Georgia Peach Study
I. Identification
1. The Issue
What makes a peach a Georgia Peach? The U.S. state of Georgia    is known for many fine products, but the most famous and possibly the most beloved    is the peach. However, the industry is threatened by peaches that can be produced    more cheaply elsewhere. It is simply not as profitable to grow peaches in Georgia    (or the rest of the U.S., for that matter) as it once was.
Will the U.S. peach industry be crushed by a strong dollar    that makes American products more expensive in foreign markets? Will foreign    markets be opened sufficiently by World Trade Organization (WTO) rulings for    American peaches to be competitive in foreign markets? Will innovative marketing,    efficient farming, and product diversity save the day? Or will high input costs    (the cost of water, fertilizer, labor, etc), restricted foreign markets, and    low commodity prices decimate rural industry in Georgia?
2. Description
Peaches originated in China. The peach    tree actually belongs to the same family as the rose, and early peaches were    small, tart, very fuzzy, and had more pit than fruit.
In Chinese folklore peaches are associated    with magical taoism, with luck and immortality. Peaches are still a traditional    birthday gift in China. Peach trees were grown near the doors of rural dwellings    and became nearly as popular as the plum. Traders along the Silk Road brought    versions of the primitive version of the peach to Arabian gardens. Gardeners    in Asia continued to refine the taste and appearance of the peach until there    were cling peach and loose stone peach varieties that grew to roughly    the size of a human fist. Peaches were popular in Europe but like their cousin    the rose, did not flourish in the cool, damp climates as well as they later    would in the New World.
The peach industry in Georgia really    took off during the reconstruction phase after the American Civil War, when    the emancipation of the slaves and other factors caused planters to seek to    diversify crops. The famed pecan, the vidalia    onion, and the humble    apple joined cotton as cash crops in Georgia. The idealism of Georgia's    founders (who at first wished to prohibit lawyers, slaves, Catholics, and liquor    from entering the colony) as well as the bounty of the land led natives to view    Georgia peach country as a kind of Eden. The view can still be witnessed on    crates of peaches with Bible verses printed on the side. The    peach became a cash crop in the 1870s because of a tiny insect called the boll    weevil, which decimated cotton crops, causing a dire need for agricultural diversification.
In the 1880s Elberta and Georgia Belle    were the first two varieties of peach to be developed in Georgia. The    countryside had been groomed for agricultural production long before the land    was re-distributed in 1940 for Franklin Roosevelt's New Deal Agriculture Adjustment    Administration. The program created subsidies for the sale of land designed    to increase the percent of the population that owned land in the Southern states.    The intended effect was to decrease the gap between the rich and poor but a    side-effect was the necessity of growing crops like the peach that would produce    a high yield in a small space.
Today Georgia grows over 40 varieties    of peach commercially. Although Georgia is called the Peach State it actually    ranks third in production behind California and South Carolina. Peaches are    grown south of Macon county, north into the upper Piedmont, from Jackson City    to Floyd. In 2001,    the Georgia peach crop reached 140 million pounds and brought in $35 million    dollars. (Courtesy University of Georgia.) Because    of infrastructure (such as trains, highways, packing plants, refrigerated trucks,    and atmospherically controlled warehouses) the U.S. exports peaches over the    greatest area of the world. China produces the largest amount of peaches according    to hectares of peach orchards but around 70% of China's fresh peaches are exported    to Japan. China currently has limited storage and packing facilities.
Peaches were among the many products    that were intended to help the South not to be so reliant upon cotton, and to    create a source of funds so that the South could be rebuilt after the Civil    War. Today there is a diagonal band of territory running through the heart of    Georgia where first cotton plantations and now orchards and diverse crops exist.    Train tracks and highways were created to serve the agricultural industry in    Georgia. Fresh agricultural goods could be easily transported from farms to    packing and storage facilities near Atlanta, and from there throughout the country.    Special padded containers and warehouses where the ratio of gases in the air    is controlled so that the enzymes that cause decay in the fruit are not activated    help U.S. farmers get a high percentage of fruit from the orchard to the market.    Georgia used capital gained from its agricultural industry to encourage investments    in technology and infrastructure. Now, the South is developed and flourishing    around Atlanta, Georgia. The demand for peaches has not decreased (if anything    it has increased) but the fruit is no longer as necessary to the Southern economy    as it once was.
Dole Food Company, Inc. is the world's largest producer and    marketer of fresh fruit. The company employs, on average, 33,000 full-time permanent    employees and 24,000 full-time seasonal or temporary employees worldwide. The    company is currently focusing on value-added products such as fruit bowls. Peaches    are not a major part of its business.
Each country in theWorld Trade Organization    (WTO) has agreed to specific levels of tariffs for fresh peaches or nectarines,    preserved peaches or nectarines in airtight containers, and other forms of prepared    peaches or nectarines. Certain countries, most notably Chile and Argentina,    have claimed that the U.S. has unfair tariffs on peaches. The WTO has has already    ruled that safeguard duties on peaches broke WTO rules. The WTO also quarentines    certain fruit because of pests that countries can put on a quarentine list.
3. Cases Similar    to the Georgia Peach Study:
These are cases that are similar to the Georgia Peach Study.
Trade Liberalization Related Studies (outside U.S.):
U.S. Food Industry Studies:
II. Legal Clusters
5. Discourse and Status: Disputes in progress.
Argentina lost a dispute at the World Trade Organization (WTO)    when a panel ruled that safeguard duties on imported peaches violated WTO rules,    namely the Safeguards Agreement and the General Agreement on Tariffs and Trade    (GATT). California peach growers have been fighting EU subsidies to Greece on    canned peaches since 1996 when prices for U.S. peaches increased sharply due    to a crop severely damaged by late frosts. The loss U.S. farmers suffered was    made worse by cheap imported peach products that allowed prices for peaches    to remain the same in spite of the shortage of U.S. peaches.
