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Chile Earthquake Assessment

As we went to write about the earthquake in Chile, we held off, just because the information was as much rumor as fact.

In fact it was just March 4th when the authorities reduced the estimated death toll from 805 people to 279 as The New York Times reported:

Chilean emergency management officials announced Thursday that they had significantly overestimated the death toll from last weekend’s earthquake, lowering the figure from about 805 people to about 279.

Carmen Fernàndez, the director of the emergency management agency, known as Onemi, said in an interview that in several badly damaged municipalities, officials had erroneously included the names of people who were missing on the lists of those who had been killed.

“The number of people dead continues to be lamentable,” she said. “But it is significantly lower than those killed in earthquakes like this one that have occurred in other parts of the world.”

The total number of people who died in the earthquake could still change substantially over time. Many people are still missing, and not all of the dead have been identified.

The loss of life is, of course, a tragedy but considering the power of this earthquake — roughly 500 times what hit Haiti and literally strong enough to throw the earth off its axis — it is a remarkable achievement to have kept the death count so low.

We owe thanks to many who offered us reports: Rick Eastes, William Kopke, David Marguleas, John Pandol, Fred Vandenberg and others. We didn’t publish these reports because, in the chaos of the moment, they were often contradictory.

The most recent report from the Chilean Exporters Association says there was some damage to packing stations and cold storage facilities but relative normality will be restored with five working days:

UPDATE ON CHILE EARTHQUAKE
IMPACT ON FRUIT SUPPLIES

SANTIAGO, CHILE (March 3, 2010) — The Chilean Exporters Association (ASOEX) has surveyed the industry to assess the condition of the infrastructure, including internal transportation, electrical and port services.

Results indicate damage in major production areas and in the infrastructure, including packing stations and cold storage facilities. Seventy-eight percent of the damage occurred in regions VI, VII, Metropolitan Region and VIII, affecting mostly tablegrapes, apples, pears and blueberries.

Consensus among industry exporters and growers, however, is that the critical issues will be resolved within the next five working days, with a return to relative normality. Additionally, companies are showing the expected solidarity and are working together to ensure that the industry will be back on its feet and operating normally.

Meanwhile, the Chilean government has put in place well-rehearsed plans and programs to help speed the recovery of operations. Authorities have begun to repair the highways and bridges that are crucial to the transport of fruit from the growing areas to the ports. Since last Saturday’s earthquake, most areas have remained connected through alternative routes, but there have been inevitable delays in arrival times.

As of Wednesday, the Santiago Airport had begun servicing both incoming and outgoing flights from almost all major airlines for international and domestic routes, but with some key delays, it will take a few more days to return to full capacity.

The country’s main port of Valparaiso is loading from piers No. 1, 2, 3 and 6, working at 90% capacity. The northern fruit port of Coquimbo is operating normally and receiving without any problem fresh fruit that has been redirected from other ports.

Chile’s second-largest port, San Antonio, is operating at 60% capacity through the terminal EPSA (Empresa Portuaria de San Antonio) via piers 4, 5, 6 and 7, while the STI (San Antonio Terminal Internacional S.A.) is currently lacking electrical supply. Power is expected to return shortly, and will then be functioning at 90% capability. The small amounts of fruits that were destined to the port of Lirquén will have no problem being forwarded to alternative ports.

In regards to the fruit inspection sites servicing the U.S. market, all five facilities are up and running and receiving fruit for inspection.

“There are still some production areas as well as packing and cold storage facilities that have either no electrical supply or that have highway infrastructure damage, but through our discussions with authorities, complete electrical supply should be restored within the next 48 hours,” said Ronald Bown, Chairman of the Board for ASOEX. “All involved in the growing, harvesting and shipping of fresh fruit in Chile are committed to holding distribution disruptions to a minimum.”

ASOEX would also like to thank the international fruit community for itscontinuing support and would like to emphasize that fruit growers and exporters in Chile are committed to reducing the impact of this tragedy.

On a more personal level, we enjoyed this missive from John Pandol:

Produce Emergency Response

Since word of the Chilean earthquake hit Saturday, we’ve dialed more than our share of international calls. We worked the list of every cell phone and land line until we finally got through to a sister-in-law. One goes down a check list of priorities: Is everyone OK? How’s your house. What are you doing? What’s going on in the country? Do you need anything?

Back in the office we started the commercial version of the same list. Is everyone OK? How are your office, packing shed and cold storages? Are your people showing up to work? What’s the update on trucks, highways and ports? What is your estimate for the rest of the season?

Under regular conditions we in the produce trade spend a great deal of time separating information from speculation. A natural disaster makes it harder. We’ve received calls from the press and the trade wanting ‘to know’ the situation. We want to be positive and we have reason to be positive.

If confidence is the lifeblood of produce business relationships, we must work especially hard to maintain trade confidence.

Please be patient and flexible. The grapes will come.

There have been questions about how to support the relief effort. It was announced Tuesday that Chilean television personality Don Francisco will be putting on a 24-hour Telethon Friday in Chile. Don Francisco, star of the Sabado Gigantes variety show, has been on TV from Chile and later from Miami for 50 years. He is part Ed Sullivan, part Bob Barker and part Oprah. His Telethon, modeled after Jerry Lewis’ Telethon, has been a major source of charity for years. The Telethon Foundation will be working with the other major Chilean social welfare charities, like Hogar de Cristo, Techo para Chile and Caritas Chile. And the Chilean Red Cross will supply the boots on the ground to get aid to where it is needed most.

We think the low casualties in Chile offer a great lesson on how to address societal problems. The lesson is simple: If you have money, then you can act in such a way that you mitigate the damages caused by various problems.

In other words, the whole strategy of looking to prevent global warming, even if man-made global warming is true, may be counter-productive. If we do what will make society most wealthy, we will have more resources to deal with whatever problems are speculated to arise. If we impoverish ourselves to reduce global warming, then we may be powerless in the face of climate change.

This is not really an original thought. We dealt with it here, when we ran a piece about Bjorn Lomborg’s book, “Cool It: The Skeptical Environmentalist’s Guide to Global Warming”. The author had insisted on doing an interview with The New York Times on Water Street, which is now not near the water because New York has had the wealth to physically expand the island of Manhattan over time.

Perhaps the best article on the whole Chilean earthquake was a piece written by Bret Stephens in The Wall Street Journal, titled, How Milton Friedman Saved Chile:

Milton Friedman has been dead for more than three years. But his spirit was surely hovering protectively over Chile in the early morning hours of Saturday. Thanks largely to him, the country has endured a tragedy that elsewhere would have been an apocalypse.

Earthquake magnitudes are measured on a logarithmic scale. The earthquake that hit Northridge in 1994 measured 6.7 on the Richter scale. But its seismic-energy yield was only half that of the 7.0 quake that hit Haiti in January, which was the equivalent of 2,000 Hiroshima-sized bombs exploding all at once.

By contrast, Saturday’s earthquake in Chile measured 8.8. That’s nearly 500 times more powerful than Haiti’s, or about one million Hiroshimas. Yet Chile’s reported death toll — 711 as of this writing — was a tiny fraction of the 230,000 believed to have perished in Haiti.

It’s not by chance that Chileans were living in houses of brick — and Haitians in houses of straw — when the wolf arrived to try to blow them down. In 1973, the year the proto-Chavista government of Salvador Allende was overthrown by Gen. Augusto Pinochet, Chile was an economic shambles. Inflation topped out at an annual rate of 1000%, foreign-currency reserves were totally depleted, and per capita GDP was roughly that of Peru and well below Argentina’s.

