Rain Ends Curbs on Flow of Orange Crop

Thanks to persistent rain that has held up harvesting in much of California’s citrus belt, growers now can ship--without the usual quotas--as many fresh navel oranges as they wish.

Normally, quotas are not lifted until 80% of a crop has moved to market. This year, however, the so-called pro-rate was removed with the harvest only 58% complete. It was the second-earliest lifting of restrictions in the history of the federal marketing order that authorizes quotas, which dates back to the Great Depression.

The rationale underlying quotas is to provide orderly marketing of the perishable fruit, which can be “stored” for some weeks on the tree but quickly deteriorates after picking. Quotas seek to avoid gluts and shortages--and accompanying price swings--while prolonging the availability of the fruit on the market.

Former Agriculture Secretary John R. Block touched off a furor among growers and shippers last year when he ended pro-rate for the rest of the season in early February, citing higher-than-normal prices and freezes in Florida and Texas. Advocates and opponents of the quota system since have debated the wisdom of Block’s move, the debate hinging on whether regulating the flow of fresh fruit would have resulted in higher prices over a longer season:

- Opponents, maintaining that growers received record returns by having more fresh fruit reach the market under “free market” conditions, urged scrapping the quota system.

- Advocates countered that the move cost growers at least $10 million without reducing retail prices paid by consumers.

Weather Conditions Cited by Committee

The Navel Orange Administrative Committee, which administers the quotas, eventually concluded that the theoretical loss to growers was probably closer to $20 million, based on historical comparison of price levels in the second half of the season.

The committee--whose members are elected by growers and packers with approval of the secretary of agriculture--cited weather conditions as its reason for lifting shipping restrictions. It made clear, however, that it will continue to monitor the flow of fruit weekly and could reimpose quotas should a glut develop that could send prices tumbling and lead to shortages before the new Valencia crop begins arriving in markets beyond the present trickle from Arizona and Southland orchards.

But, with about two-thirds of the crop likely to be shipped by the committee’s next meeting today, the prospect of reimposing pro-rate grows increasingly unlikely.

Marketing of the present crop got off to a noisy start last November, after Block rejected the committee’s first weekly recommendation that pro-rate be imposed. After a meeting between the committee and Block’s aides, however, quotas were allowed to take effect the following week and have remained in place since.

The committee has been under pressure by the Agriculture Department to become more flexible in its use of quotas, and a department spokesman hailed the decision to lift pro-rate as indicative of a new attitude.