6. Forum and Scope: U.S., EU, Chile, Argentina, and multilateral organizations.
Since about 5% of a peach crop is consumed    fresh while the other 95% is preserved or processed in some way, countries that    have the ability to not only produce and transport but also to preserve the    most peaches are the ones that can sell the most peaches.
The amount of effort it takes to transport    and process peaches is quite astounding. In the U.S., refrigeration, atmospherically    controlled warehouses, special containers, and complex tracking systems are    used. Processing plants are located near train stations and highways in Georgia,    and near ports in South Carolina. China is the largest producer of peaches by    hectares, but must ship most of the crop to Japan to be processed. Greece, with    its tradition of enormous orchards (one Greek olive orchard is the largest orchard    in the world) and its equally enormous subsidies from the EU, is currently    the world's largest producer of canned peaches.
7. Decision Breadth: World Trade Organization
8. Legal Standing: Decisions pending.
12. Type of Measure: Tariffs, subsidies, and legal disputes.
13. Direct v. Indirect Impacts: Both.
14. Relation of Trade Measure to Environmental    Impact
a. Directly Related to Product: YES, directly related    to peach products.
b. Indirectly Related to Product: Yes, related to nectarines    and other fruit.
c. Not Related to Product: No.
d. Related to Process: Yes, related to the infrastructure    related to transportation and preservation of fruit.
15. Trade Product Identification: Georgia Peach.
16. Economic Data
The peach was added to Georgia's agricultural    repertoir to increase the diversity of crops after the boll weevil destroyed    much of the cotton crop in the 1890s and the Civil War destroyed much of the    Georgian railway. The New Deal Agricultural Adjustment created incentives for    large plantations to sell land, ensuring that wealth became more evenly distributed    in the state.
Georgia currently relies much more on    its technolgy sector than on its rural economy.
17. Impact of Trade Restriction:
Georgia is following the national trend of having more    service and manufacturing industries and increasingly less agriculture.
 
18. Industry Sector: Food
19. Exporters and Importers:
Chile and the U.S. are the main exporters    of peaches. Asia, especially Taiwan, is an increasingly large importer. Greece,    for instance, has millions in subsidies from the EU that allow it to be the    largest producer of canned peaches in the world.
20. Environmental Problem Type: Chemical-resistant strains of fungus and insects.
21. Name, Type, and Diversity    of Species
Name: Peach tree
Diversity: Over 40 varieties of peaches grown commercially    in Georgia.
22. Resource Impact and Effect:
23. Urgency and Lifetime:
24. Substitutes: Peaches    and nectarines from South America and Asia. Subject to limitations due to lack    of processing and storing facilities, especially for fresh fruit. According    to the U.S. Census Bureau the U.S. produces 25% of worldwide peach and nectarine    exports.
VI. Other Factors
25. Culture: Yes.
Long before the peach found its way to Georgia, it was    grown in China and became a symbol of longevity. It was grown by the doors of    houses to encourage good luck. A peach is still a traditional birthday gift,    called a shou t'ao. The gum of the peach tree was thought to encourage    long life and was favored by taoists as a possible ingredient in the elixir    of immortality.
The peach was commercially grown in Georgia after the    Civil War, as part of an effort to diversify crops.
26. Trans-Boundary Issues: Yes.
27. Rights:
28. Relevant Literature
The United States Department of Agriculture (USDA) and National    Agricultural Statistics Service (NASS) were consulted extensively for this    report as well as the U.S. Census Bureau.
USDA "The U.S. Peach and Nectarine Industry Situation"
GAIN Report #CH2027 USDA.
Cobb, James. Georgia Odessey. University of Georgia    Press: London 1997.
Coleman, Kenneth ed. A History of Georgia. University    of Georgia Press: Athens (Georgia), 1972.
Coulter, Merton. Georgia: A Short History. University    of North Carolina Press: Chapel Hill, 1947.
Scarborough, Ruth PH.D The Opposition to Slavery in    Georgia Prior to 1860. Negro University Press: New York, 1968.
Thacker, Christopher. The History of Gardens. University    of California Press: Berkeley, 1979.
"Congressman Sanford Bishop, Second Congressional District of Georgia" Accessed April 4, 2004. http://www.house.gov/bishop/MapofGeorgia.html
"Georgia Fruit and Vegetable Grower's Association" gfvga.org
University of Georgia College of Agriculture. http://www.caes.uga.edu/
Information on the Country of Georgia
Yes, the country of Georgia is just as interesting as the American state of    Georgia!
Unfortunately, this website is already quite extensive and entirely centered    on peaches. However, out of sympathy for all those people striving to write    about the country of Georgia, I will say a few words and include some links.
As far as I know the country of Georgia also has peaches. The Middle East has    a lot of cultures that enjoy creating gardens and Central Asian countries such    as Uzbekistan and Turkestan had great orchards before being governed by the    Soviet Union. In fact, the streets in certain cities were lined with fruit trees    to help feed the poor. For more information about this (and some rather good    reading on Central Asia) see The Lost Heart of Asia.
I also know that the Georgian mafia is reputed to be the most violent of the    mafias that plague Russia and parts of Europe (and increasingly the rest of    the world, if some of the literature is to be believed.) There are quite a few    good books about post-Soviet organized crime (none that I know of specifically    about Georgia) and I recommend Comrade Criminal by    Stephen Handelman. (London: Yale University Press, 1995.)
From TED: