November 3, 2017
CapitalPress.com
15
Blackberry competitors
consider joining forces
Farmers,
importers examine
creating national
promotions
checkoff
By MATEUSZ PERKOWSKI
Capital Press
Competing factions within
the blackberry industry may
set their differences aside
to form a national program
aimed at promoting the crop’s
health benefits.
The movement to create
a new research and promo-
tion checkoff overseen by
USDA appears to be gaining
momentum among growers
of fresh market blackberries,
processed blackberries and
imported blackberries.
Blackberry imports are
often blamed for depressing
crop prices for U.S. produc-
ers, who face higher labor
costs than farmers in Mexico
or Chile.
However, imposing a
checkoff fee on imported
blackberries would greatly
increase the amount of money
available to boost the crop’s
prominence among consum-
ers, potentially helping do-
mestic and foreign growers
alike.
“This is not going to re-
solve competition, but it is
going to grow the market and
demand for everybody,” said
Debby Wechsler, executive
secretary of the North Amer-
ican Raspberry & Blackberry
Association.
It’s unclear whether dis-
trust among the various seg-
ments of the blackberry indus-
try will hinder the checkoff
effort, but other industries
— such as blueberries and
avocados — have overcome
their suspicions to form viable
programs, she said.
Don Jenkins/Capital Press File
Workers harvest blackberries July 6 near Ridgefield, Wash. The
blackberry industry is considering the formation of a national
checkoff to raise funds for research and promotion.
“These conflicts are going
to be around, but if there’s
more of a market for every-
body, it will lessen the dif-
ficulty of the competition,”
Wechsler said.
Under the proposal cur-
rently being mulled by the
blackberry industry, fresh
blackberries would be as-
sessed at 1 cent per pound
while processed blackberries
would be assessed at half a
percent of their dollar value.
Fresh blackberry prices
tend to fluctuate frequent-
ly but don’t change as much
year-to-year on average,
which is why the constant 1
cent rate is appropriate.
Processed
blackberry
prices, on the other hand,
can vary widely from year to
year, so assessing them based
on value avoids penalizing
growers during high-volume,
low-margin years.
These assessments would
generate roughly $2 million a
year for research and promo-
tion, with about three-quarters
of that amount coming from
importers.
The Oregon Raspberry
& Blackberry Commission
unanimously voted to support
the creation of the national
checkoff during its most re-
cent meeting.
If the checkoff becomes a
reality, half the money gener-
ated by the ORBC’s 1 percent
assessment fee would go to
the new research and promo-
tion program.
“We would not be assess-
ing our growers any addition-
al money,” said Julie Sche-
deen, a farmer near Boring,
Ore., and a commission mem-
ber.
Conducting a single human
trial as part of a health bene-
fit study can cost $100,000,
which is too expensive for the
ORBC to bear alone, Sche-
deen said.
Combining money on a
national scale would be a
more realistic way to pay
for such studies, which have
been strongly correlated with
growing demand for blueber-
ries, she said.
“That is the genesis of
the effort,” Schedeen said of
health benefit research.
There would likely be re-
strictions on the type of re-
search conducted with nation-
al checkoff dollars.
For example, large private
berry companies don’t want
to fund breeding programs to
create public cultivars, since
they fund their own breeding
efforts, Schedeen said.
For that reason, ORBC
would continue funding pub-
lic breeding, since license
fees for private varieties can
be too steep for some grow-
ers, she said.
Cultivars must also be
adapted to specific growing
conditions, Schedeen said.
“Breeding is very regional.”
If blackberry growers and
importers arrive at a consen-
sus to move forward with the
checkoff concept, they would
need to form a steering com-
mittee that would submit an
application to USDA, said
Darcy Kochis, ORBC’s mar-
keting director.
Provided everything goes
smoothly, an application sub-
mitted next March or April
would allow for a farmer ref-
erendum by August or Sep-
tember, Kochis said.
The referendum could
provide each grower with an
equal vote or their votes could
be weighted based on volume,
she said. A third option would
require a majority of growers
and a majority of blackberry
volume to support the propos-
al.
If the proposal passed, the
checkoff program could be in
place for 2019, applying to
growers who produce at least
30,000 pounds per year.
At this point, there’s no
proposed increase to exist-
ing Oregon assessment rates,
Kochis said.
Darren Sinn, a farmer near
Silverton, Ore., said he favors
the concept because grow-
ers of processed blackberries
would be able to influence the
program.
“We get a seat at the ta-
ble,” Sinn said.
While domestic farmers
may have legitimate concerns
about working closely with
competitors, it makes sense to
cooperate on boosting overall
demand, he said. “We have to
view it as a separate issue, be-
cause we’re going to be compet-
ing with them no matter what.”
Auditor: India promoter overcharged apple, pear groups $720,000
By DAN WHEAT
Capital Press
WENATCHEE, Wash. —
The Washington Apple Com-
mission and The Pear Bureau
Northwest have severed rela-
tions with a promoter in India
after audits found they had
apparently been overcharged
more than $720,000.
