How ’bout them apples?

HARVARD, Mass. — It was a spectacular fall afternoon here in the heart of New England’s apple country.

Frank Carlson strolled the orchards of his family farm earlier this month and picked a red McIntosh and polished it against his green flannel shirt.

The oak and maples trees in the hills that surrounded us were brush-stroked with orange and red foliage that seemed to burn against a perfect blue sky.

Not a cloud in sight, but for Carlson, who owns Carlson Orchards, which is the largest producer of apple cider in New England, there were storm clouds on the distant horizon.

“They’re killing us,” said Carlson, biting into the apple and between chomps talking about the threat posed to the American apple growers by China’s aggressive campaign to dominate the global apple market.

“They are absolutely killing us,” he added.

In the global trade of apples, China has surged to become the leading producer of apples in the world with the U.S. now dropping to a distant second place.

China’s cheaper labor costs, its planned economy that allows the government to bulldoze huge tracts of land to build mega orchards and a growing international desire for fruits to be available year round in every corner of the world have all conspired against New England family apple orchards like the Carlsons.

Just after we moved into this area, I met Frank and over the years I have been impressed by his grasp of the history of the apple in America and how it came to dominate export markets in Europe and elsewhere. That is, until  China began to aggressively overtake the global market. They began 20 years ago by cornering the market in apple juice concentrate and then more recently have surged ahead in the export of apples.

Carlson, whose family has been in the apple business for nearly 70 years, explained that in Europe during World War II many of the apple orchards were destroyed and so the U.S. apple growers developed a huge export market to Europe. Typically, the American growers would send the smaller apples that American consumers did not like and that fared well in shipping. In Europe, the small apples were a staple product.

But today, the New England growers are being boxed out of the European markets by China, which can offer larger apples at smaller prices.

The reason, says Carlson, is cheap labor. He says the Chinese pay their workers less than 50 cents an hour. Frank can’t find local workers with the patience and the expertise to pick seasonally. So he brings two dozen workers on legal work visas from Jamaica. They’ve been coming for more than 20 years and the men are a fixture in town. Carlson’s labor bill ends up at least 20 times what a Chinese orchard would pay. There is just no way he can compete with cheap labor in China and its industrial growing and economies of scale.

It’s not all bad news for Frank. He still owns a very healthy, successful business for pick-your-own apples and produces 750,000 gallons a year of a delicious cider that does very well in markets where “locally grown” is becoming a stronger and stronger market. He said the key to survival is to diversify the business.

But China’s shadow hangs over Carlson’s Orchards like a storm head. And Grist, the Seattle-based online news organization that focuses on environmental issues, did a nice job explaining why this relentless hunt for cheap labor is a “race to the bottom” in our economy and why we need to share Frank Carlson’s concerns.

In a piece that ran last August, Grist wrote: “In a well-functioning market, farmers would raise wages to draw in more workers, and pass the increased costs on to their buyers: the big supermarkets, restaurant chains and food processors. But as a California Farm Bureau official told AP, those entities will likely reject domestic price hikes and look to other parts of the world for produce. "If our guys try to raise prices, they are going to be replaced by foreign production," he said.

Indeed, the U.S. is already outsourcing an increasing share of its fruit production. USDA figures show that fruit imports (excluding bananas) as a percentage of consumption have also doubled, rising from 12 percent in 1992-1994 to 24 percent in 2002-2004. And by all accounts, this shift is staying on pace.

And what happens when farmers can no longer work their land profitably? They generally sell it to real estate developers. Take for example Woodmont Orchards in Londonderry, N.H., which just sold 250 acres off and has planned to shut down its apple business, laying off 80 harvest workers this year at what was once New Hampshire’s largest apple grower. Or take a look at California’s lush Central Valley where hundreds of thousands of acres of farm land have been bull-dozed for apartments and strip malls.

And of course the shift in production of fruits to places like China bring weaker regulatory regimes, which means more insecticides and other agricultural chemicals used on the food we eat.

There are a lot of reasons to heed the warnings that Frank Carlson shares even if he shares them on a beautiful autumn day in the heart of New England without a single cloud in the sky.