What Is Next After the Referendum


A PRIMER ON HOW TO SEAT GROWER AND SHELLER MEMBERS ON THE NEW AMERICAN PECAN COUNCIL

By:  Paul Quirós and Mike Adams

“What do we do now?”[1]

Introduction

The United States Department of Agriculture (USDA) announced on May 6, 2016, the results of a historic vote by Pecan growers who overwhelmingly approved the Federal Marketing Order for Pecans (FMO).  The goal of the American Pecan Board (the sponsor of the FMO) and the USDA is to officially seat the Board of the American Pecan Council (APC), the new governing board of the FMO, by October 1, 2016, in order to collect assessments on the 2016 Pecan crop.  Since the APC does not yet exist, the USDA will conduct the initial nominating and voting process outlined in this article.[2]

Orchard Rows Royalty FarmsIt is anticipated that the USDA’s “Final Rule” published in the Federal Register will affirm the language of the FMO published as the FMO’s Proposed Rule.  The “Final Rule” will also approve the use of the “Call for Nominations” forms and “Ballot for Nominees” forms to be used by both shellers and growers for the process of seating members of the APC.  Please note that the process to nominate and then vote on nominees by both shellers and growers cannot take place until after the USDA has published the “Final Rule” in the Federal Register.  We anticipate that the Final Rule may be published in the Federal Register as early as July 2016.

The purpose of this paper is to outline the process of nominating and then voting on nominees (two separate steps) for the APC’s sheller and grower seats.

General Information

Only growers[3] can nominate growers, and only and shellers[4] can nominate shellers for the APC and then later vote for the nominees, which are two distinct steps.  Growers and shellers may only nominate and vote for nominees in one of the three (3) regions.[5]  The forms for the first step – nominating shellers for the APC by shellers and nominating growers for the APC by growers (the FMO calls this the “Call for Nomations”) and for the second step – voting on sheller nominees by shellers and voting on grower nominees by growers (the FMO calls this the “Voting on Nominees”) are to be published by the USDA and will be officially available after the Final Rule is published in the Federal Register.  The voting will also be by regions.  Finally, Alternates have a unique role in the APC[6] and are generally selected as second highest nominee vote getter for a particular Member seat on the APC.

Unique Information For Grower/Shellers; Growers Growing In More Than One Region; and Shellers Operating In More Than One Region

The first rule is that if you or your company is both a grower and a sheller, you may only nominate and vote for nominees as a grower or a sheller, but not both, so you must choose.[7]  The second rule is that you can only vote in one region.  Here is how the FMO sorts out the more difficult questions relating to regions:  If a grower produces pecans in more than one region, such grower shall nominate and vote in the region in which they grow the largest volume of their production.[8]  If a sheller is engaged in handling[9] in more than one region, such sheller shall nominate and vote in the region in which they shelled the largest volume of pecans in the preceding year.[10]

Make Up Of The American Pecan Council – Briefly[11]

The APC will have 17 Members and 17 Alternates.  Each region will have three (3) growers and two (2) sheller Members and the same number of Alternates.  The remaining two (2) APC Members and two (2) Alternates are called at-large Members and Alternates and will be selected by the APC.

Processing GVPCThe three grower seats from each region shall be filled as follows:  Seat 1 (volume vote of all growers in the region) and Seat 2 (popular vote of all growers in the region) shall be for growers with 176 pecan acres or more and Seat 3 (popular vote of all growers in the region) shall be for a grower with less than 176 pecan acres.  A pecan acre is generally a standard acre (43,560 square feet) but can be more or less than a standard acre in some settings.[12]

The two shellers seats from each region shall be filled as follows:  Seat 1 (popular vote of all shellers in the region) will be for a sheller who handles more than 12.5 million pounds of inshell pecans and Seat 2 (popular vote of all shellers in the region) will be for a sheller who handles between 1 million and 12.5 million pounds of inshell pecans.

Special Rules Of Nominating And Voting That Are Unique To Federal Marketing Orders

This may sound different from other elections in the United States but the persons selected by the shellers and growers are not automatically seated as Members or Alternates on the APC, they must all first be approved by the Secretary of Agriculture, in his or her sole discretion.  This makes sense because the Secretary of Agriculture is charged with only seating qualified persons who have authority conferred by the USDA to enforce assessments and carry out the other requirements of the FMO.  The net result of the law is that the FMO does not have “nominations” and then “elections.”  Instead, there is a two part process – “Call for Nominations,” and “Voting for Nominees” – followed by a confirmation (or not) of the nominees by the Secretary of Agriculture. [13]  For purposes of this article, we will not discuss what happens if the Secretary of Agriculture does not confirm the nominees with the greatest support by growers or shellers.  We understand that the failure to confirm a nominee is a great rarity among other federal marketing order commodity groups and we will address it later if we need to do so.  For now it is enough to know that in order to talk with precision using the language of the FMO we will refer to the nomination process as the “Call for Nominations” and the election process as the “Voting for Nominees.”

