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Market order issue involves biggest players

Hi Harry,

The marketing order courtroom problems (Harry Cline's 6-7-03 Commentary) are also aggravating the only thing that I find to be a problem in the free enterprise system — a system that I otherwise appreciate and admire — and, that is the power of big capital to overcome the virtues of quality, economic production. The successful marketing order programs have usually established standards for their products and then promoted them generically. The “size” of the pie subsequently grows and all producers benefit. The processors then compete for their “slice” of the pie.

When you have some big, vertically integrated players (or conglomerates with various sources of income) who can afford to promote a brand, they are probably being accurate in their assessment that they can pursue a better strategy by spending their money on brand promotion (I think that even small organic — specialty — producers probably think the same). They can afford to “lose” money for awhile if they ultimately end up with a larger “slice” of the pie and, if in fact, they can drive out the competitive growers who have less capital to endure a period of hardship, then they get a double-win.

I understand that the creation of the Capper-Volstead Act was specifically to exempt cooperative growers from anti-trust legislation so that they could deal with these difficult competitive issues.

The whole controversy is also a difficult issue to resolve philosophically if you believe in all of the freedoms that we hold dear and if you strongly support the free enterprise system of our capitalistic economy.

Commissions are “socialistic” in the sense that “the quasi-governmental agency,” the commission, acts on decisions for the good of the community whether I want to be included or not (I can not exempt myself from participating).

Commissions are highly democratic in the voting process, but they certainly limit one's ability to be different, independent.

The alternative is to put together a voluntary program. The problem with a voluntary plan is that a lot of people will freeload on the backs of people — often including many big guys — who are willing to pay the bill for promotion. When there is no recourse for the guys paying the bill, the enthusiasm for being a good guy usually wanes.

I agree with your assessment that many commissions have returned more dollars per dollar spent than almost all of the investments that most of us have made. I think that the wine grape industry probably looks at the almond growers today and wonders where our voluntary program has gone wrong. I believe that lack of timely programs and adequate financing are our bottom line shortcomings.

Can you explain to me why grape growers who spent $1.5 billion on vines and trellises the last few years (that's excluding the cost of the land) and, at the same time, they invested almost nothing in promoting a market for the eventual production from those improvements?

We are a good example of what happens when you do not aggressively support the consumers' interest in your market.

I believe in voluntary programs, but the solicitation and management of participants is about as easy as herding a thousand cats across a shallow stream.

Meanwhile, keep up the provocative editorials.

Rich Smith
Valley Farm Management Inc.
Soledad, Calif.

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