April 9, 2001

Ms. Ann Veneman

Secretary of Agriculture

U.S. Department of Agriculture

1400 Independence Avenue, SW

Washington, DC 20250

Dear Ms. Veneman:

You are currently being lobbied by several contingencies within the cranberry industry regarding a volume regulation for cranberries in 2001. While there is a small group supporting no volume regulation, the vast majority of growers and handlers agree that, given the current inventory of fruit, it is necessary to invoke a volume regulation for 2001.

The debate has now narrowed to two alternatives as to the exact nature of the volume regulation. The industry is deeply divided between growers that want to fix the supply problem in one year by establishing a 4,000,000-barrel marketable quantity within a Producer Allotment for 2001 and growers that believe we need 4,700,000 barrels and fresh fruit exempt for 5,000,000 barrels total in order to be guaranteed we have enough fruit to meet current demand and build new markets.

As the largest single grower in the US and as the second largest handler, I can understand both sets of arguments and levels of concern. I believe that it is within your authority to declare a volume regulation for 2001 that will meet the needs of both sides of this issue and effectuate the intent of the Act. I would encourage you to issue a volume regulation based upon the following method.

Step 1 – Invoke a Producer Allotment at 5,000,000 barrels for the Marketable Quantity.

Step 2 – Invoke a Handler Withholding at 80% or 4,000,000 barrels.

Step 3 – Establish a price of $30 per barrel plus $10 per barrel for handling of the 1,000,000 barrels in the restricted pool under Handler Withholding.

Analysis –

    1. Both sides of the debate will obtain their individual goals.
    1. Reduced unrestricted supply for proponents of 4,000,000 barrels.
    2. Access to an extra 1,000,000 barrels for proponents of potential new markets and new products.
    1. Provides for an orderly market at an absolute bottom fair price to growers of $30 per barrel.
    2. Provides $10 per barrel of compensation to handlers for cleaning, binning, storage, transportation, administration of the 1,000,000 barrels of restricted fruit if it is utilized.
    3. It will preserve an orderly fresh fruit market instead of encouraging new short-term attempts to sell fresh fruit under an exemption.
    4. It will provide the base support for a better fair price to the grower for the first 4,000,000 barrels.
    5. The $30 per barrel grower base price for restricted fruit is not outside the Ocean Spray cooperative’s projected grower price for the 2001 crop and thus not excessive.

Based upon my advisors review of your broad powers within the Act, I believe it is clearly within your authority to combine the Producer Allotment and Handler Withholding methods of volume regulation because it will provide an orderly market at a fair price to the grower.

As grower’s fight for survival, the 2001 volume regulation has turned long-time friends into bitter enemies. It has created a bitter civil war within the industry. It has created an attitude of mistrust at a time in our industry that we desperately need to work together to promote cranberries for the benefit of growers. Many growers are faced with financial ruin now and cannot wait for long-term solutions.

Throughout the debate on solving the supply problem it became very clear that neither the Producer Allotment or Handler Withholding provided the necessary tools to achieve the goals of the Act in an efficient manner on their individual merits. By combining the two systems you can in fact provide a volume regulation that should work for both grower and handler.

The volume regulation combining the two systems can only be opposed by individuals that believe an orderly market is a market that guarantees fruit at prices below a fair grower return or by individuals that believe other growers must fail to solve the problem. It would limit unrestricted fruit to satisfy growers that want to fix the problem in one year. It would provide access to 1,000,000 barrels for growers and handlers that believe we need more fruit but guarantee a minimum fair return to the grower. It would not expose the industry to a huge oversupply if aggressive sales estimates were wrong.

Let me make it perfectly clear that while I strongly believe that the proposal I have suggested will resolve the issue. I remain vehemently opposed to a Producer Allotment at 4,700,000 and exempt fresh fruit as the only method of volume regulation in 2001. I am desperately searching for the compromise that can resolve the debate and believe that by combining the two approved methods you can achieve that compromise.

The industry needs your wisdom to declare an equitable compromise that will allow the industry to focus on building demand for cranberries at a fair return to growers. We need your wisdom to end this cranberry civil war and allow long time friends to become friends again.

I will be glad to discuss this with you or your staff at anytime.

Sincerely,

John Swendrowski

Chairman & CEO

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