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Tomato Catch Up

Tomatoes are the latest Canadian trade product called "unfair" by our Southern neighbours.

We say tomato, they say underpriced-oversubsidized-foreign-product-that-threatens-the-livelihood-of-the-American-farmer.

While the Canadian Lumber industry is still reeling from a U.S. government decision to impose a 20 per cent tariff on Canada’s softwood lumber exports – an industry worth $10 billion – American greenhouse farmers are asking the U.S. Department of commerce to impose a duty on Canadian exports of hothouse tomatoes.

Although this may seem laughable compared to the layoffs and plant closures that the softwood tariffs are expected to cause, hothouse tomatoes were a $244 million industry for Canada in 2000, and represented $98.2 million in revenues for B.C.’s greenhouse farmers.

Until American hothouse farmers sounded the alarm bells, hothouse tomatoes were a bright spot on the agricultural scene, with the value of the market increasing every year since 1998, according to B.C. Stats. As recently as 1996, Canada only exported 21.8 million kilograms of hothouse tomatoes south. By 2000, that quantity had increased to 101.4 million kilograms. There are no statistics dealing specifically with the hothouse tomatoes, but the majority of export tomatoes – especially from B.C. – are greenhouse grown.

In 2000, Canadian farmers grew 182.4 million kg of greenhouse tomatoes, and 519.2 million kg of the field variety – 99 per cent of which were grown in Ontario. Ontario was also responsible for 72 per cent of Canada’s greenhouse tomatoes.

The American farmers claim that Canadian farmers are essentially "dumping" underpriced tomatoes on the market, claiming that Canadian hothouse growers are selling their wares in the U.S. at prices below production costs and domestic costs, and that this practice is inflicting "material injury" on the U.S. greenhouse industry.

The U.S. International Trade Commission has ruled to support this claim of "material injury," and the U.S. Department of Commerce is initiating an anti-dumping investigation.

Central to the whole argument is whether tomatoes grown in the greenhouse should be lumped together with tomatoes grown in the field. Canadian tomato growers are arguing that both hothouse and field tomatoes, fresh or chilled, should be counted together, since the greenhouse tomatoes must compete with field tomatoes and vice versa. The price of one tomato affects the price of another, and a low price for field tomatoes means a lower price for the hothouse variety.

American greenhouse tomato growers argue that the two varieties cannot be lumped together, that the way they are grown is important when differentiating between products. Hothouse tomatoes cost more to produce, they are marketed differently, and there are real inherent physical differences that matter to customers.

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