Stock photo of a woman gathering red chile peppers (© John Lund-Marc Romanelli-Getty Images)
Lots of states have a signature cash crop: potatoes in Idaho, oranges in Florida, apples in Washington, peaches in Georgia, corn in Kansas. For New Mexico, it's world-class chile peppers -- cultivated there for centuries and spelled with an "e" to distinguish them from out-of-state chili peppers.

But increasingly stiff international competition has a lot of people in New Mexico -- where the official state question is "red or green?" -- getting their backs up to defend their 2,000 beloved varieties of scorching goodness.

In spite of the ongoing drought still gripping the Southwest, New Mexico had a relatively good chile crop last year, with an overall value of $65.4 million. The drought did increase reliance on drip irrigation, which along with the rising costs of fuel, fertilizer and other agricultural essentials, hiked the price of chile peppers by about 20% last year.

But only 9,600 acres of chiles were harvested in New Mexico in 2012, down from 34,500 acres in 1992. According to The New York Times, consumption of pepper products has more than doubled in the U.S. since the mid-1990s, but most of those products are imported. And that's why New Mexico's chile industry faces tough challenges from outside the state's borders.

The New Mexico Chile Association says imports from China, Mexico and other countries currently account for about 82% of all chiles consumed in the U.S. It also says China is trying to corner the world oleoresin (or essential oils) market, which currently includes 30% of the chiles grown in New Mexico.

So, the state is striking back, aggressively marketing New Mexico chiles while ensuring its brand is protected. The New Mexico Chile Commission collects funds from the industry to support those research, marketing and promotion efforts.

And the New Mexico Chile Advertising Act, which went into effect in June 2011, makes it unlawful for a person to "knowingly advertise, describe, label, or offer for sale a product as containing New Mexico chile, unless the chile peppers or chile peppers in the product were grown in New Mexico."

In addition, a state representative recently introduced a bill that would require chiles and chile products grown elsewhere to say on their labels that they're "not made in New Mexico."

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