Dec 27, 2013
Washington tree fruit groups considering merger

Four tree fruit organizations in Washington state are considering merging into one, and officially announced their intentions in December, during the annual meeting of the Washington State Horticultural Association (WSHA).

The merger of WSHA, the Washington Growers Clearing House Association (WGCH), the Yakima Valley Growers-Shippers Association (YVGSA) and the Wenatchee Valley Traffic Association (WVTA) would reflect the increasing consolidation of the state’s tree fruit industry and would hopefully make the services all four groups provide – including lobbying at the state capital, gathering and reporting data and providing education and training programs – more efficient, according to backers of the proposal.

“At the end of the day, the services being provided won’t change,” said Charlie Pomianek, director of WVTA and a member of the task force that’s been studying the proposed merger. “We’ll be doing all the things we’ve been doing.”

Pomianek said that a couple of names for the proposed organization had been thrown around – such as the Washington State Grower-Shipper Association, or the Washington State Tree Fruit Association – but that nothing had been finalized. When it is created, however, the four original groups will most likely cease to exist, he said.

Jon DeVaney, YVGSA’s executive director, said members of the proposed organization could expect to save money by paying a single assessment fee (as opposed to multiple assessments), but that saving money is not what’s driving the process. It’s about eliminating duplication and streamlining services.

Changing industry

A potential merger has been discussed off and on over the last couple of decades, but recent consolidation in Washington’s tree fruit industry has brought the possibility to the forefront. To give an example, Pomianek said WVTA had 45 members two decades ago. Today, there are 22 members – but those 22 are producing more fruit than the 45 did.

Frank Lyall, a grower and member of WGCH, said the state’s tree fruit industry has less than half the growers it did 20 years ago, and has lost a significant amount of its political power.

WSHA, WGCH, YVGSA and WVTA have been formally discussing forming a new entity for about a year. Backers of the proposal said West Mathison, president of Stemilt Growers in Wenatchee, got the discussions started.

The groups formed a task force – including Mathison, Pomianek, DeVaney, WGCH manager Kirk Mayer and WSHA executive director Bruce Grim – to study the merger. According to Mathison, the task force hired a consultant who interviewed growers, politicians and economists involved in the industry. Based on those interviews, the consultant found that the major needs of the industry were for timely and accurate reporting of data, good educational programs (including the annual hort meeting) and strong legislative and regulatory representation.

Perhaps the most important need, however, is for the Washington tree fruit industry to speak with one voice. People outside the industry (and sometimes inside) are often uncertain about which Washington tree fruit group does what. And legislators and regulators often get mixed messages from different industry groups, instead of one consistent message. A fruit organization could solve that – in theory, Mathison said.

“We want to improve the power of our voice. Right now, our voice is disseminated by multiple groups,” Mathison said. “In the regulatory and legislative process, if there’s not extreme clarity then your position is compromised.”

Next steps

Besides making an official announcement about the merger proposal, the task force also was seeking input from members of the industry. After Jan. 10, the task force will integrate that feedback into a more detailed proposal that will be sent to all four groups for a vote, Mathison said.

Each organization will decide separately if it wants to participate in the creation of a new entity, Pomianek said.

Robert Kershaw, president of Domex Superfresh Growers, member of YVGSA and a member of the task force, said the odds of the merger happening are “100 percent.” The growers, packers, marketers and others who are members of the four existing groups will be able to join the new organization – which will have an office in Yakima and an office in Wenatchee, so both of the state’s main fruit-growing regions are served, he said.

“We have one shot to do this right,” Kershaw said. “We have to make sure we have appropriate input from everybody in the industry.”

Once approved, a transition board will be created and will start searching for a chief executive officer for the new entity. When chosen, the CEO will start hiring staff. Backers hope the entity can be in place by August 2014, before the next harvest begins, Kershaw said.

The new organization will have a board of trustees, but the exact number of seats on the board, who should qualify for them and how, exactly, those people should be nominated had not been completely worked out when the announcement was made. The task force wanted a board large enough to represent the diversity of the industry, but not so large that it restricted the ability to act. Backers were considering 11 to 13 seats, said Scott Dorsing of Dorsing Farms, a member of WGCH.

Concerns

Frank Lyall, who also was a member of the task force studying the merger, said some of the growers he had talked to had expressed concerns that the proposed organization could degenerate over time into an “old boys’ network.” There also are concerns that Washington’s larger grower/packers could end up dominating the organization, at the expense of smaller, independent growers.

“The utopian view of this new group is that it will be a single voice representing the whole industry,” Lyall said, but there will always be disagreements between large and small growers on issues like taxation and regulation.

Smaller growers are a significant demographic within the industry, and the proposed organization must include them. There will always be tension between large and small, however, and the new entity won’t be able to solve that. It’s better to handle those disputes internally, Mathison said.

Matt Milkovich


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