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Pundit’s Mailbag — National Marketing Orders And Agreements

Jim Prevor’s Perishable Pundit, July 18, 2007

Our correspondent today has written to us before. Our piece, Pundit’s Mailbag — Two Windows And Two Issues, was built around the written testimony he had submitted to the FDA. One focus of that testimony was a recognition that one way to reduce liability for growers and handlers was to reduce the risk to consumers by having better treatments available for illnesses that can be a consequence of exposure to E. coli 0157:H7, particularly Hemolytic Uremic Syndrome (HUS), the kind of “kidney failure” that typically kills or does permanent damage in these cases.

It was a useful insight that the produce industry has ignored at its peril. After all, if HUS was an easily treated illness, this would change the dynamics of food safety quite substantially.

Today we received another note:

Congratulations on The Wall Street Journal Op/Ed. I’m one of the dinosaurs who still gets the print edition (as well as the on-line edition and services).

I received an email with the following:

“Lloyd Day, Head of the USDA Ag Marketing Service and the Organic Program, has been tasked to write a Federal Marketing Order for Leafy Greens.”

Does this square with what you’ve heard?

I also note that the Eat Healthy America Act has a provision to put control of on-farm food safety into the purview of all specialty crop marketing act entities (agreements, orders, etc) at the federal level.

Do you think the LGMA is a good enough model for federal, mandatory controls through the Marketing Act? Or is it more likely to backfire?

Obviously someone working in DC is pushing the original California program (state agreement, state order, federal agreement, federal order) harder than originally planned.

— Dan Cohen
Maccabee Seed Company
Davis CA

Dan raises an important issue on which there has been much confusion. The issue is really, what next? What is the next food safety step for the industry after the California Marketing Agreement?

The original plan was for the growers in the state of California to move from a Marketing Agreement — which is optional to sign-up for, although it is legally enforceable once one does sign up — to a Marketing Order.

This is mandatory and would cover all growers in the state — but Western Growers Association has held off on pursuing this plan because it doesn’t believe it has the votes. The fact that a year after such a catastrophe, WGA doesn’t think the spinach, lettuce and leafy greens growers of California would vote for mandatory regulation tells us may be more than we want to know about the real standing of food safety in our industry.

There are ongoing discussions with Arizona to try and do a second marketing agreement in Arizona with the thought being that between California and Arizona, we will have covered a big portion of the product used by major processors.

When it comes to a national marketing agreement or marketing order, we have something of a split among the big players in the industry. United and PMA have come out in favor of a federal regulatory program administered by the FDA. The Western Growers Association, which now has a Washington D.C. presence of its own, has favored the use of marketing agreements and marketing orders administered by USDA.

A national marketing order could, theoretically, provide food safety assurances, especially if it was structured to include imports.

One problem is that the USDA is seen by advocacy groups and the media as a farmer’s advocate and not an effective regulator. This means regulation via marketing agreements or marketing orders may not achieve the industry goal of rebuilding consumer and regulatory confidence.

The California Leafy Greens program has headed-off initial legislative proposals in California in large part because there have been no more outbreaks. If, God forbid, someone else dies from eating leafy greens, the immediate outcry will be that the “industry-drafted” metrics are inadequate and that the new outbreak stands as proof positive that industry self-regulation doesn’t work.

This voluntary nature of the Marketing Agreement is still problematic. Right now we are very vulnerable as it is only a matter of time before someone withdraws from the California Marketing Agreement. This will lead to instant attacks as the consumers will no longer be protected on virtually all the products they might buy.

Which leads us to question the practicality of a national marketing order. We have a few national marketing orders on items such as watermelons and mangos. However, as we said, Western Growers Association did not move to a mandatory marketing order in California in part because they didn’t have the votes.

A marketing order requires a vote of the growers, and WGA didn’t believe it could get those votes in California — how in the world are they going to get them in Colorado and New Jersey?

