Domestic Support and Border Measures for Processed Horticultural Products

In horticultural markets, trade barriers often apply to the processed products whereas domestic support applies to farm-produced raw commodities. Here we assess the effects of such trade barriers and domestic support by simulating the effects of policy reform on global processing tomato markets, which are faced with modest processed product tariffs and high domestic support in the European Union (EU). Both protection and EU subsidy drive down world welfare, but we find that reducing import tariffs for tomato products would yield greater effects on markets and larger welfare impacts outside Europe than would reductions in EU domestic support.     

The Effects of NAFTA on Trade and Welfare in the U.S. Fresh Tomato Industry

Abstract

The purpose of this study was to measure NAFTA's impact to date and quantify how the producers and consumers of fresh tomatoes in the United States, Canada and Mexico have benefited or lost. Changes in consumer and producer surpluses were calculated in 2001 US dollars based on simulations of two scenarios. The analysis found that U.S. consumers captured $12.1 billion more surplus than they would have captured had NAFTA not been enacted. Mexican fresh tomato producers gained an additional $2.08 billion in surplus due to NAFTA. In contrast to Mexican growers, U.S. and Canadian producers appear not to have benefited economically from NAFTA. Findings suggest that U.S. producers would have earned $3.29 billion more if NAFTA had not gone into effect. Canadian producer surplus with NAFTA was estimated to be approximately $20 million less with NAFTA, and the total net benefit from NAFTA was found to be a positive $10.87 billion.     

Demand for collective food‐safety standards

In 2007, leading members of the U.S. fresh‐tomato industry responded to pressure from the U.S. Food and Drug Administration regarding the industry's long history of poor food‐safety outcomes and adopted a set of standards for production practices related to food safety at all levels of the fresh‐tomato supply chain. Adherence to these standards was required under a federal marketing order that applied to essentially all tomatoes grown in Florida. The California Tomato Farmers cooperative, whose members produced the vast majority of fresh tomatoes grown in California, also required that its members adopt these standards. The collective food‐safety standards for fresh tomatoes closely resemble the requirements of the U.S. Food Safety Modernization Act (FSMA) Produce Safety Rule, so the collective adoption of these standards provides an excellent case study to illustrate the possible effects of FSMA implementation on demand. I assess the hypothesis that demand for tomatoes from Florida and California increased following the adoption of standards for food‐safety practices by growers in those states, relative to demand for tomatoes from other regions. My analysis demonstrates essentially no evidence that demand for fresh tomatoes responded positively to the implementation of collective food‐safety practices.     

Tomato Farmers and Modernising Value Chains in Indonesia

The tomato value chain in Indonesia has transformed in the last two decades. We assess this transformation here, focusing on small tomato farmers in West Java and the determinants of their market-channel choices (as well as the technology correlates of those choices). These farmers sell to traditional village traders, urban and modern wholesalers, and supermarkets, and they have all invested heavily in irrigation and rely on external inputs. We find differences among farmers selling to different market channels. To wit, non-land assets—especially irrigation—are important to farmers participating in the supermarket, or modern, channel, but farm size affects modern-channel participation only in high-level commercial zones (zones dense in infrastructure and near highways). We also find that modern-channel farmers earn more profit than farmers in other channels but do not necessarily use chemicals more intensively. Yet hardly any farmers sell graded tomatoes; the main ‘capture of rents’ goes to specialised and modernising wholesalers.