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Sweet taste of success

October 08, 2005

PROTECTIONISTS WHO CRIED OUT against the North American Free Trade Agreement now have guacamole all over their faces.

Before NAFTA was enacted in 1994, U.S. avocado growers wailed that lifting barriers to Mexican avocados would ruin their industry. Today they are thriving, as are avocado growers in Mexico. And the pact is having another key effect seldom mentioned by those who decry NAFTA or a more recent trade deal with Central America: The growth of the Mexican avocado industry is creating jobs that encourage people to stay home instead of emigrating illegally to the U.S.

Because of objections from U.S. growers, Mexican avocados have been phased in slowly since 1994. In 1997, they were allowed for four months of the year in 18 states. On Jan. 31, they were allowed year-round in 47 states. They won't be allowed in California, Florida and Hawaii until 2007.

Meanwhile, the growth in demand has been dramatic. Avocado sales in the United States this year are projected to increase 80% compared with 2000; Mexican exports will more than double in volume this year over last, and demand for avocados in the U.S. keeps growing at 15% a year. The rise in demand and continued import restrictions mean prices haven't fallen, but they are likely to drop in the future.

Despite the new competition, few American growers have suffered, and some have profited handsomely. Last month, for example, Santa Paula-based Calavo Growers, which markets fresh and processed avocados, reported record quarterly revenues and profits.

A similar success story is fast developing in the Mexican state of Michoacan, where the avocado industry has been brought back to life after decades of hardship. Signs of prosperity are evident in the areas surrounding the city of Uruapan as the avocado industry pumps about $400 million into the local economy. The number of certified growers in the state has grown from 60 in 1997 to 2,500.

Traditionally, Michoacan has been one of the top five Mexican states that send immigrants to the U.S. Now that the avocado industry is thriving, would-be immigrants are opting to stay home to fill the newly created jobs. Shopping centers are booming, and so is home construction. Wages have grown 25% to 33% in two years. Trade with the United States also has paid dividends when it comes to the quality of Mexican produce: To address U.S. concerns, Mexican growers have put in place rigorous monitoring and pest-control programs.

Salsa has replaced ketchup as the nation's favorite condiment; perhaps it's little wonder that guacamole may now be its favorite dip.

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