Fueled by the changing American diet and a growing influence of a diverse immigrant population, the demand for chile peppers over the past three decades has substantially increased and become very diverse. As demand increased, the United States production increased in response from 1980 to 1992, but then decreased. U.S. chile pepper production increased by 116% from 1980 to 1992 but then dropped by more than 50% from 1992 to 2007. The changes that occurred in aggregate U.S. production and also import patterns coincide with the implementation of the North American Free Trade Agreement (NAFTA). The implementation of NAFTA also affected the competitive advantages and disadvantages of individual chile peppers producing states. The primary objective of this paper is to illustrate the dichotomy between the increase in demand for chile peppers and the simultaneous decrease in the domestic production. Recent trends (1980-2009) in the production and imports of chile pepper were analyzed for both the fresh and the processed market. The geographic shifts in the domestic production were evaluated considering the impact of trade policies. A dummy variable model was developed to determine the significance of the impact of NAFTA on production and import trends as well as its role in the redefinition of the competitive advantages and disadvantages among major producing states. Results showed that mean U.S. chile pepper production after 1994 was statistically significantly lower than the mean production before 1994 by approximately 70.3 million kg. Similarly, the average import of chile peppers after 1994 was almost twice the average import prior to that date.
Online ISSN: 1459-0263Year: 2013, Vol. 11, Issue 1, pages 361-367. Publisher: WFL.
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