The Apple Commission
was overbilled $573,182 for
services — including some
that had not be performed, a
state audit found, and the Pear
Bureau is conducting an audit
and has found discrepancies
of about $150,000, spokes-
woman Kathy Stephenson
said Tuesday.
As a result of the audits,
the Apple Commission, in
Wenatchee, and The Pear Bu-
reau, in Portland, broke ties
with Keith Sunderlal, owner
of SCS Group in New Delhi,
India. Sunderlal said his team
of over 20 professionals has
represented the Apple Com-
mission in India, Bangladesh
and Sri Lanka since 2004 and
helped build India into Wash-
ington’s third largest apple
export market at 4.8 million
boxes of apples annually, be-
hind only Mexico and Cana-
da.
“We categorically deny the
initial conclusions presented
in the state audit report. There
are many complexities in op-
erating a business in India in
Dan Wheat/Capital Press File
Red Delicious apples are packed in a 40-pound box at McDougall & Sons packing plant, East
Wenatchee, Wash., last April. Red Delicious are a prime export variety to India. Auditors have questioned
the bills a contractor in India sent the Washington Apple Commission and The Pear Bureau Northwest.
order to strike a balance be-
tween India’s complex regu-
latory and taxation laws and
the fiduciary interests of our
clients,” Sunderlal said in a
prepared statement.
He said his accountants are
reviewing the matter, that he
hopes to demonstrate no loss
of taxpayer or industry funds
and that he’s confident his
firm will be absolved.
The “potential overbilling”
was made public by a special
investigation by Washington
State Auditor Pat McCarthy.
Her spokeswoman, Kath-
leen Cooper, declined to call
it fraud, saying that implies
criminal conduct and that the
auditor is not a criminal in-
vestigator. She used the term
“questionable costs.”
The auditor’s report called
it “significant discrepancies,”
but Apple Commission Pres-
ident Todd Fryhover alleged
that invoices were falsified
and that he was very sur-
prised. Discrepancies span-
ning five years were uncov-
ered but may go back further,
Fryhover said.
The commission withheld
$505,138 in payments to
SCS and notified the USDA,
which plans to refer the case
to the U.S. Office of Inspec-
tor General for further review,
according to the auditor’s re-
port.
“The Office of the Inspec-
tor General can analyze it
from a criminal perspective,
which we can’t,” Cooper
said.
There’s no evidence the
Apple Commission did any-
thing wrong, Cooper said. It
had controls in place to ensure
accountability of public funds
and has strengthened those
controls at the auditor’s rec-
ommendation, she said.
“We will be doing more
direct payments to vendors,
especially large ones, to pre-
vent this,” the Pear Bureau’s
Stephenson said.
The Apple Commission
spends $7.8 million annually
to promote Washington ap-
ples in 30 foreign markets.
The money includes $4.8 mil-
lion from the federal Market
Access Program and $3 mil-
lion from a 3.5-cent per box
grower assessment on the an-
nual crop.
NAWG president resigns to pursue other opportunities
By MATTHEW WEAVER
Capital Press
The president of the Na-
tional Association of Wheat
Growers has resigned to pur-
sue other opportunities.
David Schemm, of Sha-
ron Springs, Kan., resigned
to pursue “other profession-
al opportunities in his home
state of Kansas,” according to
NAWG press release.
“It was just a great oppor-
tunity that presented itself
there at NAWG, but there
have been some other oppor-
tunities (that) presented them-
selves to me,” David Schemm
told the Capi-
tal Press.
He
de-
clined
to
name those
opportuni-
ties, but said
he expects to
David
make an an-
Schemm
nouncement
in the next few weeks.
“Truly, my passion is to
help wheat farmers and farm-
ers in general,” he said. “I re-
ally enjoy being engaged and
making sure the voice of the
American farmer is heard and
we can help maintain a strong
rural ag economy. The oppor-
tunity that is presenting itself
would help me further along
that passion.”
Schemm plans to continue
to farm “some,” noting his el-
dest son is graduating in the
next year and plans to return
to the family farm. Schemm
farms 16,000 acres.
Schemm said he discussed
the matter with his family,
NAWG CEO Chandler Goule
and the other NAWG officers.
“I felt that up to this
point I had been able to get
NAWG into a position that
it’s a strong organization,
being well-heard, states’
voices were being represent-
ed, the wheat industry was
working wonderfully togeth-
er, coming forward with one
voice,” Schemm said. “We
have already had a tremen-
dous impact on the farm bill
and trying to make sure we
help our wheat growers out
there.”
Schemm’s term was slated
to end in July 2018. Presi-
dents typically serve a one-
year term.
Past president Gordon
Stoner, of Outlook, Mont.,
will assume duties and the
role of the president until the
next officer election at the
2018 Commodity Classic.
Ag groups want Goodlatte bill
to address illegal immigrants
By DAN WHEAT
Capital Press
Several agricultural trade
associations are heartened
that a bill addressing agri-
cultural guestworker issues
is moving in the U.S. House
of Representatives, but they
don’t think it does enough to
retain the current workforce,
much of which is in the U.S.
illegally.
