For over 30 years, I’ve grown garlic on a small farm in northern New Mexico, selling most of it at farmers markets in Santa Fe, Taos and Los Alamos. I now grow it on about an acre, which yields about a ton of garlic annually.
We are a tiny David compared to Harmoni Spice of Zhengzhou, China, the largest importer of Chinese garlic, and Christopher Ranch in Gilroy, California, the primary distributor of Harmoni’s garlic. Harmoni and Christopher Ranch are the Goliaths of our industry.
All we did was file a formal request with the U.S. Department of Commerce for an administrative review of Harmoni Spice's anti-dumping rate, which is “zero.” Duties are imposed in this country on some 300 products to raise the price of imported products so that they are closer to domestic prices. A rating of “zero” means that no duty is imposed.
At over 19 million metric tons a year, China is now the world's largest producer of garlic, while the United States is down to a mere 175,000 metric tons. Currently, the wholesale price of garlic in China is $1 a kilo, and this has enabled Harmoni Spice, the only garlic importer that pays no duty, to undercut U.S. producers for the past 10 years. Anti-dumping duties, which can run as high as $4.71 a kilo, would serve to level the playing field for U.S. producers, bringing the price of imported garlic in line with U.S. wholesale prices.
Harmoni maintains its zero duty rate through a loophole in Commerce Department regulations, which allows an "interested domestic party" of "like product" to ask for an administrative review and then to withdraw its request for that review. This is where the loophole comes in.
Every year for the past 10 years, the California-based Fresh Garlic Producers Association, of which Christopher Ranch is the largest player, has first requested administrative reviews of a number of Chinese garlic importers, and then, just at the deadline, withdrawn Harmoni Spice from the process. The result is that Harmoni's zero rate gets rubberstamped without review. Until now, no other growers have contested the situation, presumably for fear of tangling with the garlic Goliaths.
Ted Hume, a trade attorney with 40 years' experience, moved to Taos with his artist wife last summer, after staying in the B&B on our garlic farm. On my behalf (and later with Boxcar Farm), he filed a request for administrative review.
We expected some pushback, but Harmoni's lawyers have buried us in some 2,000 pages of filings with the Department of Commerce. They also filed what is patently a SLAPP suit – a Strategic Lawsuit Against Public Participation – against a total of 21 defendants, including us. Recently, both Avrum and I were visited by a private investigator, who claimed he wanted to grow garlic in Texas. We didn’t believe him.
The lawsuit and Harmoni's filing with the Department of Commerce are attempts to get us to withdraw our review request and thereby enable Harmoni to retain its zero anti-dumping duty rate. We think Harmoni is attempting to interfere with our constitutional right to petition the government for redress of grievances. And we realize that this may be a long, drawn-out battle, but we’re hoping it will end in a level playing field for U.S. garlic growers.
Perhaps a larger issue is that that other U.S. producers have gamed the import duty system in a similar way, allowing them to profit from the funneling of cheap Chinese goods, both agricultural and manufactured. The Department of Commerce, in short, may be allowing millions if not billions of dollars to slip through taxpayers' fingers, destroying countless jobs in the process.
As trade attorney Bill Perry told the Los Angeles Business Journal, "The whole system certainly smells to high heaven."
International trade law is an arcane subject, seemingly remote from everyday life. But every time you stop into a Wal-Mart or Family Dollar, you're already knee-deep in it. And it is certainly true whenever you buy supermarket garlic. Think before you shop. Garlic should add flavor to life, not be part of a system that “smells to high heaven.”
Thumbnail image courtesy of Flickr user ilovebutter.
Note: the opinions expressed in this column are those of the writer and do not necessarily reflect those of High Country News, its board or staff. If you'd like to share an opinion piece of your own, please write Betsy Marston at email@example.com.