What Chile did have was intellectual capital, thanks to an exchange program between its Catholic University and the economics department of the University of Chicago, then Friedman’s academic home. Even before the 1973 coup, several of Chile’s “Chicago Boys” had drafted a set of policy proposals which amounted to an off-the-shelf recipe for economic liberalization: sharp reductions to government spending and the money supply; privatization of state-owned companies; the elimination of obstacles to free enterprise and foreign investment, and so on.

In left-wing mythology — notably Naomi Klein’s tedious 2007 screed “The Shock Doctrine” — the Chicago Boys weren’t just strange bedfellows to Pinochet’s dictatorship. They were complicit in its crimes. “If the pure Chicago economic theory can be carried out in Chile only at the price of repression, should its authors feel some responsibility?” wrote New York Times columnist Anthony Lewis in October 1975. In fact, Pinochet had been mostly indifferent to the Chicago Boys’ advice until the continuing economic crisis forced him to look for some policy alternatives. In March 1975, he had a 45-minute meeting with Friedman and asked him to write a letter proposing some remedies. Friedman responded a month later with an eight-point proposal that largely mirrored the themes of the Chicago Boys.

For his trouble, Friedman would spend the rest of his life being defamed as an accomplice to evil: at his Nobel Prize ceremony the following year, he was met by protests and hecklers. Friedman himself couldn’t decide whether to be amused or annoyed by the obloquies; he later wryly noted that he had given communist dictatorships the same advice he gave Pinochet, without raising leftist hackles.

As for Chile, Pinochet appointed a succession of Chicago Boys to senior economic posts. By 1990, the year he ceded power, per capita GDP had risen by 40% (in 2005 dollars) even as Peru and Argentina stagnated. Pinochet’s democratic successors — all of them nominally left-of-center — only deepened the liberalization drive. Result: Chileans have become South America’s richest people. They have the continent’s lowest level of corruption, the lowest infant-mortality rate, and the lowest number of people living below the poverty line.

Chile also has some of the world’s strictest building codes. That makes sense for a country that straddles two massive tectonic plates. But having codes is one thing, enforcing them is another. The quality and consistency of enforcement is typically correlated to the wealth of nations. The poorer the country, the likelier people are to scrimp on rebar, or use poor quality concrete, or lie about compliance. In the Sichuan earthquake of 2008, thousands of children were buried under schools also built according to code.

In “The Shock Doctrine,” Ms. Klein titles one of her sub-chapters “The Myth of the Chilean Miracle.” In her reading, the only thing Friedman and the Chicago Boys accomplished was to “hoover wealth up to the top and shock much of the middle class out of existence.” Actual Chileans of all classes — living in the aftermath of an actual shock — may take a different view of Friedman, who helped give them the wherewithal first to survive the quake, and now to build their lives anew.

There are many places you can donate to send help to Chile, and with a blow like this, helping a friend recover is just good manners. But, thankfully, the Chileans will recover with or without charity. That is a testament to a People and a nation, and in that is a lesson for us all.




Stemilt And Dovex Join Forces

Big news in the Pacific Northwest:

Stemilt boosts role as tree fruit leader by joining forces with Dovex

WENATCHEE, Wash. — An even stronger Stemilt emerges following today’s announcement that it will join forces with Dovex Fruit Company to become the leading tree fruit growing, packing and marketing operation in the nation.

“Stemilt has embarked on a strong pattern of growth over the past decade, and we are excited to continue this growth by bringing Dovex into our operations,” said West Mathison, Stemilt president. “By integrating the strengths of our two companies, we look to continue delivering premium fruits to the marketplace, while extending the programs and services we provide to our valued customers.”

Through the deal, Dovex Marketing and Packing will combine into Stemilt’s operations, and the high-quality fruit that both companies are known for will be marketed under the Stemilt label. The Dovex Export Company will continue to function independently. Stemilt will gain approximately 175,000 bins of fruit storage and a state-of-the-art apple packing facility. The Dovex facility neighbors Stemilt’s primary packing and shipping facility, Olds Station.

“The close proximity of the two packing facilities is expected to drive continuity into Stemilt’s operations,” said West Mathison.

On the farming side, Dovex Orchards will proudly become a grower for Stemilt, adding to the company’s growth in apples, pears, cherries, stone fruit and organics over the past decade. The combination with Dovex strengthens Stemilt’s leadership in Washington-grown conventional and organic apples and pears. Stemilt already enjoys a strong leadership role in cherries, organic stone fruit and Wenatchee River Valley pears with its own manifest and through existing marketing partnerships with Douglas Fruit and Peshastin Hi-Up. In total, Stemilt will have an excess of 17,000 captive acres owned by itself and its marketing partners heading into the 2010 summer and fall harvests.

Additionally, Stemilt is excited to have Jay Fulbright, general manager of Dovex Fruit Company, join its executive team. Mauro Felizia, executive vice president of Dovex Holding Company, will become a new member on Stemilt’s Board of Directors.

“Dovex Fruit Company is excited to join the marketing strengths of Stemilt and leverage the proximity of our facilities,” said Jay Fulbright, general manager at Dovex.

Both Stemilt and Dovex are family-run companies that started decades ago with similar goals centered on providing consumers worldwide with access to a year-round supply of the best fresh fruit available. Stemilt was founded in 1964 by the late Tom Mathison, while the De Nadai family established Dovex in 1982. The De Nadai family has developed fruit operations worldwide for three generations.

“Stemilt and Dovex were founded on similar principles that directly relate to our mission of building consumer demand for tree fruit in order to deliver return to the land,” said West Mathison. “By bringing together the strengths of our organizations, Stemilt will be able to offer the most complete menu of products and services within our industry, providing great solutions for growers and retailers alike.”

This is a big change for the industry and we suspect the last card has not been played. Perhaps ties will develop between Stemilt and the De Nadai’s Unifrutti.

We, of course, wish the folks at both Dovex and Stemilt well.




Big Ramifications For Industry As Florida Tomato Growers Exchange Agrees To Penny-A-Pound Program

We angered many in the Florida tomato industry when back in 2007 we ran a piece titled, Florida Tomato Growers Reject Penny-A-Pound Initiative At The Industry’s Peril.

There were letters such as one we included in a piece titled, Pundit’s Mailbag — Defending The Florida Tomato Industry.

And we certainly tried to point out some of the positive efforts the industry was making, such as in a piece we called, Redlands Christian Migrant Association Is An Organization Worth Replicating Nationwide.

But the move to so-called penny-a-pound programs seemed inexorable to us, as we profiled in a piece named Subway Joins Penny-A-Pound Program While Tomato Growers Feel The Pinch.

The big obstacle to instituting these programs, whereby buyers set aside extra money specifically for growers, was that the Florida Tomato Growers Exchange had instituted a policy prohibiting its members from participating in such programs.

Writing in PRODUCE BUSINESS in a piece titled, Wages And Social Responsibility, we warned the industry that sustainability involved a lot more than environmentalism and that wages and working conditions would be a big battleground. And we concluded our first piece on the penny-a-pound schemes and the resistance in Florida to them with this warning to the broader industry:

It is a truism now that in food safety, the industry will be judged by its weakest link. We should not think that any less so on issues regarding labor relations and social responsibility.

