United comment on the federal leafy greens question

What does the industry want the USDA to do about the question of a marketing agreement/marketing order for growers/handlers of leafy greens? I think the best and likely the hardest approach would be a marketing order for growers. The comments submitted to USDA by the United Fresh Produce Association concerning a possible leafy greens federal marketing agreement/order are found here. As you remember, the USDA's Agricultural Marketing Service had a Dec. 3 deadline on their advance notice of proposed rulemaking on
a possible handler marketing agreement for leafy greens.

Here are some excerpts from United's comments:

Perhaps the most key question at hand is the degree of nationwide industry support for various types of marketing programs, and a thorough explanation of various options at AMS’s disposal. We note that the ANPR is a bit unusual compared with traditional development of federal marketing orders or agreements, in which industry proposals are usually submitted requesting AMS to take such action. However, AMS is correct to note that there is substantial current interest and motivation to ensure that best practices are adhered to in any given production area of leafy greens. In addition, there are many organizations – including this one – that strongly support produce safety standards that are commodity specific, based on the best available science, applicable widely to different production areas, and are federally mandated with sufficient oversight of compliance to be credible to the public. In that context, we suggest that AMS should evaluate all the tools it has that can help industry achieve the goals stated above, and how the different options may provide varying
benefits to the industry. Specifically, we believe it is important for AMS to be very clear about what marketing programs under its authority can and cannot do, and then allow the industry to provide its collective judgment on what programs industry wants to initiate.

TK: Translation; don't lead us; show us the options and we will decide. United's take on a leafy greens marketing order:

This is most typical form of a federal marketing program administered by AMS under the Agricultural Marketing Agreement Act of 1937. Marketing orders are designed to help anindustry sector set common standards (most often for quality but potentially for food safety), provide for research, and support common market development and promotional activities. Marketing orders are the strongest tool an industry can choose for AMS to administer, as once approved by a grower/producer referendum, compliance with the order becomes a legal mandate subject to civil penalties. Ideally, a marketing order for any commodity provides greater assurance that the growers of that commodity indeed support its implementation. Growers vote themselves for establishment of the order, and have the opportunity subsequently to vote out the order if no longer supported. Should AMS propose a marketing order for leafy greens, growers would be free to support or oppose its etablishment. Passing a grower marketing order for leafy greens may not be easy, but a strong national campaign in which growers receive comprehensive information about the order and choose to vote for its establishment would produce the most ideal conditions for industrywide consensus and collective action. A marketing order passed by growers also offers several other benefits. Since the rules established under a marketing order would be mandatory, they would apply to all sectors of the leafy greens industry. That is not to say that one set of practices would have to apply to every situation. In fact, the marketing order board could certainly take regional differences in production practices into account, establish best practices for different types of production techniques, etc. While a marketing order has teeth, it need not be universally prescriptive. Next, a mandatory marketing order gives stronger basis for imported leafy greens being compelled to comply with the same standards. That is contrasted with a handler marketing agreement discussed below, which could only compel compliance for non-domestically grown leafy greens if they are handled by a signatory to the agreement. Finally, a true marketing order would spread the financial support for the order across the entire industry, requiring financial contributions from all sectors. This equanimity may be important to producers who are paying, as well as better able to support adequate funding for the priorities set by the marketing order board.

United's thoughts on a federal leafy greens marketing agreement for growers:

In general, a voluntary marketing agreement offers perhaps the easiest means for companies to agree to collective action, and would most typically be used to share in joint research or promotion. This format allows only those companies that wish to enter into the agreement to share costs and commitment to common action, and does not compel funding or smilar action by others within an industry. This ease of implementation however makes an agreement more challenging when it comes to compelling specific quality or food safety practices across a diverse grower base. While it might be perfectly acceptable for 75% of growers of a certain commodity to join together to fund a promotional program, the implications of only 75% of those growers choosing to follow the same quality parameters or food safety practices may undercut some of the purpose of the agreement in the first place. However, this approach should not be ruled out as a potential marketing program under AMS to support the leafy greens industry. Should AMS implement a voluntary marketing agreement among growers, even if only 75% of growers participate, the standards and verification of practices adopted by participating growers could still have significant impact in the marketplace. These growers would be signaling to shippers, processors, retailers and foodservice buyers that they have a clear choice for sourcing raw leafy greens from signatories to the grower marketing agreement. For those local growers who sell at farm markets or do not wish to participate, they would not be compelled.

United's take on a leafy greens marketing agreement for handlers:

Similar to a marketing agreement among growers, a handler agreement would be relatively easy to implement. This format allows those handlers that wish to enter into the agreement to quickly share costs and commitment to common action. This approach was used by leafy greens handlers in California this year when industry members felt an urgent need to implement common best practices as widely as possible given potential marketplace concerns about their products. That being the case, a national leafy green agreement may be the quickest means of action and a positive way to assist the industry in meeting its current marketing challenges. Our association sees strong synergy and cooperation among the close-knit growers and handlers in the California Leafy Greens Marketing Agreement. Our scientists and technical experts helped develop the best practice GAP metrics for leafy greens that served as the basis for that agreement, and we urge that the process used to develop these practices be adopted as the basis for any public health regulatory standards including a national leafy green handler agreement. We have strongly supported our handler members participating in this agreement, and encouraged our grower members’ active participation, as an immediate and important reaction to tackle today’s marketplace challenges. We would encourage the same support through a national leafy green handler agreement. If this is the process that compels the industry, it is important for USDA to carefully consider the longer-term implications of handler agreements beyond this immediate case. Conceptually, a USDA authorized agreement among handlers not to buy raw produce from growers who do not comply with what those handlers want may raise questions that a grower agreement does not. This could be particularly true depending upon the definition of handler in such an agreement. It would therefore be critical that USDA define handler more rigorously, looking to identify the first handler or that entity clearly closest to the grower. The produce industry is also now facing significant challenges in the use of market power to compel compliance with a host of different food safety practices down the supply chain. Some of those practices may be wise and good steps that all producers should take; but, others may be less grounded in science or based more on the unique opinion of certain buyers upstream from growers. Beyond leafy greens specifically, USDA should carefully consider the wisdom of investing collective market power upstream in the supply chain to compel grower behavior on matters not required by law. Therefore, USDA may want to consider a Voluntary Marketing Agreement Among Handlers and Growers as a means to utilize the benefits of a marketing agreement, vs. marketing order, and gain the rapid commitment to action of both handlers and growers, and yet avoid the challenges and potential criticism of investing buyers with sole authority to develop and oversee standards for the grower industry. Indeed, a marketing agreement in which all entities in the supply chain are involved in the formulation of such handling practices, with recognition of differing perspectives based on production region, sub-commodity, and even size of facility, provides the greatest potential for transparency, understanding and acceptance. Such an agreement must allow for periodic assessment and modifications as experience and science reveal opportunities for improvement.