Talon News - Good Local News


Chile Tax Burns New Mexican Families


August 3, 2018


Chile Tax Burns New Mexican Families

by Jacque Ritchie and Pilar Owens, TALON

Do yourself a favor, never get between a New Mexican and their chile. That is what Washington's 'Trade War' has gone and done and it's got NM's chile producers and consumers fired-up. Trump's recent tariffs on imports from countries in the E.U., Mexico, Canada and China have resulted in those countries slapping U.S. manufacturers, ranchers and farmers (including NM chile, and pecan growers) with 'retaliatory tariffs.' According to a July 3, press release from the Democratic Party of New Mexico, the New Mexico Chile Growers Association reports tariffs threaten to effect 5,000 New Mexico families that rely on the chile industry to survive.

The Department of Finance Canada reports, "Countermeasures in response to unjustified tariffs on Canadian Steel and Aluminum products will result in 10 to 25 percent surtax on exports to Canada. According to the Canadian government report; chile, salsas and sauces will fall in the 10 percent range. Director of Marketing Development for the New Mexico Department of Agriculture (NMDA) David Lucero reports in 2017; NM exported $1,508,191 worth of crushed red chile, $45,589 fresh peppers, and $78,849 dried chile to Canada. Jason New of NMDA International Trade, Marketing and Development Division reports that in 2017 NM exported $427,579 worth of sauces, mixed condiments and seasonings to Canada.

According to New Mexico State University, chiles (Capsicum annuum) have been grown in New Mexico for 400 years and continue to be an important cash crop for farmers, with most chiles being grown and sold under contract to processors like Bueno Foods, headquartered in the Barelas neighborhood of Albuquerque. After 67 years in business Bueno Foods is a U.S. leader in the chile industry employing 275 to 400 New Mexicans annually. The Bueno website reports that NAFTA led to the steady decline of NM chile industry by making buying cheaper foriegn chile from Mexico, Peru and India more palatable; "NAFTA offers no protection to NM chile industry."

Green chiles are typically roasted, peeled and canned or frozen while red chiles are strung into ristras or dried and packaged as whole pods to be processed into flakes or powder. These ingredients also go into salsas, sauces and prepared foods. NMSU reports that NM currently averages between 8,000 and 10,000 acres harvested annually and that chiles for local sale make up a relatively small part of total commercial chile acreage. According to the USDA National Agricultural Statistics Service 2017 chile production in NM actually fell by 12 percent to 8,100 acres in 2017.

Rick Ledbetter President of the New Mexico Chile Association (NMCA) said that chile production has been "trending down" for over 20 years, "We are way down from 35,000 acres, that's what it used to be." In a recent phone interview with TALON Ledbetter blames two major problems for the decline in production saying, "The only solution for the future is mechanization of harvesting." Ledbetter says that traditionally chile has been harvested by hand because all the pods on a plant do not ripen at the same time, making the crop extremely labor intensive. Sources report foreign chile can be harvested for labor costs of $2 a day versus NM growers price of $9-10 dollars an hour per worker. Ledbetter said, "We are working very hard to see a mechanical solution in the future." According to Lebetter the second problem NM chile growers face is a lack of affordable labor available for the harvest. For this Ledbetter blames the Clinton era policy known as the North American Free Trade Agreement (NAFTA). "NAFTA wrecked the chile business in New Mexico...It's just really hard to navigate all the red tape in hiring the H-2a workers you need." Ledbetter is currently working to produce his 44th consecutive crop on his farm near Portales and worries how he will bring in the harvest, "Nothing will make you sicker than to look out over the field and know you won't be able to get it in...it's a terrible waste."

The H-2a program establishes a means for agricultural employers who anticipate a shortage of domestic workers to bring Non-Immigrant Foreign Workers to the U.S. to perform agricultural labor or services on a seasonal or temporary basis. Ledbetter says he understands the current administration's recent crack-down on illegal immigrants but also sees a need for foreign labor, "I get that we want the best and the brightest to come here, I really do get that but, there is a place for unskilled labor too."

As for the Trump administration policy of levying tariffs as a solution to existing trade imbalances, Ledbetter said, "We love to see tariffs on finished products coming into the country, especially from China. China's really killing us on trade, they should be made to pay...Mexico is the least of our problems with trade. We have a great working relationship with Mexico as far as chile goes. We have some of the best processing facilities right here on this side of the border. We really don't need any politicians mucking things up."

Selling only "fresh market chile" Navajo Agricultural Products Industry (NAPI) has no official opinion on Trump's trade tariffs. In an e-mail exchange with TALON, NAPI Maketing Director Hal Thompson wrote, "Protectionism will benefit some domestic industries and hurt others. Tariffs will always hurt free trade and cause economic imbalance."

NAPI was established in 1970 to manage NIIP (Navajo Indian Irrigation Project) and also to create economic opportunities for the Navajo people. Farming approximately 110,630 acres annually, NAPI employs 200 full time employees and 200-300 seasonal workers making it one of the area's agribusiness leaders. Thompson contends, "The current trade situation has lowered the selling price for most of the items that American farmers produce. This is not good for the American farm economy." Thompson is hopeful that the administration's proposed $12 billion farm relief package will provide some necessary relief.

This year, marks the third year NAPI is growing green chile, using six 30-by-96 foot 'hoop houses' equaling 3-5 acres. Shen Nezwood, NAPI's Conservation Manager estimates a yield of between 4,000 and 6,000 pounds saying, that although the cost of harvesting manually is high, "Expansion is in the near future and hoop houses are extending our growing season/market." NAPI also produces alfalfa, corn, small grains, potatoes and beans.

NAPI Interim Chief Executive Officer Lionel Haskie tells TALON; "We have a responsibility to contribute to the regional food production economy and the people of the Navajo Nation and New Mexico. Our mission is to continue the legacy of Navajo farming, producing superior products and practicing stewardship and creating value for our people. Our vision is farming sustainability across generations to cultivate a healthy nation."


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