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New Jersey Prepares To Define Local,
But Do We Need To Penalize Retailers?
How The Initiative Will Hurt Jersey Farmers And Consumers
Vic Savanello Speaks Out

Jim Prevor’s Perishable Pundit, May 18, 2015

As national country of origin labeling was about to become effective, back in 2003, Pundit sister publication PRODUCE BUSINESS ran a cover story titled Country-of-Origin-Labeling: Nothing Cool About It. COOL implementation was postponed, but in the end, farming organizations, thinking that clear labeling would dissuade consumers from buying foreign produce, succeeded in getting the law implemented. The impact on sales of US produce…so small it can't be quantified.

Now New Jersey seems intent on defining “locally grown” and then imposing fines if that definition is not adhered to.

Vic Savanello, Director of Produce & Floral for Allegiance Retail Services and President of the Eastern Produce Council, sees trouble down the road if the state starts issuing fines. 

We asked Vic to explain the situation, state his case and detail what he thinks needs to be done:

The Potential Demise of the
Jersey Fresh Marketing Program

Every night when I whisper goodnight to my daughter, I say to her, “Who loves you more than I do?” Her response back to me is always the same, “Nobody!” The same could be said for my relationship with the New Jersey Department of Agriculture and the Jersey Fresh marketing program.

I have been a huge supporter, often times an advocate for the program. I have been interviewed more times than I can count, a few times in this Pundit and in the sister publication, PRODUCE BUSINESS magazine, about the power of Jersey Fresh, New Jersey home-grown produce and the power of Locally Grown with the consumer. I have a highly developed Locally Grown program at my own company, one which received recognition on the cover of a national industry periodical just last year.  

It should come as no surprise to anyone reading this article that Locally Grown is the hottest thing in the supermarket industry since sliced bread. Nothing has more consumer acceptance or appeal than the identification as a locally grown product. I’ve witnessed firsthand, as consumer survey groups have stated, Locally Grown is probably the top decisive factor when making a purchase decision. I’ve even witnessed a consumer group state that Locally Grown outweighs their concern for food safety. Yes, food safety — concerning but true!

With all that being said, what is the issue? The State Board of Agriculture in the state of New Jersey, a group of eight farmer-members who “are elected by delegates from the agricultural community,” has determined that rules need to be introduced to define and classify the terms Jersey Fresh as well as Locally Grown in our state. Because there is no national definition of what “Locally Grown” means, the State Board of Agriculture has decided that they must now define it as farm products “grown or produced in New Jersey or are clearly identified with the locality and state of origin when that state of origin is not New Jersey.”

Along with that definition will follow a list of penalties that the Board will enforce when the definition they create is not adhered to. The fines being proposed could become quite excessive to a major retailer with multiple locations throughout our state. In fact, these fines would be so excessive that I have to consider discontinuing a Jersey Fresh as well as a Locally Grown program in the future.

And I am not alone, I have discussed this topic in length with most of my New Jersey retail counterparts in the produce retail industry. We are all in agreement that this could be the demise of potentially the most powerful marketing tool we’ve ever had in our tool box. We are all working through our own legal and labor relations departments to make our state representatives aware of our position on this topic.

This is currently, by definition, only a proposal at this time. The process allows for one of these proposals to sit for comment for at least 30 days. During that time, concerned individuals can write their comments and concerns to Alfred Murray at the Department of New Jersey Agriculture, or email them to: proposedrulesMarkets@ag.state.nj.us. In the end, after discussion with the Secretary of Agriculture and his staff, the Governor will decide whether to enact the rule or not.

As an industry we should be working together to increase produce consumption, not looking to devise rules and fines that control or monopolize sourcing options, regardless of price, supply or best quality. While I do love my Jersey Fresh produce, and my Jersey farmers, Mother Nature sometimes makes a neighboring state’s product more appealing and a better business decision for me and my customers.

I’m not ever looking to deceive my customers when making one of these decisions. I’m looking to supply them with the best product available at the best price possible, and I always strive to supply them with what they desire to satisfy their consumer needs. What consumers are we protecting if I have to procure an inferior product to resell to my customers, just because 4 weeks ago we thought Jersey-sourced products would be the right decision?

