. For that matter, there is not much creditability in doing it either. If I was a [trade] negotiator and some vegetable guy came in suggested that they not eliminate the citrus tariff, Id have to ask the question, Why are you concerned abou t it? Hows that going to effect your business. Mansfield: I asked that question because the other people Ive interviewed have talked about trying to contact individual representatives in the congress and senate and trying to sway them to their way of t hinking. So in order to build a large front of growers, they tried to enlist folks as allies. So I was curious about Stuart: Yeah, but lets face it, youre not going to spend your political capital unless there is going to be value in it for you. There h as got to be some threat or benefit coming back to the individual to motivate them to do that. You got tot find out what that is. And if it is out there, sure you can try and convince them to make that argument. At the end of the day, for the members of th e delegation, or more broadly the congress, its all about votes. Unless youve got critical mass of support for your case, youre not going to get very fare in the process. Theres twenty five members of the Florida delegation that are out there, that ar e potentially allies. You got to talk to everyone of those offices. You got to stay with them, answer any questions they may have and be as believable as humanly possible in making those arguments. If you throw a bunch of garbage out there, eventually they are going to see it for what it is. Your ability to hold on to them is going to be pretty marginal. You got to make a good creditable case, you just cant throw them a bunch of fluff. Mansfield: So how does Florida Fruit and Vegetable association build a creditable case? Stuart: Well you got to go back and do the economic work. Youve got to have a solid case for what youre trying to do. And in the case of the citrus industry and FTAA I think that case has been made very, very well.
17 Mansfield: What do you think will happen if the tariff is repealed? Stuart: Well, I youre better off talking to the economists at the University of Florida or elsewhere on that. Theyve done the modeling on that. Guys like Tom Spreen and others can sit down and give you that kind of information. Again, I think over time the differences in production costs will results in lower returns and on a pounds per solid basis and thats going to erode the economic viability of the industry. Whether that happens in one year or five years, or fifteen or twenty years again thats something for the economists. Ive seen whats happened with the vegetable industry in Florida. After NAFTA passed, some remarkable things happened. There was a significant devaluation of the Peso, which crea ted a tremendous advantage for Mexico in exporting vegetables here. It came in, in a big, big way. It came in at very low prices. Prices that were profitable for producers in Mexico because of the exchange differences. They were picking up dollars in retur n for what they were shipping. It hurt a lot of small tomato growers her e in the state. The reason we dont have a lot of small tomato growers here in Florida is because the only way they could survive is improve their economy of scale. And so now youve got a few big players and virtually no small growers. The small growers that are out there are aligned with and economically dependant upon the larger grower shipper marketing organizations. Mansfield: So theres been a concentration of tomato growers? S tuart: Definitely. You know we used to count them in the hundreds, now we count them in the dozens. Mansfield: What do you see as the future for Florida citrus? Stuart: It all depends on what happens with Brazil. It depends on what happens with cankers. Ands it depends on what happens with how many people keep moving into the
18 state of Florida. You know there are a lot variables in the equation. I dont know. Depending on which day of the week it is, which hat do you want me to put on? I can argue just abo ut anybody can argue the case in different ways. As far as the canker issue is concerned there is a road map there. As long as we can keep funds coming and keep the issue out of the courts, there is a road map to solve that problem. If we can maintain th e tariff I think there is a road map there that over time insures that youve got a healthy, vital, viable industry. The urban pressure, you know is a question. You look at parts of the state now; youre seeing golf course communities pop up in. Ten or fi fteen years ago people didnt think that would happen in a hundred years. Here we are a decade or so later and they are showing up. You just never know. Florida is a very attractive state; from a real estate stand point. There are still a lot of people mov ing here. Theres that