PMA/United Merger-Mention Stirs Emotions
Jim Prevor’s Perishable Pundit, October 31, 2006
The question of whether PMA and United ought to merge seems a hot button issue for many industry members. We raised the issue here and dealt with some initial response, both pro and con, right here.
Now we have a thoughtful response from John McClung, who is currently the President of the Texas Produce Association. John and I have what might be called a “history” together as he directed United’s government relations efforts during a time when the Pundit was very involved with United, working with staff members such as Anne Day and Debbie Moss as well as then President, George Dunlop, on a daily basis. John has some issues with what we wrote in the context of a discussion of the possibility of a PMA/United merger:
John’s missive is thoughtful and we appreciate his critique. Since we’ve been getting chewed out by people passionate about both organizations, we must have been fairly even handed. Still, let me clarify a few points in the original piece.
First, several PMA partisans complained about the line where I said that from a PMA perspective, a merger would “… bring the scientific and technical competency [of United] into PMA …” as they thought this was implying that PMA has no technical competency. In the context in which we were writing, we thought it was clear, and it was certainly our intent to confine our remarks to scientific and technical competency in regard to food safety and microbiology.
United, after its merger with IFPA, now employs both Dr. Jim Gorny, Vice President, Technology and Regulatory Affairs, and Dr. David Gombas, Vice President, Technical Service, both experts in Plant Science, Microbiology and Food Science. There are no PhD’s on the staff of PMA at the current time and, even during the industry conference calls, PMA President Bryan Silbermann would often defer to these experts when technical issues came up.
This being said, PMA has certainly been the leader in dealing with technical matters in the marketing chain, going back to PLU and UPC codes and now dealing with RFID, RSS and GTIN. But this is not what we were talking about in this article. It might be worth mentioning that the Board of Directors of PMA seem to also have perceived this as a weakness, as after the spinach/E. coli crisis they allocated funds to boost PMA’s scientific and technical staff in the food safety area.
Second, and more to the point of John’s letter, the juxtaposition of two things in the initial piece led some, including John, to think I was implying that United did a bad job at government relations and that United and PMA have equivalent government relations efforts. We did not intend that inference to be drawn from what was written, as we do not believe either of those things are true. Here is what we wrote:
The spinach/E. coli crisis impressed many with three ideas:
There is a need for the trade to have a single front in Washington.
There is no clear distinction between what PMA and United are doing in D.C., and there is a lot of duplication and waste between the government relations efforts of the two associations.
Whoever is doing government relations hasn’t been successful in building the kind of relationships that are crucial for the industry to create and maintain.
Number three is probably the most important. When United’s President Tom Stenzel indicated (at PMA’s town hall meeting on the spinach crisis, which we dealt with here) that he thought the key to understanding the FDA’s actions was understanding that they didn’t have faith in the produce industry and our products, the obvious question is: Whose fault is that?
The intent was to say that the industry divides its government relations expenditures amongst several organizations: United, PMA and WGA were most prominent in this crisis, but plenty of other groups also play a role, from the Florida Fruit and Vegetable Association to the Texas Produce Association to the Northwest Horticulture Council, plus many more organizations.
There is no clear distinction between what PMA and United are currently doing. In other words, it is not as if it has been agreed that PMA will handle regulatory matters and United will handle lobbying or that United will handle the effort on immigration and PMA will handle food safety. It is in this sense that there is no distinction between their efforts.
Of course, United, with its Washington Public Policy Conference, its D.C.-based location, its staffing levels and lobbying focus, runs a significantly more extensive government relations program than United. Indeed, for United, government relations is its raison d’etre. PMA could stop doing government relations and many would still want to be members. If United stopped this work, it is not clear that many would choose to support the association.
In saying that there is no distinction between what the associations are doing, I was stating that there is no clear divide by function or by issue — not that there was no distinction in staffing levels, approach, effectiveness, etc.
In addition, when I said “Whose fault is that?” I regret the juxtaposition with Tom Stenzel’s name. It was not my intent to imply, as it is not my belief, that it was Tom Stenzel’s “fault.”
I praised Tom Stenzel in our report on the Town Hall Meeting on spinach when I wrote that “…Tom Stenzel seemed the one most willing to, at least obliquely, challenge the decisions of the regulators…”
However, Tom was the one who identified the problem at the core of the crisis as being a lack of trust in the produce industry. And the overreach of the regulatory authorities urging people not to eat spinach from New Jersey, Colorado, Maryland and other places completely unaffected by this issue is a strong indication that Tom is correct.
A plane crashes and the FAA’s inclination is that the planes are basically safe, the air traffic system is basically sound, the pilots are basically well trained; so they treat it as an aberration unless given extraordinary reasons to think otherwise.
Our interpretation of Tom’s remarks was that we have to build up the confidence of the regulators in the produce industry so that they will react the way aviation regulators generally react.
Now John says to the Pundit: Do you really believe the day will ever come when the regulatory agencies, FDA or any others, will turn to an industry association in the heat of a crisis for guidance on what must be done to protect the public? For facts and details and insights, yes. But for policy direction, not a snowball’s chance. Do you really think they should? Come on, Jim — that’s just plain dumb.
Dumb like a fox. There was a famous wheeler-dealer by the name of Meshulam Riklis, a famous buyer and seller of companies (and, for a while, the husband of Pia Zadora), who did his business under a massive sign that said: “You can name the price, if I can name the terms.” Our take is that if you are the one the government turns to for facts, details and insights — you are, de facto, pretty influential in setting policy.
As to the substantive issue of how effective United’s government relations efforts are… as with most things in life, the answer is mixed. The fact that they were able to get the United States Secretary of Agriculture to come to their convention and give a speech shows great strength. However, the fact that the speech he gave last May had so little to do with our industry that it could have been delivered to the Farm Bureau shows that United still has plenty of work to do.
The truth is that history and circumstances have given United a raw deal. Its focus on government relations is not remunerative for the association. The industry has, over the past 15 years, shown a willingness to pay more in dues to support the effort, but it is meeting resistance now.
The Pundit raised the issue of a merger because it was raised by many top people at the PMA convention but, in time, the bigger issue may be financial. In the middle of its annual convention, the produce industry was flummoxed when, in a startling surprise, FMI announced that it was making shift to doing a trade show on alternative years.
This whole issue may be moot if United can’t generate additional income.
If so, the industry will have to confront many of the issues John raises. The Pundit thinks we do a service by encouraging us to think about them now.