The Florida Tomato Growers Exchange had all kinds of reasons why it couldn’t participate. They claimed anti-trust issues, practical impossibility and on and on. Yet in the end, the newspapers were filled with articles trumpeting a change as in this one, titled Florida Growers Group Changes Stance On Tomato Pickers’ Pay:

In a major reversal, a powerful Florida agricultural group will now let its tomato-grower members distribute to workers extra wages contributed by buyers such as grocers and fast-food companies.

A new social responsibility program will let companies make supplemental payments to workers and establish guidelines for employment practices, said Reggie Brown, vice president of the Florida Tomato Growers Exchange, to which 90 percent of growers in the state’s $400 million tomato industry belong.

Brown said fair wages, and safe working conditions will help improve the lives of farm workers and their families.

For years, the grass roots Coalition of Immokalee Workers has tried to do that by raising pickers’ subpoverty wages — inert for decades — and improve working conditions with its Campaign for Fair Food. The goal is to increase annual earnings from about $10,000 to between $16,000 and $17,000 with a penny-per-pound increase. Major fast-food restaurants such as McDonald’s and other food buyers agreed to the hike, which calls for the companies pay extra for tomatoes harvested under a stricter code of conduct.

The coalition didn’t ask growers to pay workers extra; it asked that they transfer money the companies agreed to pay.

But the growers refused, threatening $100,000 fines for any member who passed along the increase. The group rescinded that policy last year, less than a month after East Coast, Florida’s No. 3 grower, dropped out of the exchange to pay the increase.

Now, the growers are offering their own version of the pass-through and code of conduct.

Brown said the program was crafted with exchange customers such as McDonald’s.

That came as news to McDonald’s spokeswoman Danya Proud, who said the company has and will continue to work with the coalition and to abide by their 2007 agreement.

“McDonald’s is not involved in the Florida Tomato Growers Exchange’s new social responsibility program,” she said.

Brown could not be reached for further comment.

The Florida Tomato Growers Exchange has announced its own Social Accountability Program that includes a Florida Tomato Grower Code of Conduct.

Much of the social accountability program is similar to the pre-existing Socially Accountable Farm Employers, or SAFE program.

Yet neither SAFE nor the new Social Accountability Program are likely to satisfy self-proclaimed advocates for the migrant workers.

Partly this is because the advocates are extreme and disingenuous, doing things like operating a “Florida Modern-Day Slavery Museum” to arouse public anger against the Florida growers, even though no reasonable person could view the state of agricultural employees as even approaching slavery — in fact, most workers have friends and relatives who are working and these friends and relatives have urged their family members and friends to come work in the fields of Florida because it is a far better opportunity than they have back home.

But the grower effort is not likely to gain traction even with more moderate advocates for the workers because it scarcely calls for anything beyond pledging that the growers will obey the law. Over and over again, the Code of Conduct includes reference such as these:

“Each participating grower commits to comply with all applicable laws and regulations governing employment in the jurisdictions in which they operate.”

“Each participating grower is an equal opportunity employer and complies with all relevant nondiscrimination laws and regulations.”

“Participating growers will not use forced labor. Forced labor includes prison labor, indentured labor, or any other activity in which the worker’s freedom is improperly or unlawfully restricted.”

“Participating growers will not use child labor, as defined by the laws and regulations regarding agriculture activities of the jurisdiction in which the work is being performed.”

“Each participating grower commits to pay no less than the established lawful minimum wages to migrant and seasonal agricultural workers. Migrant and seasonal agricultural workers will receive all benefits required by the laws and regulations of the jurisdiction in which the work is being performed.”

“Each participating grower commits to keep and/or maintain payroll records in a complete and accurate manner as required by law.”

“Workers will be trained to ensure safe procedures and proper use of pesticides in the work environment, in accordance with the laws and regulations of the jurisdictions in which the work is performed …”

“Participating growers who own or control housing will ensure that it meets all the applicable health and safety laws and regulations of the jurisdictions in which it is located.”

“Participating growers who provide housing to migrant agricultural workers will provide such individuals with written terms of occupancy as required by applicable federal law.”

Certainly these are all good things, but they simply will not be meaningful to advocates for the workers because all these things are required by law, with or without a code of conduct.

One of the basic premises of sustainability is that it involves going above and beyond the legal requirements.

We wanted to get another perspective and Pundit Investigator and Special Projects Editor Mira Slott spoke to a knowledgeable observer of the industry:

Q: What’s your take on the Florida Tomato Growers Exchange reversing its position with CIW and agreeing to distribute supplemental payments to workers? How will this impact the industry?

A: In a sense, because the tomato growers have held off so long, they’ve done the retailers a favor. They’ve basically been the bad guys, taking the hits for the rest of them. Retailers say they’ll participate in the program, knowing the tomato industry is hesitant.

Now Florida Tomato Growers Exchange is saying any grower can participate if they want to. If that’s the case, retailers targeted by CIW will want to be spared embarrassment. Now the big moment is with Publix being targeted, but CIW wants every retailer possible to do this deal with tomatoes as part of its whole big campaign for fair food.

Q: Do you anticipate retailers will feel the same kind of pressure as major fast food chains to follow suit and begin signing contracts with CIW? Further, why would CIW be satisfied to limit its fight to Florida tomatoes? Couldn’t this signal the start of a domino effect with other commodities to follow?

A: Once CIW gets retailers on board for one product, tomatoes, it will move on to other commodities. Is citrus next, maybe not? Once processed into juice, consumers don’t see it at the grocery store as a Florida orange. It might be challenging for CIW to create a clear messaging campaign to boycott Florida oranges. So, maybe it targets another commodity first. There are lots of question marks, but that’s a CIW dream to have all crops picked by migrant workers included.

Q: The Florida Tomato Commission argued relentlessly against the Penney a Pound scheme for so long, claiming anti-trust conflicts and impossible logistics in distributing the additional wages. Does the CIW view the change in policy as a major coup?

A: In certain respects, the Florida tomato growers look even worse now by reversing their stance and agreeing to CIW’s demands, because it puts into question the validity of all their original arguments. Still, in the tomato case, CIW feels it’s only half a victory; it wants input in code of conduct with the industry. This action by the Florida Tomato Growers does set a precedent, a nasty precedent regarding CIW eventually moving to another commodity.

Q: What does this mean from the supermarket chain’s perspective?

A: If you’re a supermarket executive, it’s a terrible precedent that an activist group is dictating to you which growers you have to buy from. You have to buy tomatoes from certain growers. You’re losing power, giving an activist group the authority to tell you how to buy.

Q: Are there legal issues involved here?

A: What’s interesting in this case… clearly CIW learned the mistakes of United Farm Workers Union with Cesar Chavez when it boycotted grapes and targeted the strawberry industry in California, wanting to organize farm workers into a union.

The government has specific laws to deal with organizing unions. It would be interesting to get reaction from Western Growers Association and big time ag labor relations attorneys. What is the impact of CIW’s actions and how could that affect farmers in California and elsewhere? Because CIW is not a union, does this mean any charity or activist group can dictate the rules? This is a dangerous precedent, no question about it.

Q: How did the industry allow the situation to spiral out of control like this? Doesn’t the industry have the power and wherewithal to counter actions of a relatively small, albeit effective, activist group?

A: The tomato guys have been warning the rest of the industry this day would come. No one listened, no one rallied on their behalf. The industry will have a million task forces on food safety and traceability. Yet PMA and United say they can’t touch labor, claiming anti-trust laws.