pressure along the coast and as its density increases it forces people inland. Thats where you get into some of the prime citrus and vegetable growing areas. All you have to do is drive down the east coast, starting in southern Brev ard County and Indian River County. All the way down to Palm Beach and Broward County [youll] see whats going on in real estate in Florida; the conflict that is there, in terms of land use, between agriculture and development. In many cases them is u s. If youve got an orange grove or a grapefruit grove that is a producing asset. Ultimately the question has to be asked is that asset producing as much as a grapefruit grove as it would as a strip mall or a housing development? Thats a decision only a landowner can make. So those pressures are here and they are mounting. I think at the end of the day thats where the biggest competition comes from, all else being equal. Mansfield: Ive had several people comment on the pressure to sell. Barren grove s are now going for as much as productive groves. Stuart: Its all about the land. Mansfield: What are you hearing from your constitutes, about pressure from development and the threat of
19 Stuart: Here again, it depends on who you talk to. This years be en unique because of the impact of the three hurricanes. But last year, if you walked around and talked to folks down in the Indian River [area], it might be crass to say, but the market was so bad those walking around with a smile on their face were the o nes with a land deal going on. Those who were somber were those who were relying on the grapefruit to pay the bills. Again, thats changed this year; there isnt any grapefruit to ship, because of the storms. So everybody is a dark mood. But there are stil l folks doing land deals. I dont think the pressure on that is going to subside. Its just going to intensify all of the time. What the long term impact of the storms are, remains to be seen. Quite frankly, I think whats going to happen is youre going to see some marginal producing groves, some older groves, that might have some disease or pest pressure it may make sense, at this point in time, to do something else with that ground. And to the degree that, that happens it can change the economics of th e grapefruit business. But thats not a one or two year process. That has a longer horizon, its hard to say. Mansfield: That brings up another question, talking about the smaller growers and the large growers. What are you hearing from the large growers and the small growers? Are you hearing the same arguments, different arguments? Stuart: Well, you know a large integrated citrus operation is going to have different challenges than a small grower who just may own fifteen to twenty acres. Thats not thei r line of business. Theyre just an investor and thats what they own. It goes through a packing house and then from that packinghouse to a processor, or going straight to a processor. So the challenges are all different, depending on the size and what th ey are growing and whether its going to fresh or the processed market. But a small citrus grower, if hes got good variety, can get a return [End Tape 1, Side A. Begin Tape 1, Side B.] Stuart: on that investment. He certainly could this year, parti cularly in grapefruit, if they happen to be in the right place. But again this was a unique situation. A lot of small
20 growers in oranges for processing, particularly in some early mid and other varieties have been struggling. Those guys are having a tough time. Its hard to look at that investment and argue that its really returning what you could get doing something else with [that land]. In some cases you dont have much choice, because there is a lot of development going on. But thats changing. Mansfi eld: Like I said, some people are just waiting for the right offer to come along. But you talked earlier about working with Florida Citrus Mutual. Tell me more about the lobbying efforts of Florida Fruit and Vegetable. Stuart: On what? Mansfield: On the FTAA. Stuart: Well, again, were a member of the team. To the degree that we need to get up and through our efforts talk to some folks in Washington. We have in the past and will do that in the future. But, again, were part of the team when it comes to citrus and the FTAA. Were not leading the charge. So we do not go up independently of what that joint effort would do and lobby either the Administration or Congress. It would be part of a coordinated effort. Mansfield: So you follow the lead of Citrus Mutual? Stuart: Well, on that issue, yeah. It doesnt do us any good to have a bunch of chiefs I mane somebodys got to be the quarterback for citrus in that effort and thats Citrus Mutual. I think weve all identified them as the group to do that. Ma nsfield: Well is Andy LaVigne the quarterback? Stuart: Yeah.
