This Fourth of July many Americans will bite into juicy red Florida tomatoes on their hamburgers and in their salads. Unfortunately a push by the Coalition of Immokalee Workers (CIW) for above-market pay for Florida’s tomato pickers is driving production away from Florida markets and towards California and Mexico, where pay is lower.
In 2010 the Coalition of Immokalee Workers announced a deal with the Florida Tomato Growers Exchange to extend the CIW’s Fair Foods Program (FFP) to 90 percent of Florida’s tomato industry. The project encourages large tomato purchasers, such as McDonald’s and Wal-Mart, to purchase Florida tomatoes exclusively from FFP-cooperating producers.
The FFP improves the lives of workers in these farms by ensuring a strict code of conduct, a method to issue and resolve complaints without fear of retribution, a health and safety program, and a worker-to-worker education process. The system improves working conditions, ends forced labor and farm violence, and audits companies’ compliance through a third party. The program has succeeded in enforcing ethical working conditions.
However, the FFP also requires purchasers of tomatoes to pay a one-cent premium on every pound of tomatoes. This goes directly to the salaries of field workers, making a significant difference in worker pay, since tomato laborers used to earn $40 to $70 per day before FFP reforms, compared to $50 to $80 per day now. So far $20 million in Fair Food Premiums have gone directly to workers. While raising wages for farm workers is a well-intentioned cause, wage hikes have caused an exodus of jobs away from Florida tomatoes and toward regions with worse conditions, including lower pay.
Basic economics dictates that when the price of tomatoes rises, buyers will purchase less—moving purchases elsewhere or buying fewer total tomatoes. That’s why the FFP premium on tomato price has reduced the viability of Florida tomato production and diminished agricultural employment. According to USDA data, Florida’s fresh tomato production value in the five years before the rise of the FFP (2006-2010) averaged $550 million per year. Over the next five years, production value averaged $438 million, a decrease of 21 percent. Other conditions, such as weather and technology, may have factored into the decline, but over the same periods, average Florida citrus sales value (on-tree) grew by 6.6 percent. The Fair Food Premium pushed much of the tomato industry out of Florida, and agricultural jobs left with it. BLS data confirms this, showing that farmworker and laborer employment in Florida fell 41 percent from 2010 to 2015.
Wendy’s, the most recent target of the CIW’s campaign to acquire more partner-buyers, stopped buying Florida tomatoes altogether in the face of pressure to join the FFP. The company website explained that paying the premium is, in effect, paying the employees of another company, which Wendy’s has no desire to do.
Much of the lost tomato production moved to Mexico, where tomato pickers face far worse conditions and make far less money-- the equivalent of eight to ten dollars per day. Despite additional tomato tariffs enacted in 2013, Mexican tomato imports into the United States were 48 percent higher per year in the 2011-2015 period than the 2006-2010 period, according to International Trade Center data. So as farm labor jobs in Florida fell, jobs in Mexico grew.
If the FFP truly wants to help farm workers, they should drop the tomato premium to give more workers the opportunity to work in a market with relatively higher U.S. wages and access to FFP basic workplace protections. By ending the Fair Food premium, the CIW can do more good for tomato pickers. It is time for them to stop listening to their hearts, and start listening to economics.
Nick Archer is an E21 contributor.
Interested in real economic insights? Want to stay ahead of the competition? Each weekday morning, E21 delivers a short email that includes E21 exclusive commentaries and the latest market news and updates from Washington. Sign up for the E21 Morning Ebrief.