Debate Grows Over Need for Orange Quotas
In the citrus groves of California and Arizona, the Valencia orange crop is ripening and just beginning to make its way to produce departments in markets across the nation--just as the harvest of navel oranges ends.
And, as it has done almost annually for nearly half a century, the Valencia Orange Administrative Committee voted Tuesday in Lindsay to ask the U.S. Agriculture Department to begin limiting shipments of fresh Valencias from California’s groves to 600 rail cars, effective May 3. (A rail car holds 1,000 40-pound boxes of fruit.)
No quota was placed on shipments from Arizona, where the Valencia harvest is winding down.
The decision, which was expected, seemed all but certain to fuel an already noisy debate among citrus farmers over whether the flow of fresh fruit to market should continue to be regulated week by week as it has been under the Agricultural Marketing Act of 1937.
Last week, a group claiming to represent growers of 75% to 80% of the California-Arizona Valencia production formed Farmers for an Orderly Market, which favors regulating the supply of fresh oranges to market.
Its members include Sherman Oaks-based Sunkist Growers, a cooperative of 6,000 growers in Arizona and California that markets more than 50% of the crop; Cal-Citrus Packing Co.; Coachella Valley Citrus; Exeter Packing Co.; LoBue Bros.; Paramount Citrus Assn.; Paramount Growers, and Suntreat Growers & Shippers.
The new coalition was formed in response to last month’s creation of an anti-order group, Agriculture for Market Oriented Policies, or AgMOP.
“Many growers agree with President Reagan and Agriculture Secretary John R. Block that all marketplaces must be free of unnecessary regulation,” AgMOP member Robert Herrick of Belridge Farms & Packing said at the time.
Other AgMOP members include such major agricultural enterprises as Giumarra Farms, Harris Farms, Riverbend Farms and Minnehoma Land & Farming--a group that Farmers for an Orderly Market branded “a very small group of dissident farmers . . . motivated by narrow, selfish interests.”
AgMOP’s members welcomed Block’s unprecedented mid-harvest lifting of the navel-orange marketing order last January and has vowed to press for an end to all restraints on citrus marketing. Reagan can terminate them, AgMOP maintains, by executive order.
The battle rages over a marketing program that is not imposed by the government but must be invoked by at least 74% of growers voting in a referendum--the last of which produced a 91% majority in favor of the navel order.
The growers pay an assessment to cover costs of administering the program. No government subsidies are involved, but opponents argue that regulating the flow to market boosts retail prices artificially--an assertion that proponents dispute.
“Farming has its peculiarities,” a spokesmen for Farmers for an Orderly Market told press conferences convened in Visalia, Calif., and Washington last week. “It doesn’t work like a factory, where you can produce at will from one week to the next. The issues are complex.”
When Block lifted the navel-orange quotas, growers who had held fruit on the tree for marketing later in the season saw prices drop by more than $2 a carton--or $10 million, said grower Jim Beekman of Lindsay, a member of Farmers for an Orderly Market who sits on both the navel and Valencia committees. “It was just siphoned off somewhere along the line,” Beekman said in an interview. “The growers lost it, but the consumers didn’t see it.”
AgMOP spokesmen dispute that contention, however. They argue that the revenue loss was inflated by basing it on on prices per carton and not on return per acre and that the estimate assumed that prices would remain at the season’s top price from the Jan. 26 lifting of the quota to the harvest’s end.
Without quotas, the advocates contend, citrus supplies would be subject to swings between glut and shortage, with earnings and prices falling and rising accordingly.
Unlike apples, which can be held in storage, they explained, citrus is best “stored” on the trees. Once picked, the fruit’s marketable life shortens drastically, so growers pace their crop, relying on quotas to assure them of an adequate market.
In AgMOP’s view, quotas are relics of the Great Depression that have outlived their usefulness. An unrestricted market would lower retail prices while rewarding efficient growers in a field characterized by thousands of small growers, it says.
Indeed, Sunkist says its grower-members have operations averaging 40 acres. Not surprisingly, therefore, Sunkist and Farmers for an Orderly Market view AgMOP’s argument as a scarcely veiled threat to put thousands of small growers out of business and disrupt the nation’s fresh citrus market--to the benefit of the surviving growers, who could then snap up orange fields at bargain prices.
The Valencia Orange Administrative Committee, five of whose 11 members belong to the Sunkist cooperative in recognition of its 52% share of the market, voted 7 to 4 to recommend volume controls starting May 3. The quotas are set week by week until 85% of the harvest is in, when the marketing order automatically lifts, in an effort to stretch out the supply until navel oranges return in September.
Beekman, who voted for the 600-car quota, said the four who voted against imposing a quota did so only because they had different ideas of how and when a quota should be imposed.
The committee’s concern hinged, he said, on the relatively small size of the oranges harvested so far. As picking gets under way in California, where navel oranges are still on the market, he said, the largest and best Valencias are earmarked for export, mostly to Pacific Rim nations.
The committee is concerned, Beekman said, that if most of the early fruit, which is small and of lesser quality, were to flood the domestic market now, Valencia prices would plummet and never fully recover.
