A Virginia Tech study requested by the United States Department of Agriculture (USDA) has presented a strong case for the import of Argentine lemons, provided phytosanitary requirements are met and seasons are well synchronized.

The study titled 'Economic Impact of Potential U.S. Regulatory Decisions Concerning Imports of Argentine Lemons' written by Caesar Cororaton, David Orden and Everett Peterson, was submitted to the USDA's Animal and Plant Health Inspection Service (APHIS).

The report concluded the benefit to consumers from lower lemon prices and higher consumption would be greater than the loss of sales for local producers, looking at three different scenarios involving various degrees of seasonal and regional restrictions.

"The entry of Argentine lemons in all three scenarios decreases the price of lemons in the U.S. and increases lemon consumption. This increases consumer welfare," the report said.

"However, the entry displaces lemon production in the U.S. and lemon imports from Mexico, Chile, Spain and others. The reduction in demand for lemons from these sources decreases their supply to the U.S. market and increases their exports to the rest of the world.

"The producer prices of these lemons fall and both aggregate lemon production in the U.S. and total lemon exports of these suppliers decline. The reduction in the producer price and the output of U.S. produced lemons generate losses in producer surplus. The consumer welfare gain exceeds the producer surplus loss in all three scenarios."

The researchers emphasized increased benefits to consumers in non-citrus regions in the U.S. who would have year round access to the fruit as a result, while consumers in citrus-growing regions would also receive indirect benefits.

But the report said the degree of success would depend on how much responsiveness there was in transition between seasons in ensuring consistent supply.

"The effects will depend on how easily lemon suppliers are able to shift supply between seasons. If the elasticity of transformation between seasons is low, the displacement effects of Argentine lemons on the aggregate supply will dominate compared to the substitution effects.

"In this case, lemon prices increase and demand falls in both regions in the season when Argentine lemons are prohibited."

The paper noted concerns over the effects of fruit flies and Citrus Variegated Chlorosis (CVC), but pointed to ongoing negotiations between the two countries to develop a systems approach and several non-tariff barriers to minimize pest risks.

Argentina received conditional and limited approval to ship lemons to the U.S. in 2000 but this only lasted for a brief period, due to a lawsuit against the USDA launched by four Californian citrus growers and the U.S. Citrus Science Council.

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Photo: www.fedecitrus.org

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