The Fruit Growers News - January 2002


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Michigan to Hold Separate USApple Dues Referendum

By Greg Brown Associate Editor

The Michigan Apple Committee (MAC) board has voted to conduct a referendum to find out if apple growers in the state want to continue to support U.S. Apple Association’s (USApple) increased dues schedule. MAC’s action is in response to tough times that are being felt across the industry, according to board discussion during its December meeting. The committee voted at that meeting to hold a referendum on whether to support the increase in USApple dues. Michigan’s USApple referendum has been tentatively scheduled for August 2003. According to board members, the USApple referendum will fund the additional incremental amount, letting the growers decide on the increased dues structure. This vote will be held right after MAC’s resubmittal referendum, which would continue the committee’s program for another five years. “The wording the committee voted on is that there would be a referendum to ask Michigan growers if they support the additional four-mil increase that has been levied by USApple, and if they will pay for it with additional dues,” said Mark Arney, MAC’s executive secretary. “The question is, do you support this increase, because we don’t have the money to fund the increase amount from our existing budget,” said Arney. Over a year ago USApple announced an increase of its assessment rate to .8 cents per bushel incrementally by 2004. After previously tabling the issue, Michigan decided at its November meeting to “support USApple at the 6.5-mil dues structure contingent on the collection of unpaid assessments.” This 6.5-mil level is the first incremental step to the new eight-mil level. In mid-December Arney estimated that the committee was just one quarter behind on membership dues. In the meantime, he said, the organization has had to cut back in three areas, including trade promotions. What would the additional referendum cost growers? The additional dues structure would add approximately a penny per cwt. on each fresh, processed, and juiced apples, according to Arney, but the board has not decided what formula to use. In other board action, the committee received approval to borrow on a line of credit, approved by the Michigan Department of Agriculture, up to $300,000. The tentative line of credit will be used only if necessary, according to Arney. That line of credit closely mirrors how much they are still owed by two apple processing organizations, stemming from unpaid fees from the 2000 growing season. “We’re not fighting them (USApple). We’ve gone on record with board action in support of USApple. We’re just looking for alternative ways to pay. “The difficult thing for me is to go out and borrow money to pay USApple when they are sitting on $1 million of liquid assets. “We are looking for an alternative way of funding USApple,” he said. “If we are having problems at the four-mil level, we will continue to have problems at double the dues level. “We never anticipated that USApple would double their dues,” said Arney. “We never anticipated that we would lose 18% percent of our growers or that two of the biggest shippers in the state would have these financial problems and cause financial problems with our organization.” Arney pointed out that the Michigan grower community is not the only one falling on tough times. The USApple referendum is the most democratic way of passing the additional funding, he said. Jim Allen, president of the New York Apple Association, said he hopes that the apple organizations in Michigan will continue to support the work of USApple. “We hope that Michigan adopts the new dues level and supports USApple,” said Allen. “It is important the they support the organization and are on the team.” Allen acknowledged that times are tough across the board. He said that it is important to recognize that before the dues increase went into effect his association and Michigan’s was paying dues plus two or three a la carte fees to USApple. Those fees, which included contributing to national research and crisis communication efforts, are no longer levied. Instead, they have become a part of the incremental increases. “When we added those up, we were previously paying much more than the basic dues,” said Allen. “By continuing to pay our incrementally increased dues, we are a little bit betting on the industry’s future and that we can plan on affording those dues as they accelerate.” And, like all of the other states that decided to support the nutritional research and crisis communication and were previously sent an additional bill for those services, NYAA has just tightened their belt. “We’ve saved some money on staff and we are doing more of our services on a retainer basis,” said Allen. “We are trying to be more frugal, but we have not cut back on promotional marketing and we feel that this is very justified.” Many of California’s apple growers are not meeting their bottom line, but the organization has continued to make their USApple payments, voting to go ahead and meet the higher dues schedule, said Kenton Kidd, president of the California Apple Commission. “We have made a lot of cuts to be able to make ends meet,” said Kidd. “I think that this is the story across the board. Washington and many other states are taking a good hard look at what they are doing with their budgets.” California has suspended the hiring of outside groups who previously handled the management and placement of representatives calling on buyers, as well as cutting the funding previously budgeted to an outside ad agency. Many of these activities are now handled by the association. “Everything is in house,” said Kidd. “If there is something that we need to have done by outside contractors, we do it, as far as recipes or point-of-purchase displays are concerned. “We don’t travel as much as we used to. If we can conduct business by e-mail and phone we do so,” said Kidd. “This year, for example we didn’t attend PMA (Produce Marketing Association), which saved us $5,000-6,000 in travel expenses. We’ve also reduced our memberships and dues to outside groups. We are trying to conserve every penny.” Two things California has not cut are promotional efforts and communication efforts. “We still attempt to put out a member newsletter two times per month, if there is enough news to justify the mailing expense, “ said Kidd. “And we are still able to maintain some of our research efforts that are funded by the commission.”