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16 CapitalPress.com November 3, 2017 Simplot loses dispute with farmer Judge awards ownership to Frank Tiegs By MATEUSZ PERKOWSKI Capital Press Northwest farmer Frank Tiegs has prevailed against the J.R. Simplot Co. in a legal dispute over the ownership of a Washington food processing company. The relationship between Tiegs and Simplot, who once held equal ownership of Pas- co Processing, turned acrimo- nious last year over the need to inject money into the com- pany. Tiegs wanted each own- er to contribute $3 million to Pasco Processing to resolve a loan default but Simplot didn’t agree to the cash in- fusion. The National Frozen Foods Corp. in Albany, Ore., is wholly owned by Pasco Processing. The conflict prompted Tiegs to invoke a contract provision allowing him to buy the company if the two partners deadlocked on a key decision. Citing contract terms, Tiegs claimed he wasn’t forced to pay anything for Pasco Processing due to its poor financial performance. Both partners eventually filed lawsuits against each Tree fruit trade group combination awaits federal review By DAN WHEAT Capital Press YAKIMA, Wash. — Two Northwest tree fruit trade organizations are awaiting review by the U.S. depart- ments of Commerce and Jus- tice before proceeding with plans to combine operations. Northwest Fruit Ex- porters plans to become a dues-paying member of the Northwest Horticultur- al Council and contract its staffing and management with NHC. Both are based in Yakima. The effort has been un- derway for more than a year and was expected to be com- pleted this fall. NFE sought Department of Commerce approval to retain its Export Trade Certificate of Review, which allows it to receive shipment volumes and tim- ing information of cherry ex- ports to Japan to coordinate efficient Japanese inspec- tions. In July, the Commerce Department notified NFE the request will also be reviewed by the Justice Department, said Mark Powers, NHC president. “We were hoping that wouldn’t be necessary but now it’s taking longer,” he said, adding he likely won’t know more until the end of the year. The two nonprofit trade corporations plan to con- tinue operating as sepa- rate legal entities so NFE can keep its Export Trade Certificate of Review and continue to be funded by grower assessments. NHC is funded by the Columbia Gorge Fruit Growers, Idaho Apple Commission, Oregon Sweet Cherry Commission, Washington Apple Commis- sion, Washington State Fruit Commission and Wash- ington State Tree Fruit Association. The in- tent of the Mark restructuring Powers is staffing efficiencies and speaking with one voice on foreign market issues, Powers has said. Some NFE board members opposed the plan, saying they saw no need. NFE will operate under the policy of its board but be managed by NHC. NFE will appoint two trustees to NHC’s nine-member board. NFE will simplify its gov- ernance structure, no longer seeking nominations for board members from other industry organizations and eliminating apple-pear and cherry commodity commit- tee governing boards. NHC was incorporat- ed in 1947 and focuses on national and international policy issues affecting tree fruit growers and shippers in Washington, Oregon and Idaho. NFE was formed in 1978 to manage export market preparation procedures for fresh sweet cherries to Ja- pan. In 1992, its role was ex- panded to include export of apples to Mexico, China and Japan. In March 2014, at the initiative of the Apple Com- mission, apple market ac- cess regarding China, Japan, Vietnam, India, Australia, South Africa, Egypt and Israel were switched from NFE to NHC. NFE continued handling apple market access to Mex- ico and protocols or work plans for the export of apples to foreign countries. Mateusz Perkowski/Capital Press File The National Frozen Foods facility in Albany, Ore., is part of Pasco Processing, of which farmer Frank Tiegs has won full ownership in a legal dispute with the J.R. Simplot Co. other, with Tiegs seeking a declaration that he owned the company and Simplot accus- ing him of deliberately mis- Barriers high, but dairies hopeful By DON JENKINS Capital Press A Washington dairy indus- try official said Tuesday that he hopes an upcoming state report will rekindle interest in rewarding farmers who take extra steps to protect water quality. Dairy Federation policy director Jay Gordon said wa- ter-quality trading, in which farmers earn and then sell pollution-reduction credits to downstream industries and sewer plants, could help busi- nesses, cities, fish and farms. “I’m tickled to death we’re having this discussion,” he said. “It has so much