A model of the Florida tomato industry is formulated under the hypothesis that growers make production decisions as rational economic agents. This assumption implies that anticipated Mexican tomato imports as well as other economic variables are taken into account when the planting decision is made. Maximum likelihood estimation methods are used to solve the simultaneous equations model, and the implications of the model's reduced form are analyzed. The empirical findings are consistent with the rational expectations hypothesis that producers respond to market information in its entirety when making acreage decisions.
Farm workers are shown to respond strongly to economic incentives to seasonally migrate for work. The economic model is specified with separate earnings structures for migratory and nonmigratory work, and a reservation wage for migration is specified to reflect the choice between migratory and nonmigratory work. The empirical model adjusts for self-selectivity in the sample and demonstrates that domestic farm workers sort themselves into migratory and nonmigratory workers in a manner consistent with the theory of comparative advantage. Implications for immigration and government employment and training programs are considered.
Entrepreneurs innovate their individual business organizations not only to deal with production and price risks, but also to cope with the risk of sanctions or penalties imposed by society's laws and regulations. More specifically, labor-intensive agricultural firms, faced with potentially large fines for violation of immigration and labor laws, increasingly modify the organization of their firms by shifting the management of routine seasonal labor jobs to independent farm labor contractors. The use of labor contracting is further intensified because of the effectiveness of labor contractors in the recruitment of illegal aliens.
U.S. growers filed an antidumping case against Canadian growers of greenhouse-grown tomatoes, alleging that U.S. growers were being injured, or threatened with material injury, by imports from Canada. The U.S. Department of Commerce determined that imports of greenhouse-grown tomatoes were being sold in U.S. markets at less than fair market value. The U.S. International Trade Commission determined the “like product” to be all fresh market tomatoes, concluding the domestic industry was not materially injured. Anecdotal evidence used by the Commission Department in determining like product ignores the wealth of knowledge that economics can add. An economic model is proposed for purposes of determining like product.
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