In the United States corn is king in Iowa. Texas produces the most cotton. Florida is known for its citrus groves and Kansas rules in wheat production. The potato is tops in Idaho and Arkansas is known for its rice.

But in the Land of Enchantment—New Mexico—the most common question asked in restaurants, supermarkets and wholesale packing houses is “do you want green or red?” –referring to the state’s most fabled crop, the chile pepper.

Growing and consuming vast amounts of chile in New Mexico is more than just tradition; it represents the heart of agricultural production. But New Mexico’s most famous crop arguably has been under assault in recent years and a steady decline in chile production has painted the industry into the proverbial corner.

“New Mexico remains the top producing chile pepper state in spite of declining chile acres in recent years. And though more acres were planted in 2011 than in recent years, the industry remains depressed largely because of foreign imports,” says Jaye Hawkins, executive director of the New Mexico Chile Association.

The decline in New Mexico’s chile production has been dramatic since the early 1990s when over 35,000 acres of chiles were planted. By 2010 chile acreage had fallen to just over 8,500 acres, and in spite of 10,000 planted acres of chile last year, industry officials say problems from foreign imports continue to mount.

“Chile consumption is up in the United States but imports of both red and green chile peppers are depressing domestic production,” Hawkins said.

 In fact, the decline in chile acres can be traced back to the early days of the North American Free Trade Agreement, or NAFTA. While mechanized harvesting is possible for the state’s red chile crop, green chile is still largely harvested and de-stemmed by hand.

“For the longest time we had a problem finding immigrant farm workers willing to work in the fields. Before the recession, construction jobs were abundant and immigrant workers could make more money moving from farms to cities. That problem is not as bad now as it once was, but we are still competing with chile grown and harvested in Mexico, China and Peru where labor costs are much lower,” Hawkins adds.