Apple rate increase goes to a vote
Washington State growers vote on raising the assessment cap.
The decision to increase Washington Apple Commission assessments by up to a penny per 40-pound box is now before the state's apple growers. Ballots, mailed at the end of November by the Washington State Department of Agri--culture, must be postmarked by December 17 to be counted.
Hearings held by the department at the end of October in Yakima and Wenatchee revealed little formal opposition to the commission's request for a flexible rate increase that would add up to one cent to the current 3.5 cents per 40-pound box of apples. The department received one letter opposing the increase, while several industry members testified in support of the flexible rate.
The increase would generate up to an additional $1 million on a 100-million-box apple crop.
The referendum must be approved by at least two-thirds of the producers voting, and those voting must --represent two-thirds of the acreage of voting growers. If approved, the proposal would be adopted by the WSDA director of agriculture in mid-January, and become --effective in mid-February.
Once effective, the Apple Commission would adjust the assessment amount levied on fresh apples each August, based on several factors specified in the state administrative code that include projected crop size, increases in dues to organizations to which the commission belongs, amount of matching funds required to qualify for federal Market Access Program funds, and --proposed program costs. The Apple Commission funds some activities of the U.S. Apple Association and the Northwest Horticultural Council.
If the levy rate increase is approved, the commission would notify growers, handlers, and dealers of changes in assessment rates no later than 15 days before the first billing of the new assessment rate.
Dave Carlson, president of the Apple Commission, explained that the board would determine the assessed rate, which could be up to 4.5 cents per 40-pound box, during August when it annually reviews the crop estimate. The rate would be effective for one budget year only, which runs from September 1 to August 31. If the board takes no action to increase the base rate the following year, he said the budget would revert back to 3.5 cents per box.
"The board didn't want to be building large budgets by raising the assessment by a set amount," he said. "This flexibility allows us to respond to the crop size."
Cragg Gilbert of Yakima has been on the commission board for almost six years. "We were thinking of the future by asking for the referendum to be approved," he testified. "As inflation of the dollar eats away at our surplus or if the crop comes in light, this allows us to develop a budget in light of inflation. We have no plans to increase staff unless industry directs us to, such as in the event of an emergency. For the most part, the proposed increase is just to balance our budget each year."
Naches grower-shipper George Allan, former commission chair and current board member, said at the hearing that the commission board was concerned about having adequate funding several years down the road. "…we recognized that we would have a major problem from inflation with the current set rate per box."
Unless the industry can sell more apples abroad, it will be difficult to raise prices on the domestic market, said Dale Foreman, WAC board member, former WAC chair, and a member of the executive board of USApple. Foreman, of Wenatchee, said that through the commission, the industry obtains millions of dollars of matching MAP funds from the federal government for export programs. The industry organizations that the commission helps fund, work to keep existing export markets open and gain access to new ones.
"This country can only consume so many apples," he testified. "We need to focus on export sales."
Entiat grower Bruce Grim, who is also vice president of USApple, submitted written testimony in support of the referendum. "Increased MAP funding in the 2007 Farm Bill [with nearly $2 billion earmarked for specialty crops like apples]will give the Apple Commission a chance to garner increased matched funding from this most effective and efficient program geared toward leveling the playing field in export markets," he stated.
"By exporting 29 million boxes of apples during each of the last three years, the industry's marketers have maintained a strong and profitable domestic market program for growers," he continued.
While most of the comments on the referendum have come from board members of the Apple Commission, one industry representative voiced opposition. Mary Jenks, owner of Jenks Brothers Cold Storage in Royal City, submitted a letter opposing any increase in the assessment, and instead, suggested that the commission be dissolved altogether. "We haven't missed the Apple Commission since they lost the majority of their power and have proven themselves to be a lame-duck organization."
She argued that the industry can --promote Washington apples on its own.
Bob Mathison of Wenatchee, in an e-mail, expressed concern about a lack of information on the issue and wondered what the commission does now and why they need an increase.
David Lawrence, president of Holtzinger Fruit Company, Yakima, said he would support the rate change if shippers and handlers were given more than 15 days' advance notice of the first billing. As a shipper, he would like to have 90 days' notice.