Growers Upset Over Ruling on Orange Quotas : USDA Rejected Request to Restrict Shipments

California’s navel orange growers--plagued by weak demand and sagging prices--responded with dismay and uncertainty Thursday after the U.S. Department of Agriculture’s rare rejection of their request to begin restricting the flow of fresh oranges to market this week.

“They (the USDA) have been messing around back there for too long a time,” said Ned Baker, a Visalia orange grower.

“The fruit doesn’t know what’s going on in Washington. It just keeps on ripening.”

The state’s citrus industry--the nation’s largest--is among only a few relatively prosperous segments of the nation’s generally depressed agricultural economy, noted Baker, who chairs the Navel Orange Administrative Committee.

Determines System

The committee, composed of 10 growers and packers and one non-industry member, administers a grower-financed “marketing order” that, among other things, determines the controversial “prorate” quota system. This system regulates how many navel oranges go to market in a given week, with the goal of avoiding feast-and-famine conditions that can send prices on a roller-coaster ride.

“We’re not asking for a subsidy,” Baker said. “All we’re asking for is a continuation of the stability that has built this industry over all these years.”

The department’s rejection of the prorate recommendation, he added, sows further uncertainty among growers, packers and buyers over how and when the new crop will be harvested.

A spokesman for the USDA’s agricultural marketing service said the decision to reject the committee’s recommendation should have come as no surprise.

Joe Gribbin, director of the agency’s fruit and vegetable division, informed the committee less than two weeks ago that Agriculture Secretary John R. Block would not approve the specific issue (the weekly prorate) until he acts on the broader issue (whether prorate should be used at all and, if so, under what conditions).

The indecision, Baker said, upsets marketing plans for packers and buyers alike. “You have to have confidence in what the government’s going to do.”

Normally, the agriculture secretary would have decided the question of overall marketing strategy before the first navels were picked in late October. Now, however, the state’s navel oranges are ripening coincidentally with the end of an unusually long Valencia orange season, pitting the two species in rare competition in retail markets.

The committee’s goal of restricting the flow of fruit, Baker said, is to bring fresh supplies more closely in line with prevailing demand. Supermarkets last week were offering the so-far undersized early navels at prices as low as 11 cents a pound, well below production costs.

The department’s adamant posture at the outset of the new navel season stems in part from Block’s unprecedented order to suspend prorate last Jan. 28, claiming that supplies and prices were adequate. Despite heavy lobbying by the majority of growers and packers, who sought to reimpose weekly quotas, Block refused to let the committee reinstitute prorate.

Block has said that he supports prorate--which is financed and administered by growers under federal legislative authority--as a marketing tool but feels that growers and packers may have become overly dependent on its use.

Department analysts and the committee differ markedly over the economic consequences of last season’s lifting of prorate. The government concludes that the market was largely unaffected and that returns to growers were, if anything, larger than they would have been under prorate.

The growers, in contrast, calculate their losses at up to $18 million. More importantly for the consumer, they say, the losses to the growers did not translate into a corresponding drop in prices at the produce counter.

Block, who was in Rome attending a meeting of the U.N. Food and Agriculture Organization this week, has not finished reviewing the document, an aide said.

Two chief lieutenants will attend the Navel Orange Administrative Committee’s next meeting Tuesday in Los Angeles, when it will again assess market conditions for the coming week.