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Conflict Surrounds Iran Pistachios

March 17, 2000

FRESNO, Calif. (AP) _ California farmers are worried the Clinton administration’s decision to lift a 14-year ban on Iranian pistachio imports will leave U.S. markets vulnerable to attack by a heavily subsidized foreign industry and end up cutting into their bottom line.

California growers, who account for about 35 percent of the world’s pistachio production, say the administration’s move to ease trade restrictions on Iranian luxury goods, including pistachios, could dramatically reduce prices for the American product.

``This is another example of the Clinton administration sacrificing domestic industries that they see as non-significant in the name of publicity for themselves or their foreign relations program,″ said Chuck Nichols, a Hanford pistachio farmer.

Hamid Reza Asefi, the Iranian Foreign Ministry spokesman was quoted on Iranian television: ``Iran thinks it is positive and welcomes it. And within the framework of Iranian laws, the United States can export grain and medicine to Iran.″

He did not say whether Iran would begin exporting carpets, caviar, fruits and nuts to the United States _ items Secretary of State Madeleine Albright says are now permitted.

It’s unclear how much enthusiasm Iranian growers will have for American markets because huge tariffs imposed on the pistachios in 1986 weren’t lifted with the import ban.

There is a 283 percent combined duty on the raw nuts and a 318 percent charge on the roasted nuts, said California Pistachio Commission President Karen Reinecke.

``What happens when Iran gets the news today and they’re all excited and want to ship to the U.S., but they won’t be able to? It’s kind of an empty promise from the U.S.,″ she said.

The tariffs, the highest ever imposed for an agricultural product, were the result of huge government subsidies granted to Iranian farmers and the tendency of Iranian exporters to dump pistachios on the U.S. market below market price.

Reinecke said eventually the United States will review Iranian trade practices and may reduce or eliminate the tariffs.

But, until they are sure that growers aren’t being subsidized by the Iranian government and won’t undersell U.S. growers, the tariffs should remain in place, she said.

The 14-year absence of Iranian competition has been an unparalleled boon to California farmers, who grow almost all the pistachios produced and sold in the United States.

In 1986, the year before the ban was imposed, the California crop was valued at $76.4 million and was grown on 34,243 bearing acres. Last year, 71,000 acres produced $160 million.

Iran farmers, however, still account for 50 percent of the world supply, and American farmers predict a fierce battle for domestic markets if the import duties are lowered or eliminated.

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