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Pundit’s Mailbag — What Is The Best Model For Industry Lobbying Efforts?

Our piece, COOL Compromise Shows Association Leadership But Battle Scars Remain, brought this well-informed comment from an important industry leader:

I appreciate reading your thoughtful analysis of the COOL issue and its related impacts on the working relationships among United, PMA, and Western Growers.

I disagree with your apparent thinking that the new WGA office in Washington, D.C. is a problem. Other grower/shipper-based produce organizations already have policy offices in Washington, D.C. — USApple and the National Potato Council, to name two.

While United does a good job of balancing interests from grower to retailer, at times an undiluted message needs to be delivered by growers and shippers. In my experience, it is often the case that an issue, such as a foreign pest invasion or a specific produce grade standard, might only be of real interest to a given commodity or region. In these cases, if you are to gain the attention of federal policymakers, you need to be front and center where the decisions are being made.

Retailers have tremendous market power. They have many ways to influence federal policy, such as through other associations like FMI or by directly influencing their suppliers. And it is no surprise that the retailer point of view is occasionally at odds with that of the grower/shippers.

Whatever the outcome of any merger talks between PMA and United, I think the grower/shipper groups will want to continue to have their strongly-held positions given voice in Washington, D.C. Many times this should and will be through United, our industry’s broad-based national association. But other times, a separate path will need to be followed.

Christian Schlect
Northwest Horticultural Council
Yakima, Washington

Chris is among the most thoughtful leaders in the trade, and we value his opinion. Our sense, as we expressed in our first piece on the opening of a Western Growers Association office in D.C., is that there could be a positive angle to this:

On the bright side, another hand on deck fighting for produce industry interests in D.C. could be helpful, and Matt McInerney, WGA Executive Vice President, who is temporarily heading the office while it staffs up, is universally liked and respected.

Yet we were concerned that in launching its D.C. office, WGA did not, in fact, identify any issues that it wanted addressed that United was not working. Here is what WGA said:

“Western Growers believes that it can best serve its members by having a full time Washington, D.C. presence to lobby on federal issues like the 2007 Farm Bill, immigration reform, specialty crop competitiveness and food safety.”

To us that list of interests was indistinguishable from United’s priorities. In that, we felt the industry might find a problem:

The problem is that opening an office is a large expense, and an association needs to justify this kind of expense to its board and membership. Putting another guy on the produce industry team seems an insufficient justification for such a large and continuing expense. Most boards would insist on hearing of key points of differentiation between what this office will do and what is already being done before approving it.

And the differentiation has to continue to provide a continuing justification for the expense. If the WGA Washington office simply agrees with everything that United does and helps United execute its government relations strategy, what kind of justification is that for a D.C. office, which will probably cost well in excess of ten million dollars over the next 20 years?

Unfortunately, the justification is likely to come about by finding a reason to disagree with United. The temptation will be to paint the picture that the WGA is the guardian of grower interests and that United, with its broader membership base, can’t be counted on to defend grower interests.

To provide a continuing justification for the expense of maintaining this office, the inclination will be to find points of differentiation between WGA and United, rather than points of unity.

This could lead to a more divided industry presence in Washington.

It is also true that WGA did not explore the kinds of things that one would think they might explore if this was a purely friendly act — there was no discussion of co-locating offices, subletting space or sharing support staff to reduce industry costs.

We appreciate Chris pointing out that some commodity-specific groups have D.C. offices. Though these offices may help out on some general issues, such as immigration, they typically are, well, commodity-specific and so don’t deal with the general issues that United or a geographically based association, representing producers of many products, such as WGA, would be likely to deal with.

Although regions certainly can have specific interests, the very size of WGA argues against the possibility that United would neglect its interests. If the Vermont produce growers wanted to get some D.C. representation, it would make some sense… How responsive can United be to such a tiny and atypical segment of the national grower community?

But be unresponsive to the produce growers and packers of California and Arizona? That seems highly unlikely. This is the main source of financial support for United.

Of course, the real split may not be between production agriculture and retail but between growers and their own packers, shippers and processors. It is notable that WGA has not moved to take the California Marketing Agreement — which is an agreement among handlers, not growers — to a mandatory grower marketing order. WGA executives have said they cannot do so, because the growers would vote it down.

When United’s board voted for a national mandatory food safety program, which was later clarified in a joint release with PMA to be FDA-based, United had a lot of grower/shipper/packers in the room but no pure growers in the room.

So, perhaps, one could argue that WGA is going to take up this cudgel.

And, in fact, WGA is pushing for a USDA-based food safety solution, not an FDA based solution.

Completely aside from the substance, though, this is our basic point. If we want the industry to be strong, we need to try to resolve these issues “within the family” so to speak and come up with a “united” position. If on Monday the WGA is visiting a Congressional staffer telling him or her the produce industry wants A and on Tuesday United visits and tells the same staffer no, what the industry really wants is B, the most likely outcome is the staffer will see division in the produce industry and some non-produce interest will be more influential and more likely to prevail.

Much depends, of course, on how WGA handles the situation. Will it go to its membership and recommend that they belong to United as well? Will it whisper to key members that their investment in government affairs is best spent through WGA? It is on matters such as this that the true meaning of the WGA office will come to be seen.

WGA is fond of promoting the fact that California and Arizona grow nearly one-half of the nation’s produce. United’s ability to retain the loyal membership — and the membership dues — of this sector of the industry is thus absolutely vital to United’s long-term success. Put another way, the problem is not WGA’s D.C. office, per se — the problem will be whether A) WGA feels the need to differentiate its efforts from United and that differentiation makes its members not want to support United, or B) WGA’s members get tired of supporting multiple Washington offices and just take the position that they have WGA for representation, PMA for marketing — and that is enough.

The issue Chris raises of the need for an undiluted grower message does raise the question of whether a vertically oriented trade association, such as United, is the right kind of organization to do lobbying.

One could make a case that there is simply no “united” produce position on anything beyond a vague desire to “increase consumption” — that U.S. growers have different interests from retailers or for that matter from wholesalers or foreigners and that whatever the virtues of United’s many programs, when it comes to lobbying, we might be better off with different horizontal associations.

FMI, the supermarket industry association, is an independent association, and the Grocery Manufacturers Association/Food Products Association is an independent association. No pretense is made that the “grocery” industry always has a “united” position. The two associations still cooperate when appropriate and work independently when that makes sense.

If the goal is undiluted grower input on the Washington scene, is a vertical association the tool likely to deliver?

Can WGA’s new Washington office be seen as a nucleus of a new grower-centric lobbying organization? Is it possible, or desirable, to refocus United’s ambitions on strictly lobbying?

It is clear that growers need representation in D.C., but what form should that representation take and how should it be paid for is an important issue on the table in the PMA/United discussions.

Many thanks to Chris for his thought provoking letter.

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