How do you know who CIW will target next? The contracts that organizations signed with CIW are private, no one knows what’s in them, but up until now those monies were put in escrow accounts. Now that money must be distributed.

Q: What about the long-standing contention of Florida Tomato Growers Exchange that there is no logistically plausible way to insure the money is distributed to the right people?

A: There is no way to fairly distribute that money. How do you know which worker picked tomatoes for McDonald’s or Burger King, and is now picking tomatoes for some small supermarket in New Jersey? The whole thing is a mess.

First CIW went after the fast food chains; now Whole Foods is on board. CIW feels like if it gets Publix, then it’s just a matter of time till Kroger and Wal-Mart cave. In December, CIW orchestrated a blitz of supermarket protests, which included Kroger and Wal-Mart. Once it gets one of the more mainstream supermarkets, the rest fall.

Q: Do you think produce industry executives just assumed the problems would remain isolated to Florida tomato growers? Perhaps they stayed silent for fear of being associated with the controversy, clouded by scathing accusations of slavery, or that speaking out would just aggravate the situation and generate more negative publicity… I imagine some anticipated the activist group would eventually fade away, rather than building more and more clout over the last decade? What happens now?

A: The moral of this story is you have to defeat a group like this early on. The industry should have been going after CIW 10 years ago. It started with Taco Bell, when four Immokalee guys went on a hunger fast; Jimmy Carter was involved.

During that period, the industry should have come out with the big guns and attacked this program. Once Taco Bell caved in, CIW started getting more publicity, and then it got McDonald’s.

Q: Is there a way to slow down the momentum? What proactive steps can the industry take at this point? How can it learn from this phenomenon moving forward to stave off a firestorm?

A: CIW can still go after tomatoes for a while with supermarket chains, and put new focus on the code of conduct part. CIW needs to get Safeway, Kroger and Wal-Mart, and then it can start lining up other commodities. Now it’s a supermarket headache. The industry put their heads in the sand, the damage has been done, and now there is no turning back.

The anti-trust issues never really made much sense and the logistics of distributing the money have been solved this way:

The growers argued for years, including at congressional hearings, that a third party couldn’t legally dictate the terms of its workers’ employment. They threatened fines against any members who participated. And they complained there was no way to track who picks tomatoes that ultimately end up on a Burger King Whopper or a Subway sandwich.

Now, the growers finally came up with another solution. Each restaurant or retail chain will decide on a weekly “supplemental wage” payment to be made to the grower based on the amount of Florida tomatoes it purchased. The payment will also include an additional 15 percent for administrative, insurance and payroll tax expenses.

The growers will divide the total money among the migrant workers on the payroll that week, giving each one a pro rata share based on the amount of hours worked. The program goes into effect immediately.

“This program doesn’t have any connection to who picked what,” Brown said. “If a customer chooses to enhance the income of my workers, we’re willing to pass those dollars along. This is a way that it can be done fairly and simply.”

The growers have also agreed to regular audits to ensure that the amount of tomatoes purchased and the supplemental wages are accurately reported and allocated to workers.

We are actually not certain this solution will be fully acceptable to the buying end of the business. Chains like Whole Foods don’t just want to increase tomato pickers’ wages on average; they want their own customers to know that if you purchase tomatoes at their store, the workers who picked those tomatoes were paid a premium.

We have little sympathy for CIW, which is basically trying to establish a union through subterfuge, without a Union vote. But we also think that the whole industry is not paying enough attention to this issue and to the general area of the social pillar of sustainability.

The folks at CIW may be unfair and attempting to seize leadership of the workers without a vote, but the leaders at CIW are shrewd and have set an example that will, without a doubt, ultimately reverberate throughout the industry.

CIW executives realized that produce growers, mostly without consumer brands, are simply not subject to much pressure. But most buyers, especially large chain restaurants and retailers, are very susceptible to pressure. These organizations have enormous reputational risk at stake in all their activities, and they spend very little money on tomatoes or any produce item compared to their total operating cost.

So it doesn’t take too many protests or too many TV reports for these chains to fold and say they will gladly pay extra if CIW will call off the protestors and stop the news reports associating the chain with abusing workers.

And it won’t stop with Florida tomatoes. It won’t stop with tomatoes and it doesn’t matter if CIW spreads or not. The pattern has been set: Find examples of egregious activity, no matter how atypical, associate it not with perpetrators or even the growers who might work with a perpetrator — instead the evil is associated with a brand name retail or restaurant chain that has a lot to lose from being associated with nefarious activity and almost nothing to gain from less expensive farm labor on a particular crop. Watch the brand names cave.

The really sad thing about this is it is not at all clear that the effort, even if successful, will help the intended beneficiaries. Part of this is because CIW has focused solely on Florida, whereas pay scales and conditions in countries that compete with Florida are far worse. By raising the cost of Florida product, CIW actually is encouraging buyers to buy from other areas. This seems unlikely to help the workers in Florida. .

Long term, increases in the cost of labor lead to mechanization and the use of varieties and horticultural practices designed to minimize the use of labor. That may be good if labor prices rise because of supply and demand — but if the world is filled with people thrilled to work at current wages, then how does setting an artificially high wage, which then leads to eliminating their jobs, help them?

Unfortunately, the industry has not engaged in this debate publically. The trade has wanted to believe that sustainability is mostly about environmentalism, but this has left the trade powerless to rebut Wal-Mart’s sustainability efforts — see related articles, Wal-Mart Must Include Adequate Return On Capital In Its Sustainability ‘Index’ Or It Will Do More Harm Than Good and Dangers And Broader Implications Of Wal-Mart’s Sustainability Index — which ignore the economic sphere and has left the industry defenseless against CIW because the trade, anxious to avoid the controversy over wages and benefits, has ignored the social sphere.

Now is the moment for a more sophisticated position, encompassing all three pillars of sustainability. Such an undertaking is the only way to effectively deal with the labor attacks that will be coming the industry’s way in the years to come.




Efforts To Minimize Food Safety And Sustainability Conflicts Laudable But Don’t Resolve Conflict

One of the biggest battles that produce growers have had to deal with is how to wrestle with the competing values of food safety and environmental concerns. Actually it is more than just competing values; it is competing and often contradictory instructions from multiple buyers and multiple governmental agencies.

Now comes word that there has been an effort to resolve this dilemma:

Report finds that Co-management approach on farmland
is optimal path to ensure safe produce and ecological health

The Nature Conservancy recently produced Safe and Sustainable, a report for Georgetown’s University’s Produce Safety Project, which was developed with support from more than 35 expert advisors representing many facets of the agricultural industry — from small and mid-scale growers to shippers and buyers — as well as government agencies, environmental non-profits, the legal world and academia.

The report sheds light on the causes and consequences of food safety practices in California’s Central:

• What’s happening on farms today

• What’s driving these changes

• And, the best path forward

Farmers and landowners in California’s Central Coast are recognized leaders in natural resource conservation efforts. However, new food safety requirements are putting enormous pressure on some growers to reverse more than 20 years of resource conservation investments. Yet, throughout the development of the report, growers stated their continued commitment to produce safe food, their desire to be excellent stewards of natural resources, and their belief that they can do both well — if food safety programs allow them to effectively integrate resource conservation practices.

“Our goal in preparing Safe and Sustainable was simple: to bring the best available information — and the right mix of people — together to address critical challenges to protecting our food supply and the environment.” said Christina Fischer, Monterey Project Director for The Nature Conservancy in California. “Producing safe and nutritious fruits and vegetables is essential for public health. So too are grower’s efforts to safeguard natural resources such as clean water, clean air, and healthy ecosystems. Success means that growers have what they need to do both well.”

