Fresh garlic industry threatened by Chinese imports

By Martha Mendoza The Associated Press
Wednesday January 16, 2002

GILROY — Americans love garlic, but growers here say illegal Chinese imports, unpredictable weather and soaring land costs are threatening to squeeze the domestic garlic industry right out of its stinky business. 

The Fresh Garlic Producers Association complained last month to the U.S. Customs Service that Chinese garlic — which is supposed to pay a 376 percent tariff before it enters the country — is slipping its way through ports in New York, Miami, Long Beach, Calif., and Puerto Rico in shipping containers from Thailand and Vietnam. 

The garlic in those containers, said association spokesman Jim Provost, is being sold — without tariffs — for about 30 percent below domestic prices. 

“We’re facing a looming threat from these illegal imports,” Provost said. 

Customs Service officials confirmed they’re looking into the complaints, the latest development in what has been a decade-long challenge to restrict illegal Chinese garlic imports. 

“As long as there is a demand for garlic in the U.S. and a supply in China, they’re going to try to get it in,” said Kevin McCann, an international trade specialist with Customs Service in Washington, D.C.. “But they’re certainly not going to pay the 376 percent tariff, so they’ll try other things.” 

McCann said investigators have been working in recent weeks in Long Beach, the primary port for garlic imports, and that some type of intervention action will be taking place in the near future. 

Chinese trade ministry officials in Beijing said they had prepared answers to questions raised by the Associated Press about garlic, but had not received approval to release those responses. 

At Christopher Ranch, the nation’s leading fresh garlic producer about 100 miles south of San Francisco in Gilroy, spokeswoman Patsy Ross said trade transgressions are not their only problem. 

“This is a fragile industry,” she said, standing in a bustling garlic-packing warehouse thick with fumes. “There are a lot of things that are out of our control.” 

El Nino’s 1997 torrential rains, for example, left floods in the fields and a rusty fungus on the garlic, wiping out about a third of the 1998 harvest. And increasing property values — particularly in California where 84 percent of U.S. garlic is grown — have pushed farmers off their fields and out of the industry. 

But the largest threat of all has come from China, the largest garlic producer in the world with 13 billion pounds a year, accounting for 66 percent of the world output. 

U.S. garlic growers fought for and won relief from cheap Chinese imports in 1994, when the International Trade Commission issued an antidumping order and imposed the highest tariff in existence on any agricultural product — 376 percent. 

Those limits initially slowed the flood of Chinese garlic that had gone from about 3 million pounds a year in 1992 to 64 million pounds — almost half the entire U.S. market at the time — by 1994. 

But since 1994, there have been regular attempts to dodge the tariff, according to researchers at the National Food and Agriculture Policy Project in Mesa, Ariz. 

For example, in April 1997, some traders said their Chinese garlic imports originated from Vietnam, Taiwan or Thailand to avoid paying duties. Laboratory tests of minerals in the garlic were able to show the true source. 

In February 1997, two California importers of Chinese garlic pleaded guilty to avoiding more than $9 million in customs duties.  

In that case, importer Jimmy Tani of LaPuente, Calif., was sentenced to 18 months in federal prison for circumventing U.S. trade laws. 

Garlic industry attorney Mike Coursey said imports from Thailand suspiciously shot up last year, and that domestic garlic producers estimate between 10 and 15 million pounds of Chinese garlic leaked into the United States illegally. 

“There’s been a ferocious increase coming in shipping containers supposedly filled with Thai garlic, and there’s no way that the product coming in is actually Thai,” he said. “It’s beautiful Chinese garlic, quite different from what’s grown in Thailand. There’s just no doubt about it.” 

The United States isn’t the only country to scuffle with China over garlic. Thailand, Canada, Mexico, Israel, and most of Europe have tariffs in place against Chinese garlic, which reaches those markets at just 15 cents a pound, about one-fourth of what it costs other countries to produce. 

And just last year, garlic became a key issue in a Chinese trade dispute with South Korea. The two countries had been wrangling over the issue since June 2000, when South Korea imposed a 315-percent tariff on cheap Chinese garlic to protect its farmers. 

In Gilroy, the “Garlic Capital of the World,” locals pay close attention to threats to the industry, and look forward to additional federal action. One thing that helps, say garlic industry experts, is that demand continues to increase. 

Last year, U.S. citizens averaged two pounds of garlic each, according to the Department of Agriculture. And, on any given day, one out of five people in this country eat some garlic, more than french fries or ketchup. 

Joann Kessler, who helps organize the Gilroy Garlic Festival that brings more than $7 million and 125,000 people to town each year, said threats to garlic are no joking matter. 

“We take our garlic very seriously here,” she said. 


On the Net: 

USDA garlic data: http://www.ers.usda.gov/publications/AgOutlook/Jun2000/ao272e.pdf 

U.S. Customs Service: http://www.customs.treas.gov/ 

Gilroy Garlic Festival: http://www.gilroygarlicfestival.com/