Call For Nominations

The USDA will approve forms entitled “Call for Nominations – Grower” and a “Call for Nominations – Sheller” (together called the “Nomination Forms”) and these forms will be officially available after the Final Rule is published in the Federal Register.  The USDA is in charge of the Call for Nominations.  Once the forms are available from the USDA, a sheller or a grower may use the appropriate Nomination Forms to nominate a sheller or a grower, respectively, for the APC, in their region.  The Nomination Forms will be available from the USDA and will be part of a Press Release from the USDA (shellers and growers can copy or download the Nomination Forms from the USDA’s Press Release).  The USDA has initially determined that the Call for Nominations period will be open for two weeks and will begin with the USDA’s Press Release (all occurring after the Final Rule is published).

The Nomination Forms will require the nominating person’s name and signature, the nominee’s name, two additional names and signatures supporting the nomination for growers (only one supporting name and signature for shellers) and the other information required by the Nomination Forms (including what seat the nomination is intended).[14]

Voting for Nominees

The Call for Nominations process will provide the growers and shellers with a list of nominees that can be voted on.  Once the list of sheller nominees and grower nominees is published, there will be a three week period, overseen by the USDA, in which growers can vote for grower nominees for all three (3) grower seats in their region and the shellers can vote for sheller nominees for both sheller seats in their region.

Tree Shaker Royalty FarmsOnce again, after the Final Rule is published in the Federal Register, the USDA will provide forms called “Ballot for Grower Nominees” and “Ballot for Sheller Nominees.”  These forms will be used by the growers and shellers to vote for the nominees in their region that they would prefer to serve as Members and Alternates of the APC.  These ballot documents will be mailed to growers and shellers by the USDA.

The vote by the growers and shellers will “rank” their preferred nominees in each region which, along with their qualifications, the nominating voting record and other relevant information, will be submitted to the Secretary of Agriculture for his or her approval.[15]  It is important to note that any nominee must agree to serve[16] and also provide information about himself or herself for review by the Secretary of Agriculture on a form also to be authorized by the USDA entitled “Confidential Background Statement – American Pecan Council.”[17]  To allow Nominees the time to gather information about themselves and prepare the “Confidential Background Statement – American Pecan Council,” the USDA anticipates that it will make this form available at the time the Nomination Forms are available.

Just like the “Call for Nominations,” the “Voting for Nominees” will be overseen by the USDA and the USDA will define the period of time in which the “Voting for Nominees” will take place, currently anticipated to be a three week voting period.

Questions, Opportunities To Get More Information And USDA Webinar

The Final Rule published in the Federal Register is the industry’s authority to make nominations and vote on the nominees for the APC.  Any questions about this process should be answered in the language of the Final Rule.  There will be opportunities to ask questions of the USDA or the American Pecan Board’s members or legal counsel at upcoming state grower meetings this Spring and Summer.

The USDA is also producing a webinar on these processes.  As soon as the USDA posts this Webinar, the American Pecan Board will post a Press Release on its website informing everyone how to access the USDA’s webinar.

 


 

[1] Last line from the 1972 Movie “The Candidate” starring Robert Redford.

[2] Proposed Rule by the Agricultural Marketing Service of the USDA, dated February 29, 2016, related to a Federal Marketing Order for Pecans (to be codified at 7 C.F.R. §986.46(a)(2016)).  Hereinafter cites to this Proposed Rule will be by section reference only.

[3] §986.17 Grower.

[4] §986.36 Sheller.

[5] §986.33 Regions. Eastern Region: Alabama, Florida, Georgia, North Carolina and South Carolina. Central Region: Arkansas, Kansas, Louisiana, Mississippi, Missouri, Oklahoma and Texas. Western Region: Arizona, California and New Mexico.

[6] §986.47 Alternate members.

[7] §986.46(b)(2)(v)

[8] §986.46(b)(1)(ii); §986.46(b)(2)(ii).

[9] See §986.20 To handle.

[10] §986.46(b)(1)(iv); §986.46(b)(2)(iv).

[11] See §986.45

[12] See §986.17(b)

[13] See §986.45, §986.46 and §986.49

[14] §986.46(7).

[15] §986.46(a); §986.46(b).

[16] §986.49

[17] §986.46(b)(5); §986.46(b)(7)(i)(D); §986.46(b)(7)(ii)(D)