Tomorrow is an important beginning to what I hope will become a powerful, well-run, and quality-centric industry in the United States – the olive oil industry. In Dixon, California at the Fairgrounds olive growers and olive oil processors will meet to begin the process of establishing a marketing order for olive oil. According to the sponsors, one of which I know is NursTech, the Spanish-owned super high density (SHD) olive tree supplier, this 1st Annual Olive Oil Conference is free to attend.
I saw this conference advertised over the last few weeks and decided to educate myself on marketing orders. One very important thing I learned is that there is a marketing order for table olives grown in California, but none for any table olives grown outside California, and no marketing order or agreement in the US for olive oil. I guess with so many folks in California growing olives for oil and with growers and processors now cropping up in other states the time has arrived to organize (not in the labor union sense).
Here is some of what I have learned from the Agricultural Marketing Service of the United States Department of Agriculture and from the National Agriculture Law Center located at the University of Arkansas. It’s dry reading but I am convinced, after my research, that in order to have a strong olive oil industry the US growers and processors must engage in this procedure.
Marketing Orders and Agreements: “Marketing agreements and orders are initiated by industry to help provide stable markets for dairy products, fruits, vegetables and specialty crops. Marketing orders help to maintain the quality of produce being marketed, standardize packages or containers, and authorized advertising, research and market development. Each order and agreement is tailored to the individual industry’s marketing needs.”
Fruit, Vegetable and Specialty Crop Marketing Orders:
“Federal marketing orders are locally administered by committees made up of growers and/or handlers, and often a member of the public. Marketing order regulations, initiated by industry and enforced by USDA, bind the entire industry in the geographical area regulated if approved by producers and the Secretary of Agriculture.
Marketing orders and agreements (1) maintain the high quality of produce that is on the market; (2) standardize packages and containers; (3) regulate the flow of product to market; (4) establish reserve pools for storable commodities; and (5) authorize production research, marketing research and development, and advertising.
Marketing agreements and orders are legal instruments authorized by the Agricultural Marketing Agreement Act of 1937 and in subsequent amendments. The Secretary of Agriculture is vested with the power to exercise the use of these instruments to regulate the marketing of eligible commodities — fruits, vegetables, specialty crops, and milk — in certain clearly specified ways. Marketing orders help fruit and vegetable growers work together to solve marketing problems that they cannot solve individually. They help balance the availability of quality product with the need for adequate returns to producers and the demands of consumers.
Marketing orders are binding on all individuals and businesses who are classified as “handlers” in the geographic area covered by the order. Marketing orders are distinguished from marketing agreements, which are binding only on handlers who are signatories of the agreements. The definition of handler and handling depends on the particular program. As defined in most agreements and orders, a handler is anyone who receives the commodity from producers, grades and packs it, transports, or places the commodity in commercial channels. Handlers must comply with the grade, size, quality, volume, or other requirements established under the program.
All marketing orders are initiated by producers. Producers have an active role in the development of program provisions and support them at hearings. Approval by a two-thirds or larger majority (three-fourths of California citrus producers) by number or volume represented in a referendum is required before any program is implemented or amended.
For fruit, vegetable, and specialty crop marketing orders, local committees of farmers and handlers – appointed by the Secretary of Agriculture – administer the orders. Committee expenses, as set forth in budgets approved by USDA, are defrayed by assessments on handlers. Generally, any excess funds are set aside in a reserve fund for future needs, but they may be credited to handlers’ accounts against future assessments or returned to handlers at the end of each marketing season upon request.
Committees employ staffs to administer order provisions (e.g., collect assessments, assemble reports, oversee compliance with order provisions), and must maintain the confidentiality of all information submitted by handlers. Committees actively work with all handlers to explain marketing order requirements and to advise them on any particular concerns the handlers may have. Also, committees issue periodic instructions – written in plain English – and provide pertinent dates to comply with any required assessment payments, report submissions, or other program requirements. Committees place a special emphasis on helping small businesses that are handlers regulated under their programs for the first time.”
Steps to Establish a Marketing Order:
“The industry meets to identify mutual marketing problems and determine whether a marketing order could help the industry solve these problems. During these discussions, USDA staff may help the industry identify marketing order authorities relevant to the industry’s problems.
1. If there is general industry support for a program, a preliminary proposal is prepared by a steering committee of key industry people. Growers and shippers are included in discussions on the proposal.
2. A list of industry growers and handlers is developed by proponents. Next a request for a hearing on the proposal is sent to the Administrator of AMS. It should indicate the degree of industry support, the problems the program would address, and suggest a possible hearing site and approximate date.
3. AMS reviews the request and supporting documents, as well as any alternative proposals from interested parties. During this period, the staff of USDA is free to discuss the merits of elements included in any proposal with the industry.
4. A Notice of Public Hearing is then issued, and it is published at least 15 days before the hearing. USDA staff can comment only on procedural questions after this point.
5. A USDA Administrative Law Judge presides at the public hearing and a verbatim record is compiled of the testimony of opponents, proponents and others, including USDA personnel. Because proponents bear the burden of proof, they must present evidence to support the need for the program, and every provision in it. Briefs arguing for particular decisions may be filed with USDA after the hearing.
6. A recommended decision is issued by USDA based on hearing evidence. This is USDA’s formal recommendation on the proposal. Persons are allowed to file exceptions to it for a set time period.
7. After consideration of all exceptions to the recommended decision, USDA prepares a final decision. If it is favorable, a grower referendum is held on the proposal.
8. While producers are voting, copies of a companion marketing agreement are sent to handlers for their signature. Through their signatures on the agreement, handlers indicate their intention to abide by the terms of the program.
9. If at least two thirds of the growers voting by number or by volume approve the proposal, the Secretary of Agriculture issues the marketing order.
This process may take up to one and one-half years to complete, depending on the complexity of the proposal, the size of the industry, and the availability of resources within the industry and USDA to devote to the proposed program.“
Here is the link to the National Agricultural Law Center Reading Room on Marketing Orders. It has current legislative, regulatory, and case law. I really enjoyed reading up on marketing orders here. I love this stuff.
Now you can be an expert on Marketing Orders. Have fun.
May the sun shine through your branches.