Op-Ed
Free Market vs. Volume Regulation
Who will make this decision?
By Doanne Andresen
2/24/01 - We have a surplus. What should
the industry do? Are you involved in the decision-making process?
1. We can choose to do nothing and let
the free market forces solve the problem. Businesses will go under.
Both large and small, growers and handlers, will be at risk. I have
heard estimates that 30%-40% of the growers may not survive. But the
theory is that it will be a fair fight. Smaller, more flexible
businesses may be able to out-maneuver larger businesses. Businesses
with more capital may outlast businesses with less capital. Vultures
will buy-up the scraps in the end and new businesses will emerge.
2. We can enact a volume control
regulation through the Cranberry Marketing Order. This regulation can
work for or against the grower. The intent of the Order is to help
stabilize the price and return profitability to the grower. But
because the surplus is so large it is necessary to implement a large
restriction to return the price to above cost of production. A small
restriction will only get rid of part of the surplus. The surplus may
continue every year and be used as a weapon to protect market share.
The price of berries will be the weapon. And growers may continue to
receive below cost of production to help their handler protect market
share.
3. The goal of the marketing order is
to stabilize the price and return profitability to the grower. To
protect handler market share is not the goal. But in truth, it may
be impacted. The handlers continue to express their concern that they
will be supplied with enough berries to protect their market share.
Three years ago, some handlers asked
growers to release them from an $80 contract so that they wouldn’t
lose market share. The concern expressed was that if your handler went
out of business, you wouldn’t be able to sell your berries. Growers
were not told that the handlers would then proceed to drop the price to
below cost of production to protect their market share. Now you aren’t
selling your berries. You are giving them away.
Again, growers are being asked to make a
choice. If you want the price to stabilize, then I believe that we need
to get rid of the surplus. If we get rid of the surplus, you may be
concerned that your handler will lose market share.
This is a difficult choice. But it should
be your choice. You need to be involved in making this choice. It will
impact your future.
If you have not returned the survey to
CCCGA or WCCGA, return it quickly.
If you have not called your CMC
representative, call him.
If you would like to contact the USDA,
use the address below.
Mr. Robert Keeney
USDA-AMS
2400 Independence Avenue, SW
Room 2077, South Building
Washington, DC 20250
Phone 202-720-4722
Fax 202-720-0016
e-mail: [email protected]
Home |