The Report is titled Safe and Sustainable: Co-Managing For Food Safety And Ecological Health in California’s Central Coast Region. The forward explains the effort:

The goal of writing Safe and Sustainable was simple: to bring the best available information — and the right mix of people — together to address critical challenges associated with protecting our food supply and the environment. In researching and writing this report, one thing became clear: we must pursue both food safety and environmental goals in tandem. Producing safe and nutritious fruits and vegetables is a critical component of public health. So too are growers’ efforts to safeguard natural resources such as clean water, clean air, and healthy ecosystems.

Throughout the development of this report, produce growers have resoundingly stated their commitment to produce safe food, their desire to be excellent stewards of natural resources, and their belief that they can do both well — but only if food safety programs effectively integrate resource conservation goals. Today, growers overwhelmingly report being pressured by what appear to be conflicting demands. However, as detailed in this report, we believe “comanaging” for food safety and ecological health is not only possible, but in fact represents the optimal path forward.

We owe it to growers and consumers to work together to provide a framework that makes this a reality. This joint effort has resulted in a long and thorough process. More than 35 expert advisors contributed directly to the drafting of this report, representing many facets of the agricultural industry — from small and mid-scale growers to shippers and buyers — as well as government agencies, environmental non-profits, the legal world, academia, and other related organizations and interests. The research and writing process built extensive networks of cooperation and learning to produce this in-depth report. The project was further advised by top scientific experts in the fields of microbiology, wildlife biology and veterinary science who are engaged in groundbreaking work to define sources of contamination in fresh produce, as well as processes of contamination.

We encourage policy makers and industry leaders at every level to read Safe and Sustainable and consider its findings. From legislative offices to corporate boardrooms, it is essential to pay close attention to the research and “on-the-ground” realities represented here. The decisions we make now regarding managing food safety and our natural resources may impact our nation’s health and prosperity for generations to come.

Sincerely,

Timothy York
President
Markon Cooperative

Christina Fischer
Project Director
The Nature Conservancy

Gail Raabe
Agricultural Commissioner
San Mateo County

The overall conclusion of the report:

Growers report yielding to tremendous pressure from auditors, inspectors, and other food safety professionals to change on-farm management practices in ways that not only generate uncertain food safety benefits, but also create serious environmental consequences. Many growers and a wide consortium of regional experts believe that “co-management” for food safety and environmental protection represents the optimal path forward, albeit one that faces several key obstacles.

The report itself speaks more about co-management:

Co-management has been defined in this report as an approach to minimize microbiological hazards associated with food production while simultaneously conserving soil, water, air, wildlife, and other natural resources. It is based on the premise that farmers want to produce safe food, desire to be good land stewards, and can do both while still remaining economically viable. Many Central Coast stakeholders are currently working towards co-management but it is not yet a mainstream approach, and they face many challenges from the various food safety programs they often must accommodate to sell their produce. Success in instituting a co-management approach will require those involved in both food safety and ecological health management to increase awareness of each others’ concerns and to adjust standards and guidelines accordingly.

The report notes several food safety issues that may impact the success of co-management. These issues remain the primary areas of concern expressed by stakeholders involved in the co-management process and addressing them may be critical if significant progress is to occur. Focused discussion with a wide range of stakeholders undertaken as part of this case study indicates concern about the role of liability, private corporate food safety standards, potential implications of national food safety standards, value-added processed produce, and insufficient scientific information.

Many of these challenges remain controversial and unresolved, and recommending solutions to them lies beyond the scope or intent of this report. Nevertheless, it is critical to understand stakeholder concerns in order to move forward with co-management efforts. These same issues are also important to consider for development and implementation of food safety programs to be applied in other regions or nationally.

This is all very similar to the work that the California Roundtable on Agriculture and the Environment has done. In December of 2009, the group published Guiding Principles for National Food Safety Programs for Produce. Tim York of Markon and Chris Fischer of the Nature’s Conservancy were both involved in that project as well. In correspondence sent to the Pundit, Tim York described the effort this way:

The CRAE group is a broad group of multiple stakeholders in diverse sectors of California agriculture. Several of us that are involved in CRAE — Chris and Chris’ boss (TNC), Hank Giclas, myself, also were involved in the development of this new “Safe and Sustainable” report.

The CRAE information is a good example of how different folks, different ideas/agendas (can you really picture WGA and Nature Conservancy and National Resources Defense Council agreeing on anything?), can indeed find common ground (tell that to the Republicans and Democrats).

The CRAE effort came to a consensus because it avoided the typical approach of the environmental advocates, which is all too often, to get the EPA to hold some hearing at which growers are dragged up and put in impossible positions.

It also succeeded because the environmental advocates were, for the moment, happy to see some “progress” being made. Its framework has been useful as the FDA got exposed to some of these ideas during its listening sessions on the proposed National Leafy Greens Marketing Agreement.

The CRAE Principles are strong and will certainly win much support:

Guiding Principles for National Food Safety Programs for Produce

December 2009 — Protecting public health by ensuring the best available food safety practices is important to everyone — produce growers, processors, retailers, the regulatory and environmental communities, consumer advocates, and the general public. The e coli outbreaks in Fall 2006 highlighted a clear need for improved food handling practices for leafy green vegetables.

Various responses, including industry-led Leafy Green Marketing Agreements, numerous individual corporate food safety programs, newly introduced state and federal legislation, and intensive new monitoring and research are underway. These efforts reflect the priority the agricultural industry and society as a whole place on acting quickly to address this critical issue. However, some of these efforts could prove counter-productive if they are not science-based, transparent, focused on the highest risk factors, integrated with other public health and safety programs — and ultimately effective.

At the farm-level in particular, addressing food safety and resource conservation concerns in a coordinated manner is essential to ensuring a safe, affordable, and sustainable US-grown food supply. In support of this goal, the members of the California Roundtable on Agriculture and Environment recommend that current and future efforts to improve food safety be consistent with the basic principles described below in order to enhance the nation’s safe and reliable food supply while protecting other social values. These principles are equally relevant to industry-led, legislative and governmental agency efforts, and are intended to provide guidance both to existing and newly emerging food safety programs and requirements.

10 PRINCIPLES FOR SAFE AND SUSTAINABLE PRODUCE

1. Science-based metrics: To ensure that food safety requirements effectively address actual sources of pathogenic risk, to prevent accidental incorporation of counterproductive measures, and to avoid unintended consequences to public health and safety such as impacts to water or air quality, food safety programs and requirements must be subject to rigorous review by agricultural and regulatory experts as well as experts in environmental sciences and natural resource conservation.

2. Adaptability: Substantial scientific gaps remain regarding the processes by which produce contamination may occur throughout the supply chain. Food safety programs and requirements must include robust processes for timely review and 2/3 incorporation of new science and data as it becomes available, to ensure that the best available science is applied to risk reduction activities.

3. Transparency and participation: Food safety programs and requirements should be developed, updated and maintained through a transparent and participatory process, including the early and full participation of appropriate stakeholders, such as producers, scientists, conservationists, agencies, consumers, etc., to ensure that programs are science-based, focused on known risks, and compatible with other public health and safety efforts. Whenever possible, food safety programs should actively address barriers to cooperation among scientists, agencies, growers, produce industry representatives along the supply chain, auditors, resource conservation organizations, insurance companies, and others.