potential promise. That’s why it’s an idea that hasn’t died.” The Washington State Conservation Commission is circulating a draft of the report, which names basins where water-quality trading might work best, but also highlights obstacles to such a program. The underlying idea is that it’s cheaper to reduce pollu- tion by managing the land “The court concludes that in this case if a conflict looks, walks, and talks like a deadlock, it is a deadlock,” Peterson said. Before Tiegs could buy Pasco Processing, the con- tract did require him to reach a five-year deal for supply- ing Simplot with vegetables, the judge said. However, Simplot effec- tively waived this require- ment when it refused to ne- gotiate the supply agreement with Tiegs, according to the ruling. Similarly, Simplot dis- regarded contract terms by refusing to participate in me- diation scheduled by Tiegs, Peterson said. Fruit industry keeps eye peeled on NAFTA By DAN WHEAT Capital Press YAKIMA, Wash. — Washington state exports close to $500 million worth of apples, pears and cherries annually to Mexico and Cana- da and anything that impedes that is a very big concern, says Mark Powers, president of the Northwest Horticultural Council in Yakima. Powers is the Northwest tree fruit industry’s point per- son on North American Free Trade Agreement renegotia- tions. He’s attended the third and fourth rounds and soon will go to the fifth round in Mexico. “If something changes that affects our ability to send the volume or affects our profit- ability, that has serious im- pacts to our economy and growers here in Washington,” Powers said. “Any changes that make our exports more difficult, we oppose.” The greatest worry so far for tree fruit and some other agricultural commodities is the U.S. Trade Representa- tive’s stated objective of “a separate domestic industry provision for perishable and seasonal products.” That objective has been set at the behest of Florida tomato growers — and supported by some berry, melon and pepper producers — who say Flori- da tomato growers have been going out of business because Mexico sells tomatoes in the U.S. at artificially low prices. The issue comes down to fundamental fairness says the Florida Fruit and V,egetable Association. Under current rules, U.S. producers can only bring an anti-dumping violation case against Mexican or Canadian imports if they represent 51 percent of their industry and can show a year-long impact of imports, Powers said. Definitions of season- al and perishable come into play and changes that would Water-quality trading surfaces in Washington than updating technology to treat effluent. The Environ- mental Protection Agency and USDA embrace the concept, and so does the Washing- ton Department of Ecology. Trades, however, depend on matching facilities that need help to comply with discharge permits with reliable land projects. “So far, we haven’t found that situation where every- thing aligns,” Ecology special assistant on water quality Kel- ly Susewind said. The obstacles cited in the report include the fact that Washington’s pollution-con- trol law already bars farmers from releasing anything that tends to cause pollution into the water . Bruce Wishart, a lobby- ist for environmental groups, said it may be hard for con- servation groups to support water-quality trading for that reason. “Really, technically, there’s nothing farmers can trade,” he said. “This is a very significant difference between Washington state and some of the other states where wa- ter-trading schemes have been put in place.” Gordon agreed that recon- managing the firm. U.S. District Judge Rosanna Malouf Peterson has now sided with Tiegs, finding that he was allowed to take complete ownership of Pasco Processing due to the deadlock with Simplot. The judge ruled against Simplot’s argument that she consider additional evidence regarding Tiegs’ credibility, finding it was irrelevant to deciding the contract dis- pute. While it’s “uncontested” that Tiegs tried to follow dis- pute resolution procedures, “Simplot refused to partici- pate,” which resulted in the deadlock, she said. Simplot’s claims that Tiegs tried to “manufacture” a “sham” deadlock are im- material in terms of the con- tract, the judge said. ciling a program and the state pollution-control law “would be the big challenge,” but said that water-quality trading could encourage farmers to take extraordinary measures, such as planting trees to shade streams or using new technol- ogy to extract phosphorous from manure. Ecology outlined in 2010 how a program could work, particularly to reduce phos- phorous, nitrogen and sed- iment. “We think there is