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Michael W. Sparks' Sunset Review Testimony

January 31, 2008

Good Morning, thanks for allowing me to testify this morning. My name is Michael W. Sparks and I am the executive vice president and chief executive officer of Florida Citrus Mutual, the state’s largest citrus grower trade organization with more than 8,000 grower members. We are celebrating our 60th Anniversary this year.

Florida Citrus Mutual is governed by a 21-person Board of Directors who are elected each year. The Board is comprised of small, medium and large growers.

In November, the state’s Office of Program Policy Analysis and Government Accountability (OPPAGA) issued its Sunset Memorandum and Options for Legislative Consideration on the Florida Department of Citrus (FDOC).

The sunset memorandum identifies six potential options that the Legislature should consider as part of its sunset review of the FDOC. The options range from leaving the FDOC as is, eliminating it completely and folding it into the Florida Department of Agriculture and Consumer Services (FDACS).

For the record, let me state that Florida Citrus Mutual believes the Legislative sunset review of the FDOC is a necessary and welcome process.

There is no doubt the FDOC has served Florida citrus growers well over the past 70 years. Independent studies report generic marketing programs provide a significant return on investment to growers which in turn helps create a $9 billion industry in Florida that includes tens of thousands of jobs. Thanks in part to FDOC marketing, Florida citrus products are known worldwide for their taste and health benefits.

Mutual is fully supportive of the FDOC’s purpose and we do not believe it would be in the Florida citrus growers’ best interest to eliminate it or fold it into FDACS. And considering the FDOC is funded solely through grower citrus tax dollars, any benefit these options might have to general Florida taxpayers would be minimal. The FDOC pays its own way.

However, the OPPAGA report does provide a great opportunity for stakeholders to scrutinize the FDOC and ensure it is operating in the best and most efficient manner. The sunset review is a positive process that will result in a healthier Florida citrus industry and that’s good for the entire state.

Earlier this month, your Committee staff recommended the state Legislature allows growers to vote on the continuation of the FDOC through a referendum similar to those conducted by other commodity marketing organizations.

On the surface, this idea appears to be a good one; growers pay the box tax to fund the FDOC. As a result, they should have a direct voice in deciding whether that tax exists at all. If growers do not feel they are getting an acceptable return on investment from their box tax dollars, they should have recourse. Accountability to the grower is a good thing. Growers have a keen interest in how the FDOC is marketing their products.

However, there are many intricate and detailed questions we must ask AND answer before Mutual can fully support a referendum. We all know details are everything.

For example…

• How often would a referendum take place?

• How many questions would be asked? Would it be a simple “yes” or “no” vote?

• One grower equals one vote or are votes weighted based on acreage? This is a very important question because we do not want to have a few large growers dictate the results of any referendum.

• What constitutes a majority? Who can vote?

• If reauthorization were to fail after a referendum, what would be a suitable winddown period?

• How would state maturity standards be preserved?

Because of the complexities, Florida Citrus Mutual feels it would be in the best interest of the Florida citrus industry to have more time to evaluate a proposed referendum. A referendum would not be a simple process and we should be clear on the parameters before we can dismiss or support it. In addition, other alternatives to a referendum may want to be pursued by the citrus growers.

There are clearly many issues and details that are related to the seemingly simple suggestion of a grower referendum. We hope these comments will be helpful and look forward to future discussions. Again, thank you for allowing us to comment.