While praising House
Judiciary Committee Chair-
man Robert Goodlatte,
R-Va., for moving his Ag-
ricultural Guestworker Act
out of that committee to the
floor, several issues must be
resolved to ensure the bill
meets the current and future
labor needs of growers, said
Kate Woods, vice president
of the Northwest Horticul-
tural Association in Yakima,
Wash.
The Judiciary Commit-
tee removed protections for
current workers when a new
H-2C-visa replaces the ex-
isting H-2A visa, and those
workers would be required
to return to their home coun-
try to apply for H-2C visas,
Woods said.
That and a cap of 450,000
annual H-2C visas are prob-
lematic, she said.
“During the committee
process several changes
were made that would make
this bill unworkable, partic-
ularly when coupled with
expedited mandatory E-Ver-
ify. We must ensure practi-
cal and reasonable solutions
are achieved for both the
current and future work-
force that American farmers
depend on in order for our
industry to remain competi-
tive,” Tom Nassif, president
and CEO of Western Grow-
ers in Irvine, Calif., said in a
prepared statement.
The Agricultural Work-
force Coalition in Washing-
ton, D.C., issued a statement
saying workable solutions
for current and future work-
force needs must accompany
mandatory E-Verify, which
is the electronic verification
of employment eligibility.
Kerry Scott, program
manager of masLabor, Lov-
ingston, Va., the nation’s
leading supplier of H-2A
and H-2B foreign guest-
workers, said it will be dif-
ficult to get the bill through
the current Congress, which
runs through 2018.
“Right or wrong, there
are enemies on both ex-
tremes and probably not
enough friends in the mid-
dle,” Scott said.
He said he lives in Good-
latte’s district, is an old
friend and that Goodlatte is
well suited for the task by
being a former immigration
attorney and former Agri-
culture Committee chair-
man.
No requirements to
house and transport workers
and a lower required wage
are improvements, although
most employers will like-
ly continue paying more
and furnishing housing and
transportation, Scott said.
The current Adverse Ef-
fect Wage Rate for H-2A
workers requires everyone
be paid a high wage, but
wages should reflect experi-
ence and skill, he said.
The new bill requires
employers pay the greater
of: the state or local mini-
mum wage, 115 percent of
the federal minimum wage
(150 percent for meat or
poultry processing), or the
actual wage paid to others
for the same job.
Having USDA admin-
ister an H-2C program will
be better for employers but
allowing workers to initially
stay for three years is wor-
risome because they may
“lose touch with their fam-
ilies back home and start
making new families here,”
Scott said.
The bill requires workers
to leave the U.S. for 45 days
or for one-twelfth of their
stay.
The cap of 450,000 vi-
sas annually shouldn’t be a
problem because there is a
cap escalator, he said.
Jon DeVaney, president
of the Washington State
Tree Fruit Association in
Yakima, questioned the
need for a cap when the bill
still requires employers to
demonstrate a lack of do-
mestic workers.
Washington flower farm
ordered to pay $2.5 million
Federal appeals
court rules that
foreign judgment
is valid
By MATEUSZ PERKOWSKI
Capital Press
A federal appeals court
has upheld a ruling that or-
dered a Washington flower
farm to pay about $2.5 mil-
lion to a foreign supplier.
For five years, Holland
America Bulb Farms of
Woodland, Wash., bought
flower bulbs from a compa-
ny in the Netherlands, Mid-
brook Flowerbulbs, until
they terminated the arrange-
ment in 1999.
The owner of Holland
America Bulb Farms, Ben-
no Dobbe, suspected that
shipping costs were being
inflated by Midbrook Flow-
erbulbs, which was partly
owned by his brother, Arie
Dobbe.
After the two companies
ended their relationship,
Holland America didn’t pay
for the final year’s delivery
of flower bulbs due to Mid-
brook’s alleged overcharg-
ing.
Midbrook filed a lawsuit
against its former client in
the Netherlands and eventu-
ally won a judgment against
Holland America in 2012
after extensive litigation and
several appeals.
In 2014, that foreign
judgment was recognized
as valid by a federal judge
in Washington, who ordered
Holland America to pay
about 2.2 million euros for
the value of flower bulbs
and multiple years of inter-
est.
At today’s currency
rates, that amount is worth
more than $2.5 million.
Holland America chal-
lenged that ruling before
the 9th U.S. Circuit Court of
Appeals, arguing the foreign
judicial proceedings were
incompatible with U.S. due
process requirements.
In the Netherlands, Mid-
brook was not required to
turn over financial records
that could have supported
Holland America’s accusa-
tions of overcharging, the
company claimed.
The 9th Circuit has now
rejected that argument, rul-
ing the court proceedings in
the Netherlands met the re-
quirement of “fundamental
fairness” under a Washing-
ton statute governing recog-
nition of foreign judgments.
The law considers for-
eign judgments to be valid
even if the other country
has different procedures and
rules for evidence, the 9th
Circuit said.