room there,” Susewind said. “The bottom line is, if the water is cleaner, we’re all happy.” Ecology must concur with the conservation commis- sion’s final report. Susewind said the department is review- ing the draft. The report’s lead author, the conservation commis- sion’s habitat coordinator, Brian Cochrane, said the draft was “a conversation starter.” “It was my hope to identify some of the barriers and focus our efforts on going forward,” he said. According to the report, water-quality trading would work best in places where the supply and demand for credits were roughly equal. Dan Wheat/Capital Press The Northwest Horticultural Council is concerned about protecting tree fruit exports as it assists in new NAFTA negotiations. allow regional dumping claims could be used against Northwest tree fruit or other U.S. commodities by grower groups in Mexico and Cana- da, he said. “It’s an import-export is- sue. Those who don’t export are trying to protect them- selves in U.S. markets and U.S. producers who do ex- port are trying to make sure that whatever is done doesn’t hurt our exports,” Powers said. There’s a lot of concern across the U.S. heartland as corn and meat are the main exports to Mexico, he said. Mexico has slapped tariffs on U.S. apples several times for alleged dumping since NAFTA was implemented in 1994. The last one involved temporary tariffs that were lifted in June of 2016. Mex- ico determined Washington apples did not damage the Mexican apple industry. That outcome was partly due to goodwill between the two nations as politically the Mexican government moved against its own growers, Pow- ers said. There has been hope in the Washington tree fruit industry that renegotiating NAFTA could lessen the abili- ty of Mexico to instigate more dumping cases. Powers said he’s working to ensure duty-free access for tree fruit into Canada and Mexico is not jeopardized, that fruit can be shipped through borders easily and that phytosanitary rules re- main to protect against any “pest or disease attack on our plant resources.” Powers is on the U.S. Trade Representative’s Agricultural Technical Advisory Commit- tee on Trade for Fruits and Vegetables. It’s one of several advisory committees whose members have security clear- ance to talk to and be briefed by negotiators. Idaho quinoa buyer to expand production By JOHN O’CONNELL Capital Press IDAHO FALLS, Idaho — A local quinoa supplier plans to significantly expand his contracted acreage of the nutritious, gluten-free grain next season, and to start com- mercial planting of a quinoa variety he bred himself. This season, Jeremiah Clark worked with 27 grow- ers who raised 1,600 acres of quinoa, which he cleaned and packaged at his facility. “I see that (acreage) prob- ably tripling next year,” said Clark, who believes there’s sufficient interest from his current grower base to handle the quinoa production expan- sion. Clark said his quinoa de- mand far surpassed produc- tion this season, but contracts weren’t finalized in time to get the extra acres planted. “This year, we’ll know by the end of November what we want to do,” Clark said. Clark also plans to look at property this winter for build- ing a bigger cleaning facility, which could be completed in time to process next fall’s har- vest. “We could do two or three times the capacity where John O’Connell/Capital Press File Jeremiah Clark plans to expand contracted production of quinoa in Eastern Idaho. we’re at, but it would be a good challenge,” Clark said. Next season, he’ll also start the first commercial pro- duction of his own variety, Kailey, named for his daugh- ter. Kailey yields better than the two Colorado varieties his growers have been planting, produces 10 percent larger kernels and matures about a month earlier. The early mat- uration should make it easier for growers to plant fall crops after quinoa, reduce the risk of crop damage due to extreme weather and enable growers to be done cutting their quinoa fields by the time potato har- vest starts. Clark said he gave the University of Idaho 100 Kailey seeds, which UI plant- ed in a greenhouse last winter. The greenhouse generated a couple of pounds of seed, which a grower in Oregon planted on 2 acres, providing a seed supply for next sea- son’s commercial production. Clark said about 70 per- cent of his fields produced an adequate crop this season, but two or three fields experi- enced “complete failures” and weren’t harvested. Clark said most of the problems were on dryland farms, where sum- mer rainfall was insufficient. However, he also had a dry- land field in the Ashton area that yielded as well as some of the irrigated fields.