Posted on: Saturday, March 19, 2005

Garlic imports creating a stink

By Jerry Hirsch and Don Lee
Los Angeles Times

When California farmers complain about the stink in the garlic market these days, they aren't talking about the pungent aroma emanating from the fields around Gilroy, the nation's garlic capital.

The thousands of shipping containers full of Chinese garlic passing through the ports of Long Beach and Los Angeles are what have put their noses out of joint.

Growers say exporters from China are using a loophole in trade laws to dump millions of pounds into the United States, eating away at a market once dominated by California farmers.

For the first time, last year imports of fresh garlic from China to America outstripped the state's production of 81 million pounds, said the Fresh Garlic Producers Association.

The Chinese imports totaled 86 million pounds, 10 times their level three years earlier.

The foreign garlic has contributed to a 12 percent drop since 2001 in the average price California farmers receive, according to state figures. That has cut into their bottom lines.

"We have not made a profit in two years," said Joe Lane, co-owner of Garlic Co., a major grower in Bakersfield, Calif.

The Chinese typically sell a 30-pound box in the United States for $11 to $12 — and occasionally cut the price to half that. To make any money, Lane said, he needs to collect upward of $20 for a box of that weight, depending on the size and quality of the bulbs.

California accounts for more than 90 percent of the nation's garlic production, but it is a shrinking industry. Farmers here grew $129.5 million of the herb last year, according to state figures, compared with $269 million eight years ago.

Growers are leaving the business or scaling back their operations by canceling leases for prime growing plots in Gilroy and the Central Valley or by shifting to other crops.

What's especially irksome to growers is that they fought this battle once before and thought they had it won.

In 1994, U.S. trade officials determined that Chinese exporters were pumping garlic into the market at far less than their cost of production. So the government levied a 377 percent duty on the produce.

A year later, Congress amended the regulations to allow shippers who were not part of the original trade probe to post bonds instead of paying the duties or putting up cash deposits. If dumping is found to have occurred, U.S. Customs is supposed to use the bond to collect duties and penalties.

California growers say this loophole has let the Chinese resume selling garlic below cost in the United States.

"They want to corner the U.S. market," said Michael Coursey, a Washington, D.C.-based attorney for the garlic trade group.