This Thursday, lawyers specialised in international trade and US law will speak to producers and exporters in the area of Ovalle, who have been affected by the historically low prices paid in the United States as a result of oversupply. They will "explain how to assert their rights in case they are subject to abuses for eventual bad liquidations for their grapes," pointed out Sebastián Norris, of Araya & Cía.
The activity has been organised by the Agricultural Society of the North and the Agricultural Committee of Monte Patria, made up of authorities, producer associations and growers in the area affected by the crisis. "At the moment, it is essential for us growers to inform ourselves and have in-depth knowledge about the legislation that governs the sale of fresh produce abroad, as it can help in the negotiation to obtain better and fairer prices," stated the president of the SAN, Director of Fedefruta and SNA, María Inés Figari.
As a way to address the uncertainty that exists amongst producers and exporters due to the very low prices of Chilean grapes in the United States this season, which will have a serious impact on the economy of the Region of Coquimbo and the province of Limarí, the Agricultural Society of the North (SAN) held a meeting with lawyers of Araya & Cía, experts in agricultural law and international trade, in order to illustrate to producers what their various alternatives are when it comes to legal protection in the international market.
This follows the setting up, on 9 March, of the Agricultural Committee of Monte Patria, which the authorities, producer associations and growers in the area are using to report the serious situation that the sector is facing due to the low prices obtained after the export of table grapes. This is a result of the excess supply of local and imported fruit in the United States, which has put the condition and value of the grapes shipped to this important market at risk; a situation which makes it essential to enforce support and mitigation measures, given the difficult economic and social situation generated by such unfavourable circumstances.
It should be recalled that, according to producers, the best prices obtained in the province of Limarí do not exceed 14 dollars per box for the Flame and Thompson varieties, which entails a loss of $ 6 per box after taking into account additional production and logistics costs.
In this sense, María Inés Figari, president of the Agricultural Association of the North, director of SNA and Fedefruta, stressed that this meeting with Araya & Cía arrives "at a very suitable time, since we have yet to receive the payments for our product, but we know that the situation is difficult."
For this reason, Sebastián Norris, head of the International Trade area of Araya & Cía, will arrive in Ovalle accompanied by William R. Schubert, a lawyer expert in US law, to "explain to producer associations, authorities and growers shipping their fruit to international markets how to assert their rights in case they are subject to abuses for eventual bad liquidations for their grapes," pointed out the lawyer.
In this regard, Norris added that there are safeguards that can be adopted by reviewing the contracts, as well as possible reactions supported by US laws that protect producers and exporters shipping their fruit to North America, in case that the payments received stand far below the market price and can be considered abusive. This can be done even if there is no written contract with the receiver, since in the US, the regulations automatically apply in situations such as this, if it is indeed found that any fruit that arrived in optimal conditions to its destination received an unfair treatment."
Along the same lines, María Inés Figari insisted that "it is fundamental at the moment for producers to be informed about our rights and have in-depth knowledge about the legislation that regulates the sale of fresh produce abroad, as it can help in the negotiations to obtain better and fairer prices."
The impact
Last week, the Agricultural Committee of Monte Patria was received by the Intendance of the Region of Coquimbo. They gave a detailed explanation about the problem, which will increase the debt of agricultural companies, with the consequent lack of working capital for this year, as well as the unemployment of thousands of people who work in the sector.
Monte Patria Mayor Camilo Ossandón stated that "there are 3,730 hectares of table grapes affected in Monte Patria alone. Our region exported more than 7 million boxes of grapes to the United States with a price below their cost, which entails negative financial results. People who worked for a whole year to produce their crops are now facing increased debt, so we hope that the Intendant can help us next week to create instruments to generate jobs, keep the manpower and create a subsidy to help hundreds of growers with working capital and allow them to prepare for the next season."
Lastly, Araya & Cía's lawyer highlighted the efforts of the Agricultural Work Committee of Monte Patria to address the crisis and seek solutions for the area. "We understand the seriousness of the situation generated by the low prices paid by the United States for the grapes from Chile and the Region of Coquimbo, as the US is the main market of the sector," said Norris.
The talk, entitled "Laws in the United States that protect the fruit grower and exporter in the face of market fluctuations", will be held this Thursday 30 March at 3:00 pm in the Salarí Governor's Hall, located at Avenida Socos 154, Ovalle.
