Indian River Citrus League Board of Directors Meeting

I attended the IRCL closed door meeting yesterday at which Andy La Vigne and Michael Carlton gave an update from Florida Citrus Mutual about the evolution of the Citrus Canker Eradication Program to the new BMP-based management program until a better strategy for eradication ( such as chemical response or disease resistant varieties) can be developed . Attached are the materials discussed at the meeting. As you will note, there were a number of speakers from USDA, IFAS and DPI. The summary of the meeting is as follows:

  1. The USDA, IFAS, DPI and Industry organizations are forming a blue ribbon panel to begin development of new protocols or BMP’s for the industry and ,of particular interest to the fresh fruit growers, to meet the demands of markets such as Calf. & Europe in order to not lose vital fresh fruit markets. The new protocols will be announced ( at least in part ) within 30-40 days, certainly in advance of the 3/1 opening of the Legislative session.
  2. The current protocols are still in effect, but trees in the 1900′ presumed infected zone are not being pushed & burned until they test positive. Everything else is the same for now, including the quarantines.
  3. Issues still being discussed with USDA , IFAS, and DPI are:

a. Groves that have IFO’s and have started pushing should be allowed ( at the discretion of the owner) to stop removing ANY non-positive trees or to complete the eradication either at the old 1900′ zone, at some lesser agreed to zone per the new protocols to be announced, or to at least square off a block and “SHOULD” be compensated under the old program ( yet to be funded). Clearly this issue is still up in the air and the only firm assurances given was that trees pushed as of 1/10/06 pursuant to an IFO will be eligible for compensation when new funding is available. b. Regarding funding there is an effort to add an additional $400M to the funding for tree compensation. Current funding of $200M will cover through June 2005 IFO’s and may go into mid-to-late July IFO’s, depending on how much is freed up from canker insurance deductibles, the amount of which has not yet been calculated. c. Crop & tree ins. was a topic of much discussion as premium renewals are currently being considered and groves in quarantine areas are being excluded. The current mechanism for making a claim is the removal of 5% or >100 trees which will probably NOT be triggered by the new procedure of only removing trees that test positive. Michael Carlton advised that there may be an entirely new crop & tree ins. available as soon as May that will address this and other issues. Premiums should be prorated for those who elect to switch. d. Going forward there is NO assurance that there will be compensation for infected trees . e. DPI will still inspect suspected trees and will remove positive trees along with GPS’ing the location and marking the quarantine zones. f. There will be renewed attention and focus in proving that is virtually impossible for fruit processed through a packing house to spread canker. Apparently the protocols used by Argentina to ship fruit from contaminated areas to Europe have been positively received abroad, but historically have not been accepted domestically ( including in Fla. & Calf.). There is a three- tier inspection program used in Argentina that will be studied closely.

The most ominous line of discussion was Dr. Gotwald’s response to an inquiry of whether the Florida citrus industry’s canker issue had reached an endemic phase such that it will not be eradicated and could result in the end of the fresh grapefruit industry as we know it. While he gave some hope that methods for dealing with canker do exist and there will be times when production will not always decline even with canker, he was less than positive about the future of the industry.

I am also attaching a couple of articles of interest. One relates to yesterday’s meeting and has the press release topics discussed. You may want to review this article to expand upon my report. The other is reporting the appeal of a US District Court decision regarding the amount of USDA compensation which was challenged as being insufficient. We will be monitoring these cases carefully and will keep you apprised of their status.

Finally Michael Carlton and I discussed pending legislation that Florida Citrus Mutual has sponsored in the past to address some of the tax issues we have identified as problematic. For the eternally optimist client, who plans to replant, this legislation would extend the time period for replanting under Code Section 1033 from 2 years to 4 years after the grove is destroyed. It would also allow growers 10 year income averaging for payments received that they are not reinvesting, but are recognizing as income ( retroactive to last year). I will be seeking the support of the Tax Section of the Florida Bar and the FICPA to see if, with these organizations support, this worthwhile effort can be pushed through in Washington, DC.

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