Since the federal court decision in March 2003, the Washington Apple Commission has gone through some dramatic changes. The decision of District Court Judge Edward Shea ruled that the commission’s assessments of 25 cents per carton of packed fruit violated the U.S. Constitution’s First Amendment regarding free speech. In response, the commission immediately terminated all domestic and most of its international promotional programs.
After negotiating a settlement agreement with an assessment of 3.5 cents per carton, the commission resumed promotional operations in international markets, which are funded by USDA Market Access Program funds available only to industrywide promotional entities such as the commission. As part of its restructuring, the commission also became a Washington State agency in June 2004.
Due to the decreased assessments, the Washington Apple Commission’s annual budget has dropped from over $29 million to about $7.4 million. Of the grower funds, 42 percent are used for the export program, 15 percent are used for administrative costs, and 43 percent are passed on to the Northwest Horticultural Council, U.S. Apple Association, and Northwest Fruit Exporters.
The apple commission’s restructuring has included becoming a landlord. In an effort to defray some of the expenses of maintaining the Wenatchee-based headquarters, the commission is now leasing unused office space to some industry-related organizations and several private companies. The conference building is being used for industry functions and is rented on an event basis to other organizations.
Market Access Program
With the elimination of a domestic marketing program, as noted above, the commission’s primary role is centered on the export promotion program. Each year, the commission writes marketing plans to apply for funding from the USDA’s Foreign Agricultural Service Market Access Program. These plans cover individual countries as well as larger marketing regions, like Central America and the Middle Eastern countries. For the 2005-2006 marketing year, the commission was awarded $3.8 million to conduct promotional programs in 16 export marketing regions. Grower funds of $1.6 million supplement the MAP funds for a total of $5.4 million used on export activities.
The commission’s export staff, together with members of the Foreign Trade Committee (which includes board members and participants from the export shipping community), held an extensive strategic planning session in late 2004. At that time, the decision was made to focus the export program on emerging markets and rebuilding existing markets that had potential to regain ground previously lost to competition from Chinese and Southern Hemisphere apples. Staff identified India, Russia, and Vietnam as emerging markets, while Thailand, Singapore, and Malaysia are examples of rebuilding markets, mainly due to their rapidly developing retail sectors.
To jump start the 2005-2006 season, the commission made an effort to build early momentum in the export markets. With that goal in mind, the export staff and representatives were implementing action plans by July 16. As of December 31, 2005, export shipments for the 2005-2006 crop year were 10.5 million cartons, compared with 9.4 million cartons last year, when Washington produced its largest crop ever. Prices this year are better than last year.
Visiting foreign markets to assess promotional efforts and provide support to in-country representatives and trade is an important role that the Washington Apple Commission continues to play. Staff members visited Dubai, United Kingdom, Thailand, Taiwan, Singapore, Malaysia, Russia, and Canada this season. Additionally, participation in trade shows in Atlanta (Produce Marketing Association), Berlin (Fruit Logistica), Dubai (Mid-East Fruit Congress), Beijing (Asia Fruit Congress), Guadalajara (Associación Nacional de Tiendas de Autoservicio y Departamentales or ANTAD), and Vancouver, B.C. (Canadian Produce Marketing Association), is an integral part of the program to assure the importer, wholesaler, and retail trade that the Washington Apple Commission is still active and promoting Washington apples in their markets.
The commission will continue its focus on export marketing and working closely with private industry partnerships in the future. Complementing those efforts will be a strong working relationship with Northwest Horticultural Council, USApple, and Northwest Fruit Exporters. Collectively, these organizations work on market access, phytosanitary issues, overcoming trade barriers, and on educating and promoting on behalf of the apple industry.
The top priorities of the Washington Apple Commission continue to be protecting the valuable logo and promoting Washington apples on behalf of our growers, now exclusively in international markets. The symbol represents the quality that has made Washington apples the “Best Apples on Earth.”