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California peach and nectarine marketing orders go down; plum board pared to a minimum

by Rand Green | April 11, 2011

REEDLEY, CA -- Federal marketing orders for California peaches and nectarines, which have been administered by the California Tree Fruit Agreement, have been terminated following referenda that failed to garner sufficient votes for continuation. The peach marketing order had been in place since 1939 and the nectarine order since 1958.

Following the March 25 announcement of the referenda results by the U.S. Department of Agriculture, the members of the California Plum Marketing Board met April 8 at the CTFA offices here to determine whether to continue to operate a plum program without having peaches and nectarines to split expenses, or to go dormant. The next plum board referendum is still three years away.

After considerable discussion and negotiation, the board voted to continue the program through fall but at a much reduced level, keeping only two programs: research and export market development. After the current season, the board will take another look at whether to continue the program for another year.

Eleven of the 13 members of the plum board were present at the meeting. A quorum of nine members is required to conduct business, and a supermajority of nine votes is necessary to approve all funding, meaning that nine votes were required to fund a continuation of the program.

CTFA President Gary Van Sickle told the board that as it would take eight or 10 months to wrap up the business of the peach and nectarine programs and close the CTFA offices, and the offices would operate with a minimal staff during that winding-down phase, the plum board could continue to slit some expenses with peaches and nectarines during that period if they chose to do so. He presented a proposal that included continuation of about 10 different plum programs, which he said could be funded for an assessment of about 4.75 cents per carton, about two-thirds of what the programs would have cost without the expense sharing. He said that the board could choose, cafeteria-style, to keep or eliminate any of the programs it wished.

In the end, the decision was made to keep the international market development program, which would enable CTFA to leverage about $85,000 from the board with an estimated $500,000 of already approved Market Access Program funding from the USDA's Agricultural Marketing Service. (The total amount of MAP funding this year for peaches, plums and nectarines combined would have been about $2.2 million.)

The board also voted to continue the production and post-harvest research program but funding just five research projects compared to the 15 projects that CTFA would have funded if the peach and nectarine orders had continued.

Mr. Van Sickle said that those two programs could be kept in place with an assessment of two cents a box which, with an estimated volume of about 10 million boxes of plums this year, would bring total revenues from assessments to around $200,000.

Initially, three of the 11 board members present held out, saying they did not feel that continuation of the mandatory plum assessment was justifiable at any level, but eventually one of the three was persuaded to accept the retention of just two programs and a two-cent assessment, giving eight of the nine votes needed. At that point the chairman, Mark Bybee, cast the deciding vote in favor of continuance.

One of the main arguments for continuing the program at some level was the hope that between now and fall, the state's peach and nectarine growers might come together on some kind of a voluntary program and contract with CTFA to administer it. There has been some informal discussion of that possibility among growers, several board members present said. There was also some talk of going to a voluntary program for plums. Keeping the plum board operating through fall would keep more options open, advocates argued.

The defeat of the peach and nectarine orders in the referendum, which took place from Jan. 12 through Feb. 2, was a surprise to many growers. Following the defeat in an October 2010 referendum of a state marketing order for peaches and nectarines which formed the California Tree Fruit Marketing Board, also administered by CTFA, the organization made a significant reduction in staff and programs, announced late December, with a view to securing industry support for the federal marketing orders for peaches and nectarines in the upcoming referenda. Staff and budget were slashed by 40-50 percent.

Continuation of the federal marketing orders required "at least two-thirds of the growers voting in the referenda or growers representing at least two-thirds of the volume of nectarines and peaches represented in the referenda" to vote in favor the marketing orders, according to a Dec. 13 press release from USDA/AMS. The voting in the referenda was close but not quite sufficient for continuance. Sufficient growers favored the marketing orders, but they fell short of representing the necessary two-thirds of the volume, according to the March 25 announcement from AMS.

Among the activities that will not be part of the plum board's program this year are inspections (which were already voluntary), detailed estimates of the crop by variety and date, daily packout reports and end-of-season statistical data reports.

Most domestic marketing programs had already been curtailed as part of earlier downsizing.