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Pecan Council Explores Penalties for Non Compliance

This article was updated from its original version on 9-Feb-2023


The American Pecan Council held a meeting Wednesday to discuss various topics about the performance of the marketing being done, the transparency issues in the industry and what to do about companies that don’t pay their assessments. 


Mr. Ott explained that it is believed that the fmo has around 90 or more percent of the market reporting but that a few larger companies and some smaller companies may be skirting around paying their fair share. Mr. Ott also mentioned that some companies have since gone bankrupt and there is now no way of going back and collecting the unpaid assessments. 


The discussion started as a way of imposing penalties and possibly interest on the non payers or late payers of assessments; however Mr. Ott quickly offered a mandatory grades and standards solution that would require more traceability through the supply chain. His arguments did make sense as he referenced other state organizations he worked with in California and their programs. Several board members agreed and said this would likely be a good solution. 


The suggestion was tabled after several board members suggested this would not go over well with growers by forcing mandatory grades and standards at this point. The fmo does have several options available to it but does not yet have the right penalties in place to demand compliance from all participants. 


While yesterday’s meeting was an APC meeting it is worth considering that the APPB assessment is paid directly by the grower, however the APC assessment is paid by the grower to the handler and then is paid to the APC by the handler. 


In the APPB the grower is responsible for the payment to the board however, with the APC the handler is responsible for making the payment to the board. Under the APPB even if the grower pays the assessment to a handler, but the handler fails to pay the assessment to the board, the grower is still held responsible for payment.


The APC may be offering more flexibility and opportunity for non payment by allowing payments to go through handlers. While no solutions were determined as of yesterdays meeting a “working group” has been formed to explore possible solutions to the non-payment issue. 


One of the more encouraging points of the meeting was Mr. Womacks exploration into the effectiveness of the APC’s contractors. Mr. Larry Don suggested that we need to evaluate our current contractors by establishing benchmarks to measure them by. Each contractor of course is different and would need a different set of benchmarks, but the overall idea is something I hope to see more of in our industry. 


We all have the tendency to rest on our laurels and I believe that a robust and regular performance evaluation will help us keep our eye on the ball for the long term as opposed to changing course with each new election because no one knows if and why efforts are working or not. Great suggestion Mr. Larry Don, I hope it gets traction.