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F I S C A L I M P A C T R E P O R T

SPONSOR Gutierrez

ORIGINAL DATE

LAST UPDATED

2-6-2007

HB 834

SHORT TITLE New Mexico Chile Documentary

SB

ANALYST Dearing

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$300.0 Nonrecurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Cultural Affairs Department (CAD)

SUMMARY

Synopsis of Bill

House Bill 834 appropriates $300 thousand from the general fund to department of Cultural

Affairs to contract for the preparation of a documentary film on New Mexico chile.

FISCAL IMPLICATIONS

The appropriation of $300 thousand contained in this House Bill 834 is a nonrecurring expense

to the General Fund. Any unexpended or unencumbered balance remaining at the end of FY08

shall revert to the General Fund.

SIGNIFICANT ISSUES

Chile peppers have been cultivated in New Mexico’s Rio Grande Valley for more than four

hundred years. Considered the state’s signature crop, chile is the foundation for a healthy and

complex industry that includes commodity and value-added products. In 2000, the crop ranked

fifth in the state for cash receipts from agricultural commodities. The chile pepper industry

contributes to New Mexico’s economy and employs many workers engaged in manual farm

labor, processing, marketing and other related areas.

House Bill 834 – Page

2

Overall, the growth and production of chile in Dona Ana, Luna and Hidalgo counties was

estimated to have generated approximately $400 million in economic activity annually. Crop

values are on the range of $60-100 million annually, depending on production levels and cash

price. Production of the crop however, multiplies the economic impact by a factor of four. In

total, the chile industry provides 10,000-15,000 seasonal harvesting jobs, and over 5300

permanent jobs, in addition to indirect economic impact. Chile production is both vital

economically as well as culturally in New Mexico. The State produces two-thirds of the chile

consumed in the United States.

1

Through increased global competition, the New Mexican chile industry is facing competitors

producing in areas which have substantially reduced labor economics and essentially non-

existent environmental regulation. Similarly, chile is an integral component in reducing

agricultural risks through its role in crop rotation strategies. Tourism and niche (southwestern)

product markets are in some part based on cultural links to chile, its production and

consumption.

In partnership with NMSU, the South central council of governments is administering a

$333,355 Economic Development administration grant with the goal of increasing the chile

growing and processing industry’s global reach. The project is researching methods to

mechanize the harvesting and storage processes, studying the implications of mechanization for

retraining workers for new processing jobs and creating new marketing and branding strategies

for the State’s pepper industry.

The appropriation in House Bill 834 to produce this documentary film could allow the marketing

of this New Mexico product to a wider audience.

If this legislation is enacted Cultural Affairs would work closely with New Mexico State

University and the Chile Pepper Institute, the Economic Development Department and Film

Office, as well as the Tourism Department in the documentary’s preparation.

ADMINISTRATIVE IMPLICATIONS

The appropriation of $300 in House Bill 834 would be administered by the Cultural Affairs

department.

TECHNICAL ISSUES

The agency response does not specify the level (if any) of involvement and collaboration of the

Cultural Affairs department with the either Tourism or Economic development departments in

conjunction with this legislation.

PD/nt

1

NMDA and The Chile Pepper Institute @ NMSU. The Census Bureau utilizes the North American Industry Classification system, a system of

code numbers to identify economic activity in particular industries and agricultural crops. These identifier codes are lacking for the processing

and production of the chile crop. The USDA State Agricultural Overview fact sheets for NM does not even mention this crop.

http://spectre.nmsu.edu/dept/welcome.html.t=chile

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