THE GREEN GIANT DOESN’T LIVE IN CALIFORNIA ANYMORE - Foodopoly: The Battle Over the Future of Food and Farming in America - page 52

consumers and to differentiate their stores from others. Some even require that the quality exceed USDA
grading standards.
All of the economic pressures put on packer/shippers are passed on to growers, resulting in less prof-
itability for them. Fees for cold storage, packing, and wholesale marketing services reduce revenue. The
demand for standardization and low prices is making it increasingly difficult for small and midsize growers
to make a living. More diverse marketing opportunities existed in the past, such as large wholesale termin-
al markets.
Historically located at city railway terminals, a range of produce wholesalers and brokers bought and
sold crops that were ready for delivery immediately or in the near future. Large numbers of independent
sales took place, and the prices paid were transparent. But, much to the detriment of smaller growers, few
wholesale terminals are still in business. Only thirteen still operate today, selling to small grocery stores,
restaurants, and institutions.
Growers have also used cooperatives as a strategy to enable them to control price and marketing. Coop-
eratives are geared to a specific type of produce and provide a variety of services, including cold storage,
packing, transportation, technical assistance, and marketing. Although the co-op is run collectively, many
small and midsize growers are dissatisfied with large ones, such as Sun-Maid (raisins), Blue Diamond
(nuts), and Sunkist (oranges). Large co-ops are dominated by and run for the benefit of the very largest
growers and operate more like large corporations than member-owned and -operated entities.
The many risks and difficulties of selling produce has led to “contract agriculture.” More than 20 per-
cent of vegetable and fruit production in the United States is done through some kind of contract arrange-
ment between the grower and a “first handler” of the crop—usually either a packer or a food-processing
company. Growers are at a disadvantage when negotiating a contract with a large firm that has legal rep-
resentation and often uses a standard contract.
The types of arrangements used differ, depending on the segment of the produce industry. Agreements
between growers and packer/shippers usually do not include a set price; they use the market price at the
time of the sale. Contracting for processed fruits and vegetables usually includes a set price, which is lower
than a grower might receive on the open market. Contracts have been used by large international compan-
ies like Chiquita for decades. Global vegetable and fruit sourcing has led to an increase in contract agricul-
ture in developing countries for crops beyond bananas, pineapples, and other tropical fruits.
Along with the consolidation of the retail industry, global trade in produce is an important factor in the
reshaping of the produce industry. Today the United States imports more fruits, nuts, and fresh and pro-
cessed vegetables than are produced domestically, both in tonnage and dollar value. Between 2001 and
2010, the country had a net trade deficit of $2.6 billion in fruits and nuts, $19.5 billion in processed fruits
and vegetables, and $18.5 billion in fresh vegetables.
Retailers' demands for year-round produce that has the same characteristics and quality in January as in
July has not only changed American eating habits and expectations, it has completely changed the produce
business. These large retailers and their trade associations, such as the Grocery Manufacturers Association
(GMA), which represent the interests of retailers, were among the most vocal supporters of global food
trade during the policy debates around the United States' membership in the World Trade Organization
(WTO), both for lower costs and procurement opportunities. Trade agreements not only facilitate exporta-
tion by foreign companies, they enable American corporations to establish low-cost arrangements for ship-
ping fruit and vegetable products back to the U.S. market.
Global trade and the rise of the retail grocery chains has doubled the amount of fresh and processed fruit
and vegetable imports since the 1990s. Although imported produce once consisted primarily of tropical
fruits and fresh vegetables during the winter months, now Americans are eating more of these imported
fruits and vegetables year-round. Crops such as tomatoes, cucumbers, potatoes, and melons that can be