WTO Listening Session
June 16, 1999
|MR. MANNING: Next presenter is Harry Fulton. He is
representing the Mississippi Beekeepers. He is a honey producer and he's here from
Mississippi State, Mississippi.
MR. FULTON: Thank you, Earl. It's been a long day and I forget one speaker this morning had been from Louisiana and (inaudible harvester; is that true? Well, we can't wait to get you on a beehive.
It is a great pleasure for me to be here to present the case of the beekeeping industry. I personally do not know anything about trade law, trade negotiations or trade agreements, but I'm here to present a plea for our industry. I have a number of exhibits which are I probably won't discuss today for timesaver, but they are in the written presentation I presented. Beekeeping has been fights an influx of cheap, imported honey for a number of years. Beekeeping is labor intensive and that's one of the reasons I want to get you folks over here in a beehive. With the current standard of living and the high cost of production in the U.S., it's very difficult to compete on an international market. Costs of producing honey in the U.S. and Mississippi is currently ten percent or more higher than income. In other words, the industry is going to go broke if something is not done correctly. Right now most beekeeping operations are operating on the equity built up in 1980 and early 1990's when it was profitable. Thank goodness most of the equipment they use, the hives themselves and processing equipment, have a long life and you can imagine when this wears out what's going to happen.
Let's look at prices. Wholesale prices paid the producer in Mississippi for the 1998 honey crop have dropped at least 20 percent since 1997, and as whole nationwide 13 percent and worse yet, prices are still declining in 1999. Right now in Mississippi 46 cents a pound is the best looking gift for our lower grades of honey and usually in Mississippi we reduced the lower grade of honey. That can be compared to over 80 cents a pound in 1997 for the '97 crop. Prices not paid to importers is about 45 cents and the industry can find no reason except that imported honey has taken away the market and depressed prices.
Generally the demand for honey in the U.S. is increasing due to the efforts of the National Honey Board, but right now I guess you could say, well, the producers that are organizing the National Honey Board could help pay for it, help pay the assessment. I must say that importers are paying assessment, too, and the packers. They're not giving -- the producers are not receiving the dividends of their efforts. In 1994, 1995, the U.S. industry spent approximately 500 thousand dollars in legal fees alone to win an antidumping suit against the Chinese. At that time immediate prices increased to a level where beekeeping was profitable. Still, yet, we have a annual bill of over 50 thousand dollars for legal fees just to monitor the suspension agreement with China which happens to expire next August, not this coming August but August 2000.
Now once you know that occurs Argentina jumps into the market in a big way and there is some evidence that they are now, too, violating the U.S. trade laws and the industry would be forced to spend another 300 to 500 thousand dollars in legal files to fight in a government campaign for these countries to buy both of these countries consume very little honey but they're very big players in the market. They produce a lot. As proof that imports affect our marketability, all we have to do is look at the USDA's statistics. Pay attention. Carryover of the 1998 honey crop was at 80.8 million pounds. That's 37 percent of the crop and that's an increase of 14 percent from 1997. So far in 1999 carryover -- excuse me, current imports of the first quarter of 1999 35.3 million pounds, which is well above last year's rate of imports. And listen, assessment which importers and producers pay on honey in 1997 were 57 percent of all assessments collected. In other words, all commercial honey sold in this country 57 percent of it the assessment on imported honey in 1997 that was increased ten percent from 1996. So 42 percent of all honey assessments were produced in honey in this country. We're capable of producing 220 million pounds of honey in the U.S., as evidenced last year. That's 63 percent of the U.S. consumption, about 350 million pounds.
So we can see where we have at least 20 percent of our crop that we have to find a market for overseas or even hold over. Unfortunately, our exports are one, one half percent. So we need some improvement.
We need some help on the international market finding a market for our honey here if we're going to allow imported honey to take our market in this country. That's not easy because most at other countries have very high tariffs. We've heard that mentioned quite a few times. Right now our producers in the country are forced to hold their honey placed in a nonrecourse loan at a price that's below the break even point. They still have to pay a point nine percent per pound service fee and interest rate on top of that, and then they have pray that they can get a price of at least 59 and a half cents a pound so they can pay their loan back. In closing the Mississippi Beekeepers Association and, of course, the National Organization, request that the U.S. trade officials take a tougher stand on honey that's found to be in violation of trade laws at our ports of entry. It should be seized and/or destroyed so they cannot find their way back into our channel of trade. We would like to remind you people of the importance of maintaining a viable beekeeping industry storage for agriculture production because many, many of our ag crops in the food items that we depend on, need honeybees for pollination.
Most of the wild population of bees have been destroyed by parasitic mites, so we have to depend on our domesticated honeybees.
To summarize, the demand for honey increases. The amount of honey being imported is increasing drastically and beekeepers cannot make a profit. We need to find a way to increase exports. One half percent of our crop is not a healthy figure. Tariffs need to be lifted in other countries and an international grade standard for honey should be adopted. Otherwise, the bottom line is that the beekeeping industry will need relief from imported honey.
One last comment, it's not understandable that a depressed industry, the beekeeping industry, must pay tremendous amounts of dollars in legal fees to attempt to solve the problem when the government could do it maybe with the stroke of a pen. That's all. Thank you.