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Pistachios, a source of tension between Iran and United States

Pistachio producers from Iran and the United States are on a war footing.

Two of the largest producers of pistachios in the world, Iran and the United States (specifically, California), are engaged in a dispute that won't be solved soon. 

Both claim that their product is of superior quality. However, this conflict doesn't really revolve around the products' flavor, as much as on other factors. What's really going on?

Financial sanctions
Iran and the United States have had a stormy relationship for decades. One of the battlefields for this rivalry is the trade in pistachios.

In 1979, during the American hostage crisis, the US imposed a total veto on Iranian pistachios, which currently have to pay a 241% tariff to enter the U.S. This tax, which has been in place since the 1980s, aims to protect American producers from the subsidies given by the Iranian Government to their own farmers.

However, according to Iran, this tariff has only served to increase the price of their product in the United States and it is time to get rid of it altogether.

The US federal authorities, which must make a decision about this tariff within a few weeks, have the last say on this matter.

A decades-long conflict
California's Pistachio Commission and other individual producers filed a complaint on the grounds that the Iranians were flooding the US market with their pistachios in 1985. 

At that time, Iranian raw pistachios accounted for 42% of the U.S. market.

According to data from the Trade Commission, there is no doubt that the pistachio industry in the United States, specifically in California, has flourished since the tariff was imposed:

* In 1985, there were 19,000 hectares of land dedicated to the cultivation of pistachio.
* The US banned Iranian pistachio imports between 1987 and 2000.
* Imports were then allowed for a few months, before a new embargo was imposed in September 2000.
* By 2015, with the ban still in place, California alone had more than 94,000 hectares of pistachio crops.
* During the 2014-2015 season, the U.S. produced more than 230,000 tons of pistachios.
* The Government of Barack Obama lifted the restrictions in 2016 but pistachios still have to pay a 241% tariff.

Tensions in the Commission
The positions of Iranians and Californian producers regarding the withdrawal of the tariff are very distant.

Americans fear Iran will take advantage of a possible opening of the market.

"The economic viability of the industry is at risk", stated Richard Matoian, the executive director of the Association of U.S. Pistachio Producers.

"It is undeniable that the entrance of a cheaper product into the market, even if it's of inferior quality and comes from another country, will decrease our producers' income."

Meanwhile, businessman Hossein Denis Ketabi, who testified before the Trade Committee, said Iran's fragmented pistachio industry would have a slight impact on the U.S.

"Competition is healthy, it is a good thing," said Ketabi, Chairman of the Board of the Commercial Arman Pegah Company.

"We are not in 1985."

Democrats and Republicans agree
The pistachio dispute has managed to make California's Democrat and Republican politicians agree on something.

"Without taxes, we wouldn't have a vibrant domestic pistachio industry to supply the US market. American consumers would be flooded with low-grade pistachios produced in Iran," stated Democratic Congressman, Jim Costa.

"The pistachio industry offers my constituents well-paying stable jobs", said Republican Congressman, David Valadao, before the Commission.

"The significant investment made to cultivate pistachios and in their processing facilities has had a positive impact on the communities in my district," he added.

Iranian counterattack
The Iranian authorities are not intimidated by the comments about the supposed superiority of the U.S. pistachio.

"The global pistachio market is valued at more than US $2 billion and our exports last year totaled US $1.2 billion (March 2015-2016)," said Mojtaba Khosrotaj, the deputy minister of Industry, Mining and Trade.

Khosrotaj is the head of the Iranian Trade Promotion Organization and knows that their main rival is California. According to him, the Iranian pistachio is of superior quality.

"When you separate the seeds from the shells, a kilo of Iranian pistachio has more product than the American pistachio. The Iranian product also has more oil, and can therefore, be better processed," he said.

Californian producers do not share this analysis and continue criticizing their Iranian counterparts.

Bob Klein, the director of the Administrative Committee for pistachios based in Fresno, said the Iranian pistachios were more likely to have high levels of aflatoxin, a toxin produced by certain fungi.

"This is a global market," said Brian Blackwell, a farmer. "If Iran exports 450 tons of pistachios to the United States, it means that there are 450 tons that were not sold in China or Europe."

The five members of the International Trade Commission have until late June to announce if they will maintain the tariff or if they may ease conditions for the entry of Iranian pistachio.

It's hard to tell if this decision will be taken for economic reasons or for political differences, given the current tensions between the governments of Iran and the United States


Source: BBC Mundo


Publication date: 5/31/2017


 


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