To sum up what really is a happening: USDA AMS is in the very preliminary stages of putting out an advance notice seeking comments from industry, consumers & other interested parties on whether the California Leafy Greens Agreement should be expanded nationwide. The key word is AGREEMENT. This would not be a marketing order.

Pundit Investigator and Special Projects Editor Mira Slott spoke with Bob Keeney, Deputy Administrator for Fruit and Vegetable Programs, Ag Marketing Service (AMS) to get some details:

Q: What is the current status regarding efforts to take the California Marketing Agreement national?

A: What we’re doing is preparing a document now called advanced notice of proposed rule making for a leafy greens marketing agreement nationwide.

This will be a document that will solicit comments from the industry on whether the government should issue a nationwide marketing agreement for leafy greens or not.

There is a marketing agreement in the state of California only. What we’re working on is a very, very preliminary look on whether the industry feels we should issue this agreement nationwide. We would first be soliciting comments from industry, consumers and all interested parties on taking this agreement national.

We want to emphasize this is very preliminary.

Q: Is there anything happening with the development of a marketing order?

A: We’re not looking at a federal marketing order for leafy greens.

Q: What are the differences between a marketing agreement and marketing order in your mind?

A: The difference at the federal level: marketing agreement allows regulation, if shippers agree. They become signatories then have to abide by all terms of the agreement. In California when they signed the agreement they agreed to abide by it. Marketing order differs in that all the handlers would have to abide by those requirements — whether they agreed or not.

At the federal level we are only looking at marketing agreement and we’re at a very preliminary stage.

Mira also spoke to Jimmie Turner, Public Relations Specialist Fruit & Vegtable Programs, for additional information:

Q: What is Lloyd Day’s position? And what is going on with regard to a national Marketing Order for Leafy Greens?

A: The Marketing Order Administration Branch is under the auspices of Lloyd Day. Any marketing orders or marketing agreements would be managed, coordinated through that branch.

What’s happening now is that the USDA AMS is working with California leafy greens growers seeking to make the California Marketing AGREEMENT nationwide. THIS IS NOT an ORDER, it’s an AGREEMENT.

Once a formal request from leafy greens growers is received that they want to change or establish a marketing order or agreement, a notice is put out in the federal registry seeking comments to change or establish the marketing order or marketing agreement or to not establish such an order or an agreement. People are given a comment period which could be 30 days or could be 60 days. Once comments are received it goes to the Marketing Order Administration Branch.

However, this effort to expand the California Agreement nationwide would not be a marketing order, it would be a marketing agreement. We also have not received any formal request from the industry. We are doing this preliminary work on our own.

As far as USDA AMS’s involvement, we’re in the process of putting out an advance notice, it’s a preliminary step toward a marketing agreement nationwide, seeking comment, asking questions, then analyze those comments, then promulgate agreement if that is the determination. A marketing agreement is voluntary, unlike a marketing order. Handlers of leafy greens become signatories, and by signing the agreement they agree to abide by the terms of the marketing agreement.

USDA AMS and leafy greens growers met in DC a month ago about this effort to extend the agreement nationwide. We’re getting ready to prepare an advance notice. As part of the process, for our purpose we publish advance notice in the federal register seeking comments.

The basic position of United and PMA has been correct on this: The use of marketing agreements and marketing orders for food safety is fine. Each one, incrementally, can advance the cause of food safety by developing metrics, establishing inspection regimens and with each additional state or national plan expanding the scope of exposure of these food safety plans.

So WGA can do what it wishes and it will get no opposition. After all, the growers have to either voluntarily sign up (a marketing agreement) or vote to establish (a marketing order) all these mechanisms.

Yet, in the end, if we continue to have food safety problems, only the FDA has the broad credibility with the health community, the media and consumers, to assure consumer confidence in our products.

That strikes us as about right.

Many thanks to Dan for giving us an opportunity to discuss this important subject.

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