4. Comanagement of food safety and environmental goals: Given the close association between ecological health and the health and safety of human communities, it is critical that both food safety and natural resource protection activities on and near farm fields be considered together. Food safety programs should be developed in a manner that considers and minimizes impacts to ecological health, and resource conservation measures should be carefully calibrated to minimize any increase in risk of pathogenic contamination of harvested crops. This concept of ‘comanagement’ for food safety and ecological health is essential to the long-term sustainability of both agriculture and ecosystem services critical to human communities, and should be incorporated into any food safety program and/or legislation.

5. Risk-based approach: Different crops, regions, levels of processing, methods of consumption (e.g. cooked versus raw) and/or seasons of production may have inherently different levels of risk for pathogenic contamination and/or human health impacts. These varying levels of risk must be better understood and incorporated into food safety programs in order to ensure effective risk reduction and to avoid unnecessary costs and impacts. Efforts to enhance food safety should concentrate on appropriate points of risk along the whole supply chain, from ‘farm to fork,’ similar to Hazards Analysis and Critical Control Points (HACCP) procedures in other industries.

6. Accessibility for all producers: The nation’s agricultural production includes tremendous diversity of scales of production, farm typologies, harvest methods, and marketing mechanisms. Food safety programs should incorporate flexibility to ensure sustainable implementation by all producers. In particular, the needs and limitations of small- and mid-scale farms and diversified farms must be taken into account.

7. Efficiency and harmonization with existing requirements: Producers report widespread concerns regarding multiple, conflicting criteria between various food safety programs and requirements, as well as conflicts between food safety and natural resource protection goals and obligations. Food safety programs should 3/3 work to harmonize with one another, as should auditing efforts. Furthermore, measures should be aligned with existing standards for production, such as organic standards, and natural resource protection such as soil, air and water resources critical for longterm agricultural sustainability. Likewise, natural resource conservation programs and activities should be designed and implemented in a manner consistent with best practices for onfarm food safety.

8. Clarity and specificity: Standards must be clearly worded and reasonably specific, in an effort to minimize subjective interpretation by auditors, producers and others, that may unduly increase costs and undermine ecological health. Including precise and explicit definitions of standards, as well as appropriate training for auditors and others engaged in program implementation as described below, are essential to avoid ambiguity and the potential for misinterpretation.

9. Education: Food safety programs should have high-quality complementary mandatory educational or certification programs targeted toward auditors and other program implementers, which aim to build consistency and accuracy in audit efforts and also help growers understand and comply with standards. Such efforts should also integrate training in resource conservation practices to ensure that environmental goals are not undermined. Likewise, natural resource conservation professionals, consumers and supply chain partners should be provided with opportunities to understand and incorporate food safety concerns.

10. Technical assistance and programs: To the extent practicable, all food safety programs should incorporate the availability of technical assistance to ensure that the full spectrum of operation types have the training and resources necessary to effectively implement requirements.

We have nothing but praise for people who do the hard work of trying to solve industry problems, and the conflict between environmentalism and food safety is a real problem.

Alas, having read the results of all these efforts, we confess that we think they fall short.

They may be useful on the margins… urging people, for example, when they have differences to look to science to justify their actions. Unfortunately, the real difficulties arise precisely when the science is unclear or nonexistent or when the science is clear but values are in conflict.

We can say that if there is a riparian area near a field, that rather than stripping it clean to clear out any critters around, we should look to science to see if there is any known benefit to clearing those areas.

But the science is not clear, the studies are few and, inevitably people have to make decisions with imperfect information. Most of our efforts to deal with food safety issues are like this — estimations made to improve our odds of not having an outbreak.

Even if we had perfect information, though, it would not often lead to some kind of value-free answer.

Suppose we found that by clearing all riparian areas, we could reduce the number of deaths due to food safety problems in the next 20 years by two people.

To some the answer would be clear: Start clearing the areas. Human life is precious and if we can avoid the loss of a single human life, we ought to do it.

Yet, to others, the answer would be the opposite, and equally clear. Don’t clear the areas. Two people over 20 years? Horrid to be sure, but you don’t deprive millions of animals of habitat for such a small benefit.

And this dispute wouldn’t change much if the numbers changed, because there are real differences in values, and these approaches, well meaning as they may be, won’t change that.

There also are differences in interests. Although buyers may care about the environment, the farms are far away, and someone getting ill as a result of a purchase in their store or restaurant is a completely different level of concern. Most buyers will be absolutists on food safety, happy to demand fences or buffer zones or traps as long as there is any possibility it would help prevent a death in food purchased from their store or restaurant.

Co-management is a lovely idea and, sometimes, it can even work. But to a certain extent, co-management is not so much a solution to the conflict between food safety standards and environmental protection as it is a way of assuming away the conflict. Read again the definition used in the report:

Co-management has been defined in this report as an approach to minimize microbiological hazards associated with food production while simultaneously conserving soil, water, air, wildlife, and other natural resources. It is based on the premise that farmers want to produce safe food, desire to be good land stewards, and can do both while still remaining economically viable.

That premise reminds one of the poignant closing line of Ernest Hemingway’s The Sun Also Rises. Spoken while inside a taxi, Lady Brett Ashley laments what could have been… or what she wants to believe could have been… and the war-wounded and impotent Jake Barnes gives the subtle goodbye to a relationship that could never have been more than a beautiful dream:

“Oh, Jake,” Brett said, “we could have had such a damned good time together.”
Ahead was a mounted policeman in khaki directing traffic. He raised his baton. The car slowed suddenly pressing Brett against me.
Yes,” I said. “Isn’t it pretty to think so?”




How Will Success Be Measured For
Fresh For Ellen Social Media Campaign?

We’ve heard from Dan’l Mackey Almy many times here at the Pundit. We’ve sometimes included these communications in pieces such as these:

Perishable Thoughts — Hope Obama Helps Country ‘Arise’

Pundit’s Mailbag — Profitable Participation

So it was, of course, a pleasure that our piece, Plea For Ellen DeGeneres To Consider Produce In Her Sugar-Free Diet, brought a response from the “ring leader” of the effort:

Thank you so much for including the Fresh for Ellen efforts in your recent edition of the Perishable Pundit. We are blown away by the willingness of everyone to see this effort for what it is… a grass roots effort to promote fresh produce in a unique way utilizing a VERY small budget. We indeed hope this spurs many other efforts from our industry to connect with consumers directly and to share our MANY wonderful stories and fresh products.

I was a bit bummed your team hadn’t heard of our success prior to your release on Friday so that you could accurately report our progress. We tweeted and posted on Facebook all day Wednesday and released a special edition of The Core on Thursday sharing what Ellen said on Wednesday’s The Ellen DeGeneres show, “I love my oranges and Florida citrus.” She also posted a video earlier in the week speaking about sugar snap peas being a healthy sugar. Coincidence or not, the fresh produce industry is realizing a big win in the fact that a megastar is promoting our products to a worldwide audience.

The overwhelming support that we have received from the industry and consumers alike in just two short weeks is promising. The Fresh for Ellen community is growing strong with fans, followers and donation/sharing recipients getting on board daily. As if it couldn’t get any more exciting, we have upped the ante. Our new goal: 100,000 lbs to be donated/shared/gifted by March 31, 2010. Details are on the website www.freshforellen.com. In 45 days… who knows what good things will result from this effort.