21 Mansfield: Well, Ill have many, many questions when it is time to talk with him. Ive been throwing questions at you for the past hour, is there anything you want to comment on that I havent asked about? Stuart: No. I think weve pretty much covered the waterfront. Again, the process of negotiating these agreements has gotten incredibly complex. If I look back at what was involved ten or fifteen years ago, twenty years ago it seemed complex at the time [laughs] but it was really pretty straightforward. Now, with just the multitude of different things that are going on you could spend (and people do) all your time doing nothing but monitoring these agreements and providing input to the Adminis tration and Congress about the impact or potential impact of those agreements on their respective industries. When youve got something going on at the WTO level and these huge regional bilateral agreements and these individual bilateral things which tend to bubble up. What you see happen with these bilateral agreements tends to bubble up to the larger agreements. You cant just worry about the big picture youve got to focus on the smaller deals too. Something could happen there that could become the foun dation for a larger agreement latter on. You ve got to stay on top of it. The other thing is, Congress is playing a much more intensive role than they have in the past as these agreements develop. It used to be theyd wait until it showed up on their doorste p. But now members of Congress, on both sides, are weighing in and weighing in very strongly with the way they thing things ought to be done. You know, they cant meddle and get involved with the negotiations themselves but the can certainly have conversat ions with people at senior levels at he US Trade Representatives office or at the USDA. They tell them what they think, whether its about Florida citrus or sugar whatever it happens to be. The good news about that is the Administration, generally, t hat kind of a process leads to an agreement that is ultimately going to be more acceptable to the Congress. But in the case of CAFTA, even with that, its evident at this point in time, the Administration doesnt have the votes to get that one passed. They are going to have to do something somewhere, on one of these sticking points (a major one is sugar) in order to get that one
22 over the hump and get it passed. Because right now it doesnt look like theyve got the votes to get it done. Mansfield: Weve bee n talking about I guess Ive been citrus centric in this. Everybody Ive been talking to has been working in citrus. But who do you see as Stuart: In the FTAA the target is squarely on the citrus industrys back. On NAFTA although there is a lot of atten tion paid to citrus and sugar, the real vulnerability out there was vegetables. It really was. The vegetable industry, because of the nature of production systems, here in Florida and in Mexico, there were no other eight hundred pound gorillas out there, ot her than Mexico. Mansfield: So you think NAFTA has adversely affected Floridas vegetable production? Stuart: Definitely. Its transformed the industry. Its chased the small grower out of the state. A lot of them have gone out of business. We still hav e a large volume of tomatoes and peppers and other commodities being produced in Florida. But its only because of the tenacity and the aggressive posture taken by the industry, to try and maintain and retake market share, after the agreement was passed. In the year or two leading up to NAFTA the market share for Florida tomatoes in the wintertime was about 60% to 65%. But two to three years after that agreement was passed it was 30% for the winter market. There were a whole bunch of things that contribute d to that, but NAFTA was one of them. One of the things that NAFTA did that people dont pay a lot of attention to is the fact that it encouraged a tremendous amount of investment into sectors of Mexican agriculture that were export oriented. In fact Mexi co was looking for that. A lot that investment came from inside Mexico, from non traditional sources. At about that time one of the biggest tobacco companies in Mexico invested heavily in Mexicos tomato business. [They wanted to] increase acreage and ship ping tomatoes to the US. All of that happened at the same time NAFTA came on line. Then you had the depreciation, or devaluation of the Peso, of 40% or more. So it just cascaded into an
23 avalanche of [tomatoes] coming in from Mexico which decimated the ind ustry. It has taken the industry a lot of years to recover. But thats all cyclical. This business is not only cyclical in the medium or long term but its cyclical in the individual seasons. Its a very volatile business. A 2% or 3% increase in supply ca n have disastrous impacts on the market place. Mansfield: Supply is down, the price is up so people produce a lot. Then Stuart: It goes in the tank. The funny thing is, its predictable. Weve gotten to the point now [where] youve got this global appr oach to agricultural production. Just looking at the tomato market in the US, youve got the US production and Mexican production, which is significant. Up in Canada and Europe and now in Mexico, youve got all these hothouse tomatoes. Its all generated t o provide a consistent supply of tomatoes twelve months out of the year. Well th i s industry has always made money on the shoulders, the peaks and valleys of th at production curve. You don t make money at peak production you make money on the shoulders, either com ing up or going down. So when you loose those shoulders the pro fitability of the industry flattens out as well. If y o u flatten it out at a point where the profit is less t han the cost of production you got to find wa ys to save per unit costs, otherwise you r e g oing out of bus i n ess Those who have done that successfull y are the ones who have survived. M a n sfield : Who is the opposition looking t o remove the tariff ? Obviously the Brazilians are, but [who else]? Stuart: I t s the B r azilians They stand to gain. It s market access to the US at a lower cost. It would significantl y reduce their costs. They re the benefi ciaries, to the degree that there are interests in the US that are interested in moving th e FTAA forward and the citrus tariff issue is seen as an obstacle They are the opposition also, because they want to remove t hat obst a c le. The trick is to convin c e them that removing the obstacle is by exempting the pro duct from the negotiations. The difficulty t here is convincing t he
24 Brazilians to do that. It s a big climb. Also trying t o convince the pe ople at the White House and the US Trade Represent ative s office that it s o kay have an agreem e nt that doe s n t include 100% of every tariff line item that the US has. Mansfield: Can you think of peo ple who want FTAA to come through and aren t concerned about citrus, the ones in the Uni ted States. Stuart: Oh there is a whole bunch o f people that want the FTAA to move through. There i s a bunch of people in Florida that want t h e FTAA to go through. There is a very strong business l obby that is focused on the relationship betw een C entral and South America and the state o f Florida, in terms of two way trade. They want this in an awful way. One of their goals is to establish the FTAA secretariat in Miami and have Miami serve as the hub of t he Western Hemisphere for trade and commerce. So all of tha t is at play, here in Florida, while all this is going on. Here again is to try and develop an alliance or partnership with those folks, to allow them to achieve their goal and at the same time preserve Florida s citrus industry. Mansfield: Wh e n you say a business can you be more specific than that? Stuart: I don t think ther e is a business lobby in the state from the C hamber of C ommerce to A ssociated I ndustries all of them, that aren t supportive of the FTAA. M a n sfield: How about outsi de of Florida? Stuart: T he US Chamber of Commerce Mansfield: But no specific industries? Stuart: Virtually every industry. The labor unions are against it, because of the jobs issue. But virtually every business conglomeration and group in the country is supportive of FTAA.
