Apr 7, 2007

Processor’s Contract with University Arouses Grower Protest

An alliance between Cornell University and a major apple processor in New York state has been criticized by a handful of apple growers.

“There are several of us being vocal about it,” said Fedele Noto, owner of Noto Fruit Farm & Cider Mill in Williamson, N.Y. “For every person being vocal about it, there are at least 10 more who are not happy with the situation.”

Cornell recently made a 10-year research agreement with Mott’s, a subsidiary of Cadbury Schweppes Americas Beverages. According to Cornell, Mott’s buys 6.5 million to 8 million bushels of apples from New York growers annually – 25 percent of the state’s total apple crop (including half the processed crop). Its largest processing facility is in Williamson.

Mott’s agreed to pay Cornell $25,000 plus royalties for the exclusive rights to NY 674, an apple with favorable processing characteristics. The company also agreed to pay Cornell $50,000 annually for 10 years to have the first option on future processing releases from the university’s apple breeding program, according to Cornell.

The agreement will give needed funds to the university’s breeding program, said Susan Brown, the program’s director and a professor at Cornell.

“Breeding programs everywhere are under the financial gun,” she said.

Brown said the agreement had no bearing on fresh-market varieties. Only processing varieties are affected.

“There will continue to be fresh varieties available to growers,” she said.

During the last four or five years, Noto planted about 600 NY 674 trees. He bought the trees before the exclusivity arrangement was made. He planned to sell his NY 674s on the fresh market and to use them in his cider, but after the agreement was put in place, he was told he had to sell all of them to Mott’s for processing or take his trees out of the ground, Noto said.

NY 674s weren’t a large percentage of his crop, but Noto felt the arrangement was unfair. He decided to fight back. He consulted with legal experts and even sent a letter to the state’s attorney general protesting his predicament.

“I don’t want them cutting out little guys like me who are trying to sell fresh fruit,” he said.

Eventually, Mott’s offered Noto – and other growers who had trees in the ground before the agreement with Cornell – a choice: He could sell his NY 674s on the fresh market or sell them to Mott’s for processing, but he couldn’t do both. He chose to sell them fresh.

Mott’s and Cornell decided to exempt NY 674 trees that were in the ground before the exclusivity arrangement was made. Those who planted the trees could either sign a contract with Mott’s or sell their apples on the fresh market, Brown said.

“We tried to be responsive to grower concerns,” she said. “Mott’s worked with us to enable them to have a fresh market.”

Mott’s Agreement Locks in Prices for Three Years

A contract between Mott’s and New York’s processing apple growers has raised some concerns.

“The majority is OK with what we’re doing,” he said. “There are always some people who feel differently.”