So, regardless if we think vegan is good, no sugars, some sugars… whatever, we are reaching consumers with our fresh story. Ellen is an amazing, positive figure to MANY people and has a tremendous amount of fans. Turns out, many of them happen to love fresh produce and want to engage with the people growing and supplying it across the country (Interesting, huh?!).

Jim, I feel you have somewhat missed the essence of the “gold” here in your post… we don’t need 30 million dollars to make a difference. We just need to market and reach consumers differently than we have in the past if we are expecting different results. This is just one of thousands of ways to do it. We are committed to the effort!

Thank you again for the mention and I hope your future posts on our efforts are more reflective of the potential of grass roots marketing efforts for our space.

— Dan’l Mackey Almy
President and Managing Partner
DMA Solutions, Inc.
Dallas, Texas

That Dan’l is seeking to advance the interests of the trade is not in doubt, nor is the fact that Ellen DeGeneres is very popular. Certainly only good things can come about by fresh produce companies giving charity in the form of fresh fruits and vegetables, as did Duda Farm Fresh Foods and its citrus grower Peace River Packing when they donated 2169 pounds of fresh Florida citrus to the RCMA Child Development Center in Bowling Green, Florida. We’ve previously written about the wonderful work of the Redlands Christian Migrant Association and you can read the piece here.

You can read a press release about Duda’s donation here. You can see a video describing the donation and featuring Sam Jones, Operations Manager, Duda Farm Fresh Foods, right here:

Other donations include 800 pounds of fresh jalapenos given to the Open Door Fellowship by Frontera Produce, 1,200 pounds of citrus fruit donated by Coast Produce Company to the Orange County Food Bank and Del Monte Fresh donated 2,020 pounds of lemons, bell peppers, tomatoes, grapes and bananas to the North Texas Food Bank

We are, of course, glad that Ellen mentioned her love for some fresh produce items. If we had known about it, we would have mentioned it. However, we are not certain it had anything to do with this effort as we have been monitoring Ellen’s “video diary” of her sugar-free journey and she hadn’t included it. She also didn’t claim the prize — which was the right to donate the produce to an organization of her choice.

Which is not to say she won’t. Dan’l was smart to start this effort because if you don’t try things you never know what could have happened.

Though, working with celebrities can be problematic… In fact, we are sort of wondering how deep Ellen’s commitment actually is to the whole sugar-free effort. Her video diary hasn’t been updated in two weeks as of this writing.

We did raise a concern about the scientific basis for what Ellen was saying. Although there are those who will say that any publicity is good publicity; in the long run we think that produce industry doesn’t want to associate itself with quackery.

We have a good story to tell and it has nothing to do with Ellen’s opinions that consuming agave nectar in her coffee offers some great benefit over sugar. We should tell the truth and align ourselves with good nutritional science. That is why we urged Dan’l, if she gets an invite on the show, to bring along Dr. Elizabeth Pivonka of the Produce for Better Health Foundation. Elizabeth is both a registered dietician and holds a doctorate in food and nutrition science. She also, and much to her credit, has never gone beyond the current state of knowledge in claiming benefits that fresh produce offers.

Ellen has indicated that she wants to bring someone knowledgeable about nutrition on her show. Why shouldn’t it be Dr. Pivonka? Rather than turning a blind eye to Ellen’s lack of nutritional knowledge, we should show our support of her quest for better health and try to help her address that quest in a scientific way. In doing so, we may actually persuade Ellen that the industry has value to contribute to her audience and thus get us a spot on her show. She is not hostile to science. As all visitors to EPCOT know, she is quite friendly with Bill Nye the Science Guy.

Attacking “processed sugars” or “refined sugars” without explanation shows ignorance of chemistry. The advice of the American Dietetic Association is to avoid “added sugars.” In other words, Ellen should put neither sugar nor agave nectar in her coffee.

The argument for fresh produce consumption over added sugar is really two-fold: 1) All the other things in a piece of fruit, things such as fiber, make it unlikely that one will consume as many calories as one can by pouring sugar in coffee, and 2) The produce typically has other nutrients that contribute toward a healthy diet; sugar has nothing of the sort.

It is not a dissimilar argument to why weaning children from apple juice to apples is a step toward a healthy diet.

This all being said, it is important to note that a calorie is a calorie and in a world where obesity is the problem, the produce industry has to promote the consumption of Duda’s celery, Frontera’s hot peppers and Del Monte’s diversified vegetables as well as fresh fruit.

Dan’l ‘s enthusiasm for social media is contagious and, indeed, it is exciting to launch a Twitter channel or a Facebook page and see the followers and the friends and the fans all sign up. Dan’l’s reference to not needing $30 million to make a difference is a reference to the ill-fated generic promotion proposal, which was designed to raise $30 million for generic promotion.

We certainly believe in using social media to the max and an impression is an impression — but as to whether it can take the place of expensive mass media, we are going to wait awhile and file it under the category we call “Interesting, if true.”

To what degree the social interactions on Facebook actually are capable of moving the needle on consumption is completely unknown. Perhaps fans of such sites are already heavy consumers and we are preaching to the converted or, perhaps, the interaction is so slight and infrequent, it can’t change behavior. We just don’t know. The developers of the generic promotion program posited that social media, combined with traditional media, could have a powerful impact, indeed that it could reduce the cost of such campaigns. That seems to make sense — but there is precious little evidence to prove it.

Which is why we need pioneers like Dan’l, to boldly go where no produce man (or woman!) has gone before. Pioneers take some arrows, but they also lead us to new lands.

We hope Dan’l takes us to a fruitful one.

Many thanks to Dan’l Mackay Almy of DMA Solutions for helping us to discuss such forward-thinking issues.




Another Chapter Closes For The Nolan’s And Ocean Spray While A Scholarship Fund Opens Doors For Others

We have extensively chronicled the legal dispute, the issues of business ethics at stake and the moral courage shown by Jim and Theresa Nolan, as they and their company, The Nolan Network, sought justice in the courts in their dispute with Ocean Spray.

Pundit sister publication, PRODUCE BUSINESS, stood up in this matter with two seminal pieces both written by industry veteran Bill Martin:

Ocean Spray Sued By Longtime Associates

Are Any Lessons Learned From Ocean Spray Trial?

After a defeat in the courts, Ocean Spray decided it wanted to settle and a settlement was reached. Bill Martin tells the tale:

Settlement Ends Long Legal Battle
Between Jim and Theresa Nolan And Ocean Spray

Scholarship in Jim Nolan’s Name is Planned

Jim Nolan was always for openness and fairness in his business dealings, and on several occasions Ocean Spray Cranberries Inc. grew tired of Jim airing his concerns over possible violations of anti-trust violations as he refused to sign confidentiality agreements with his former employer. Thus, what would Jim, who died of heart disease two years ago come March 2nd, think of his wife, Theresa Nolan, who has “mutually resolved the lawsuit with the dismissal of all appeals from the judgment” and would have no comment as to any questions regarding a settlement?

The agreement finally ended a legal battle involving Jim and Theresa and their sales and marketing company, The Nolan Network, and the huge fruit cooperative based in Middleboro, Massachusetts..

“Jim would be happy he was vindicated by the decisions of the jury and judge at the end of the trial and that those rulings still stand,” said Theresa on February 26, eight days after a settlement was formally reached between the parties.

