A recent report from the University of California advises the California processing tomato industry to work toward negotiating reduced trade tariffs and subsidies for European Union tomato producers. The report, published in the Fall 2007 issue of California Agriculture magazine, said reducing trade barriers such as import tariffs and subsidies for EU producers would be a significant boon to California processing tomato growers.
Reducing tariffs by 50 percent would raise the market price for California tomatoes by about 6 percent, and improve net returns to California processing tomato growers by $34 million a year. Additionally, a 50-percent reduction in subsidies to EU growers would improve net returns to California growers and processors by $8.5 million annually.
California and the European Union each supply about one-third of the world’s processing tomatoes. According to the UC study authors, ag economists Bradley Rickard and Daniel Sumner, many countries apply import barriers for processing tomatoes, but the European Union is the main producer that uses export and production subsidies.