High Level Fraud in the Pecan Industry

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American Pecan growers and pecan shellers speak out about the high-level fraud taking place in the industry, saying it’s time for change.

 The American Pecan industry was rattled this week to learn of deception and fraud taking place in the highest levels of the pecan industry, when learning that Navarro Pecan Company of Corsicana Texas admitted to shipping Mexican pecans in place of American Pecans while the American pecan farmer pays for the marketing.

 To date, American Pecan farmers have paid in roughly 15.6 million dollars to market their American Pecans to consumers both globally and domestically, and so far, it has been money well spent. With the newly formed American Pecan Council the American Pecan farmer has seen great returns on his/her investment. However, some industry players seek to use this newly formed organization to further their own greedy aspirations while, applying downward pressure on raw material prices to the American pecan farmer.

 In an email to the APC staff, Dan Zedan of Navarro Pecan, requested the APC attorneys determine the legal ramifications of Navarro using the new American Pecan logo on product from Mexico. The APC attorneys informed Mr. Zedan that the new American Pecans logo should be reserved for American Pecans only. Mr. Zedan then claims that all US shellers mix their product with Mexican pecans and that almost no one could use the new logo.

 We spoke to several shellers about these claims, the shellers we spoke with said they absolutely do not mix product. Two of the shellers we spoke with said they don’t shell any Mexican product, they said they have plenty of pecans from American pecan producers. The other sheller we spoke with said they do shell Mexican pecans but that they never mix the product as that would be a violation of USDA Country of Origin Labeling Laws (COOL) passed on September 29, 2008. “Most of our customers require American Pecans, we couldn’t do something like that, or we would lose our customer.” Pecan shellers we spoke with were mostly disappointed at the claims made by Mr. Zedan.

 Pecan growers we spoke with felt that this was mostly a violation of their trust, some pecan growers we spoke with were angry, while others were disappointed. When asked, one south Texas pecan grower said, “this is the kind of stuff that’s gotta change”, “we got to stand up against this type of [stuff], it ain’t right for us to pay assessments, and then they buy from Mexico for less money, and tell us they don’t need our pecans…. too many in the market.” “Hell, they don’t even pay a fair wage to Mexican growers either.”

 For now it would seem that the main issue Navarro is dealing with is the violation of USDA COOL laws, however most industry participants we spoke with feel that this comes down to a moral issue. One other aspect to consider is the ramifications to Navarro Pecan’s customers, and on the industry as a whole. Navarro Pecan has, in the past, supplied large pecan buyers in the industry; with their trust violated, the pecan industry has to make sure that Navarro’s former customers will find new, quality pecan suppliers.