Theresa is referring to a jury, where on May 29, 2009 at least 11 of the 13 members in Superior Court, Plymouth, Massachusetts, found Ocean Spray liable for unfair and deceptive business practices. The Nolan Network lost most of its business subsequent to the fallout of events leading up to the Nolan’s filing the civil suit. Following the decision, Theresa was awarded over $2.8 million in damages, legal fees and interest in the case.

At the heart of the matter were the Nolan’s concerns of the cooperative issuing a set price for fruit before the fresh cranberry season started, but later offering cheaper fruit and special deals on transportation costs to some competitors over others. These anti-trust issues reared their ugly head throughout last year’s trial, although they were never addressed in the court’s final ruling. At the center of the allegations were Ocean Spray’s James Lesser, who has since left the organization, as well as Richard O’Brien, who worked directly with Jim Nolan and The Nolan Network.

This case had to be costing Ocean Spray a proverbial arm and a leg in more ways than one. Goodwill and trust must have been jeopardized with customers, such as Sam’s Club and BJ’s, which found out the co-op was giving better deals to Costco. Ocean Spray’s litigation costs had to be hefty. Add to this, the Superior Court ruled Ocean Spray must pay interest and legal fees while both sides went through the appeals process. We could be talking millions.

In an e-mail to Ocean Spray, comment was sought to whether the co-op had taken steps to correct its unfair and deceptive business practices, and does it acknowledge any wrong-doing in this case? After many days, we finally received a brief statement from John Isaf of Weber Shandwick, a public relations firm Ocean Spray has retained:

Ocean Spray and Nolan Network, Inc. have mutually resolved all litigation matters with the dismissal of all appeals from the judgment. The settlement is not an admission of liability of any kind by any party.

We will not provide any further comment on any additional details of the settlement.

In a sense, there are no winners in a tragic story such as this. Jim Nolan in essence was a whistle-blower who decided long ago it would be worth the stress, and ultimately losing his health and life, to protect the interests of Ocean Spray customers and its growers. He put a career’s worth of goodwill, trust and integrity on the line fighting for Theresa, The Nolan Network and himself.

Although Jim is gone, he will not be forgotten. “I am establishing a charitable trust to fund a scholarship in Jim’s name so this experience will have a lasting meaning that benefits others,” Theresa says. “I want my dearest industry friends to know their love and support sustained me through Jim’s death and our legal battle, and I am deeply grateful.”

Nobody can blame Theresa for finally settling. Continuing to fight is expensive, emotionally draining and, whatever the righteousness of one’s cause, risky because judges and juries are not completely predictable.

There comes a time in most battles when it is better to declare victory and go on with one’s life than to allow one’s life to be consumed by the battle. This was that moment for Theresa, and we have no doubt Jim would have endorsed her decision to settle.

It is not clear that Ocean Spray’s travails are over. We raised the question here as to whether Ocean Spray violated PACA regulations and, if so, there may be actions yet to come.

What Ocean Spray has also not disclosed is what price it has paid to settle the matter with its various customers. It is simply inconceivable that Sam’ Club wouldn’t demand that it be given the same prices, retroactively, that Costco got — in accordance with the Robinson–Patman Act. Wal-Mart, Safeway and other retailers that competed with HEB surely demanded the same recompense — at a minimum. More likely these retailers also demanded compensation for the loss of business, profit and brand value that came from their being uncompetitive on cranberries due to Ocean Spray’s pricing concessions to Costco and HEB. This would be many millions of dollars.

For the industry at large, the case has raised many important ethical issues from the value of truth-telling — does one acquire legal and ethical obligations when one issues a price list — to what is a reasonable expectation of an employee. Can one expect an employee to lie? To remain silent in the face of a lie by management? And finally there’s the simple question of how to treat people. For many, the most horrid part of the story is the whiff that certain people really wanted to destroy the Nolan’s, personally and professionally, when they could not control them.

There was one wonderful thing that came out of this… individuals in the industry, some with plenty to lose, stood up for what they thought was right, and stood up for their friends. That is what Theresa is talking about when she speaks of “love and support” that sustained her.

The scholarship in Jim’s name will continue to give a gift, but Theresa, a paragon of patience, and Jim, a man who simply knew no other way than to proceed with what he believed in, have given us all a shining example of living a life of unwavering moral standards and fighting the good fight with grace under pressure. Theresa’s thanks are kind but, in truth, we owe the Nolans more than they owe us.

With best wishes for Theresa in the days… and decades… to come.




Hope To See You At United Fresh/Cornell Executive Development Program

Are you busy March 14th through the 19th? If you can spare a little time, there is no more productive use of that time than to head off to Ithaca, New York, and attend The United Fresh Produce Executive Development Program.

Developed in partnership with Cornell University, this is an incredible program, in which the freedom to think is nurtured by a few days on Cornell’s beautiful campus. The bonding with your classmates occurs in the fire of intellectual ferment as ideas are discussed and debated among a student body that knows an awful lot more than it did when you went to school.

There are some industry stars… this year Bruce Peterson and Steve Grinstead… but mostly the program is taught by an interdisciplinary team of ace Cornell professors, hand-selected by Ed McLaughlin, the Robert G. Tobin Professor of Marketing and Director, Undergraduate Business Program, and the dean of academics with an ear on the marketing end of the produce industry.

Now here is the thing: Unless someone drops out, there is exactly one chair left in the class of 2010 — and if you can, and you’re smart, you’ll put your name on it.

You can see some of the topics to be covered this year here.

Download a brochure here

Get general information here.

Find registration info here

And actually register here.

Oh, by the way, we’ll see you there. Since the founding of the program, we’ve been honored with an opportunity to serve on the faculty and present the “hot topic” of the year, which animates much of the other work done during the program.

In the inaugural year of the program, we focused on food safety; then we did sustainability before sustainability was cool; as the recession hit, we showed the strategic implications of a new “Age of Expediency” in the industry, and this year, well, we never reveal the topic until we actually present it in Ithaca.

So if you want to know, you better act fast — remember, unless someone cancels, there is only room for ONE more. Will that one be you?

You should try to make it so.




Ahead Of The (New York) Times

Back when chemicals were the big food safety issue, Pundit sister publication, PRODUCE BUSINESS, ran a cover story on the issue, it wasn’t five months later that Time Magazine ran a similar story with a very similar cover. We did a little self-promotion with an ad that pointed out the value we delivered:

Click on Image to see full size ad

Well, 22 years later we are happy to report we haven’t lost our touch. For example, you could have read The New York Times of February 27, 2010, and found an article titled Decision Could Allow Anonymous Political Contributions By Business. The piece contains these lines:

The Supreme Court decision last month allowing corporations to spend unlimited money on behalf of political candidates left a loophole that campaign finance lawyers say could allow companies to pay for extensive political advertising while avoiding the disclosure requirements the court appeared to leave intact.

Experts say the ruling, along with a pair of earlier Supreme Court cases, makes it possible for corporations and unions to donate anonymously to nonprofit civic leagues and trade associations. The groups can then use the money to finance the types of political advertisements that were at the heart of last month’s ruling, in Citizens United v. Federal Election Commission.

Or, you could have read the Perishable Pundit a month earlier when we wrote a piece titled, Supreme Court Ruling May Push Political Donations Toward Trade Associations, where we explained the impact of the Supreme Court ruling:

“…corporations desiring to engage in political speech will often elect to do so through a trade association, because trade associations would not have to disclose precisely who is paying for the advocacy.”

Used to be we were just “Ahead of Time.” Now we are “Ahead of the Times” — and the subscription rate is pretty good too!

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