Sunday, March 11, 2007

No Pistachio Commission

CDFA referendum failed to receive enough votesCecilia ParsonsCapital Press Staff WriterWhen California's pistachio growers meet March 14-16 for their annual conference, for the first time in 26 years they will not have the California Pistachio Commission to conduct marketing and research programs. A referendum conducted in February by the California Department of Food and Agriculture failed to receive enough votes to continue the commission for another two years. The 444 ballots in favor only represented 41 percent of the industry volume, according to Steve Lyle of CDFA. The commission needed 51 percent support to continue operations. Paramount Farms filed a lawsuit in 2006, challenging the commission's mandatory assessments on all growers to pay for generic pistachio advertising and research programs. Paramount Farms is the state's major grower of pistachio nuts, with about 25-30 percent of the total crop grown on about 15,000 acres in the southern San Joaquin Valley.Paramount challenged the effectiveness of the commission and in a statement said it was critical for the industry to move beyond the commodity mindset and stimulate consumer demand for pistachios.The commission, which is funded with grower assessments, had an annual operating budget of $7.5 million to $8 million according to commission president Karen Reinecke. Growers are assessed 3.25 cents per pound of production. Since 1981 growers have voted every five years to continue operations of the commission with the last referendum showing 96 percent in favor. This referendum offered only a two-year extension, one of several structural changes aimed at securing growers' approval.Commission board member Chuck Nichols of Hanford said he thinks it is fortunate the annual meeting is coming so soon after the voting."I think there will be a lot of discussion there as to what we can do, what we can agree on and what it makes sense to do together. The slate is clean, we can look at options and I hope Paramount will be receptive," Nichols said.The commission added some structural changes in operations in late 2006 in hopes of smoothing things out with Paramount. The commission board approved a modification that would require a two-thirds vote by directors to approve advertising and promotion programs. The board also approved a seat for Paramount on the government affairs committee and expanded its duties to include international trade issues. In addition, the committee would have authority to consult when there were differences in analysis between the commission and individual growers.Reinecke said this week the litigation was consuming so much of the commission's resources they were losing sight of the purpose of the commission. "This is a very difficult situation for a lot of growers," said Reinecke, who has served as commission's president for the past 17 years. Nichols, who has been vice chairman of the commission's board for the past two years, said he voted to fold the commission."In the last year and a half since the lawsuit, nothing has been done to promote pistachios," he said. "We didn't see any settlement and it was costing millions." Nichols added that the divisiveness was hurting the industry and dissolving the commission would be one way of moving forward."The commission did a phenomenal job for the industry, but times change," he said.The past three years have been extremely profitable for pistachio growers, Nichols noted. This year's crop is expected to set volume records. There are presently 112,000 bearing acres of pistachios in California and other 40,000 acres coming into production. Nichols said new plantings are expected to continue as more growers take out annual crops and plant pistachios. Commission chairman Kevin Herman of Madera said there have been discussions among growers about forming some type of voluntary organization for growers."I'm hopeful that the conference next week will be a good venue for creation of some type of those groups, but am not totally optimistic. Something voluntary won't be the same," Herman said. He also said it was unfortunate that growers are losing their generic promotion tool just as pistachio inventories are beginning to grow.Reinecke said over the next five months the commission will wind down operations."The theme for this year's meeting is 'The Road Ahead' and that is appropriate since the industry will have to focus on what is ahead of them," she said.Cecilia Parsons is based in Ducor. Her e-mail address is

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