25 M a n sfield: So management is for it and labor is against it? Stuart: Essentially M a n sfield: The one question I didn t ask you wh e n I started and this is a question I ask everybody I in terview, describe your current occupation. St uart: Sure, I m the president and c hief op e rating officer, the full time staff executive We have a chairman and chief executive offi cer who is a producer. They serve two year terms, but they are voluntary leaders. They are not compensated. Mansfield: O kay. So in your pos i tion, what do you do? Stuart: As president ? M a n sfield: As pres ident. Stuart: I over see the day to day op e rati o n of the association I over see our lobbying activities, our lab or and environmental services and so forth C onsulting f unctions that we have here are communications. We also have a subsidiary tha t provides third party administrative services for a large insurance company that s be en tied with the organization for a number of ye ars. Basically I m over seeing all of that. M a n sfield: Do you think it would be possible for m e to t alk to your lobbyi st, to find out how they go about lobbying? Stuart: On this issue? Mansfield : [ N ods his head : affirmative .]
26 Stu a r t: Here again whe n w e lo b by on this, I don t have my lobbyist in DC working on this specific issue. Andy La Vigne is the guy to talk to on that. If they want us to go in and talk with someone we cer tainly will. We re re ady willing and able to do that But that s all in A ndy LaVigne s shop. H e s the guy responsible for tha t. M a n sfield : Okay I hope I have enough time to get him to ans wer these question s for me. Stuart: Well, you need to if this is what the project s all about If you don t talk to him you re going t have a big hole in your information. Mansfield: Well, w e re trying to talk to everyone f r o m the growers to Andy LaVigne to some politicians Stuart: If you re going to talk to someon e you need to talk t o Adam Putnam. M a n sfield: Adam Putnam? He s the Stuart: He represents Florida Twelfth C o ngressional dis trict. Polk County. Mansfield: The man I talked to yesterday was having supper with him. Stuart: Well I was sup posed to have dinner with Adam last night, but it was just too long a day. I saw him for a little bit and came home. Mansfield: Did you talk t o him about this issue? Stuart: W eve talked numerous times about t h is iss u e. Mansfield: Can you share with me what you talked about? Stuart: He knows more about it than I do. He s a citrus grower.
27 Mansfield: I d just be curious to know to get some [id ea] of the interaction b etween you and him about what you said and his response Stuart: At this point in time it s tactical. It s a tactical discussion. It s not a philosophical discussion. Adam Putnam is a Florida citrus g rower. His family has been grow ing citrus for generations. He is fully supportive of the e ffort to try and preserve that tariff. So any discussion I have with him is just merely ta c t i c al, to see what s happening I don t know what I could share with you that would be instructive at this point Mansfield: Just some of the personal interaction that s often missing from the historical record. Stuart: I don t know. Again, here Adam is engaged, as engag ed as anybody in project [can be]. It is something that directly affects him an d a lot of the people in his district So he is taking a very strong leadership ro le in dealing with that. He s part of the process. Mansfie l d: Okay. That sounds like a good place to stop. Stuart: Okay. Mansfield: But I should remind you again that this informat ion will be deposited in the Special Collections of the University Library and we need your permission for researchers to have access to it. Stuart: That s fine. No problem. M a n sfield : W ell l et me turn this thing off. [End of interview.]