This is the produce business here, folks. We aren’t selling widgets. Rain, heat, wind, poor grower forecasting, infestation and human error can all change our ability to source product from a specific growing area. These same issues can affect our ability to accurately forecast and identify the very specific growing region of the products we have in every one of our stores.

Jersey Fresh and Locally Grown are two completely different topics, and they need to be treated as such. This is one of the biggest areas where this proposal completely misses the mark and causes the deep concern that it has. I do not support a rule with fines attached, nor does any of the supermarket retail community.

How can the State Board of Agriculture define what local is to a chain store that potentially can operate a store as far north as High Point and as far south as Cape May? Wouldn’t product being sourced out of the state of New York be more ”local” to the High Point store than product out of Vineland, NJ? If this is the circumstance, then who is deceiving whom?  

In my opinion, this effort to define “Locally Grown” as being grown in the state of New Jersey is not well thought out and actually appears to be somewhat self-serving to members of the Board of Agriculture, one of whom, at least, also operates a small farmstand store that competes with retailers like myself.

I believe Locally Grown probably does need to be defined, or at least treated with a little bit more integrity than we have seen in the past. I would welcome the State issuing a set of recommendations on this topic, recommendations developed through working with and alongside growers as well as retailers from our great state. If the Department of Agriculture or the Governor would like volunteers to work on this initiative, I would put my money where my mouth is and volunteer myself.

I urge everyone potentially affected by this proposal to send their comments before the July 3rd, 2015, deadline, to the address and people listed below. Find your voice and inspire others to find theirs. Our silence will be interpreted as our acceptance; don’t allow that to happen. We cannot allow a handful of people sitting on the New Jersey Board of Agriculture, some with conflicting interests, to dictate regulations with such devastating potential results without making an effort to prevent it!

Victor Savanello
Director of Produce & Floral
Allegiance Retail Services
President, Eastern Produce Council

PS I urge all to send thoughtful comments to:

Alfred Murray, Director
Division of Marketing and Development
New Jersey Department of Agriculture
PO Box 330
Trenton, NJ 08625-0330

Or email to: 

proposedrulesMarkets@ag.state.nj.us

******

New Jersey is not the first state to attempt to deal with this issue. We wrote a piece titled Extortion By Government when Vermont made a similar move.  But that was, in the end, compromised.

The problem here is that this particular definition — grown in-state — is just a political definition. It is ideal for politicians who are elected in only one state to be able to say they are doing something for that state’s farmers.

But they are not. As day follows night, New York and Pennsylvania will follow this act with acts of their own in order to protect markets for their farmers.

When all is said and done, farmers will actually be poorer. Why? A large, diverse market is the farmer’s friend. If the three or four big chains in one state are unwilling to pay the price or too demanding in other ways, the farmer’s great protection is that he can take his produce from New Jersey and sell it in another state.

But if all the states pass laws — as they will — giving home state farmers advantages in marketing — like the exclusive ability to call their product locally grown without additional labeling — then markets will constrain and it will be more difficult for farmers to sell out of state.

That is not a win for New Jersey farmers.

It is also not a win for New Jersey consumers. First, it adds another complication to procurement beyond just getting consumers the best produce at the best price. Second, retailers don’t actually pay any fines. Fines become a cost of doing business and have to get passed on in some way. Perhaps growers will be paid less, or maybe consumers will pay more, or workers receive less. But the fines will, in fact, be paid for.

We read things like this and see it as a solution in search of a problem. Some things are not defined exactly because there are many meanings. Local, for example, can mean a tribal or political sense — in which case New Jersey or a county in New Jersey could be the “right” definition. On the other hand, those very concerned about reducing food miles or their carbon footprint will probably want a geographic definition — within 50 miles or whatnot. Both definitions are equally correct; they just view the issue from different perspectives.

What terrible wrong is being done that requires the state to intervene is simply not clear.

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