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ASSOCIATED PRESS
November 20, 2008
Associated Press Writer
Chile industry officials are turning up
the heat on state government to help secure the future of New Mexico's
signature crop.
The New Mexico Chile Association is
proposing that farmers receive a $200 tax incentive for each registered
acre of chile they grow. The proposal was outlined during a legislative
committee meeting last week.
"Farmers are having a difficult time
financially penciling in the ability to grow chile peppers, mainly due
to the high cost of labor and labor inputs," said Dino Cervantes,
association treasurer and general manager of chile processor Cervantes
Enterprises, Inc.
New Mexico's chile industry is
struggling to stay alive due to a lack of workers, high labor costs,
foreign imports and increased farming operation costs.
"They just do not have the work force to
harvest the chile crop. There have been points where there is chile that
they can't harvest and they have to plow the fields under," said Charlie
Marquez, a lobbyist for the chile association. "The rate at which we are
losing chile farmers is incredible. There is not enough supply in New
Mexico to meet the demand."
Harvested acreage dropped from 37,000
acres in 1993 to around 11,000 in 2007, and Cervantes said about 60
percent of the total crop cost goes to hand labor.
The proposed incentive - a tax credit
taken against personal income tax obligations - was presented to the
Legislature's interim Economic and Rural Development Committee. It would
take effect next summer and end in 2011 and cost the state an estimated
$2 million annually during its duration, Marquez said.
The tax credit would help farmers as
they move from traditional hand labor to mechanized harvesting. Though
80 percent of the state's red chile crop is currently machine harvested,
green chile is harvested by hand.
Researchers at New Mexico State
University and the farming industry are developing machines and
machine-friendly chile varieties to mechanize the green chile harvest in
an effort to reduce hand labor and help farmers turn a profit.
Cervantes said the tax incentive would
help keep chile growers from switching to other profitable, mechanized
crops such as alfalfa and corn.
Despite the state's rough economic
outlook, Marquez said he believes the tax request is modest, citing its
short timeline. He said this marks the first time the association has
asked the Legislature for tax credit specifically for chile farmers.
Cervantes said losses in the chile
industry could affect income to the state. Over the last three years,
the value of the industry dropped from $400 million to $235 million, he
said.
"If we don't do something soon, if we
lose another 20 percent of the industry, that would equate to about
another $50 million in lost income to the state," he said. Processors
also need a reason to stay. "If they decide to move, the likelihood of
them coming back is an unrealistic proposal."
Cervantes said the goal is to move to
full machine harvesting and bring the state's chile industry back to its
heyday.
"The idea is to create a bridge to get
over this one last hump," Cervantes said.
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