Article 9. Terms Of Marketing Orders of California Food And Agricultural Code >> Division 21. >> Part 2. >> Chapter 1. >> Article 9.

Except as otherwise provided in Sections 58657 and 58747, any marketing order which is issued by the director pursuant to this chapter may contain any or all of the provisions which are prescribed by this article for regulating, or providing methods for regulating producer marketing, or the handling, or any of the operations of processing or distributing by handlers, of any commodity within the state, but no others.

A marketing order may contain provisions for determining the existence and extent of the surplus of any commodity, or of any grade, size, or quality of it, and providing for the control and disposition of such surplus, and for equalizing the burden of such surplus elimination or control among the producers, processors, distributors, or other handlers that are affected. Notwithstanding any other appropriate means of equalizing the burden of surplus control and its elimination as provided in this chapter, provision may be made for the creation of a stabilization fund to be used for purchasing or otherwise acquiring any portion of the surplus of any commodity either in fresh or processed form, except when processed in hermetically sealed containers, and for the diversion of such surplus quantity of such commodity which is so acquired into noncompetitive or byproducts uses or for disposing of such surplus in noncommercial channels. Money for such stabilization fund shall be provided by means of the establishment of an assessment rate for such purpose levied upon producers or handlers, or upon both producers and handlers. Such assessment rate shall be based upon the units in which such commodity is handled or marketed or upon any other uniform basis which the director determines to be reasonable and equitable. For convenience of collection, the director may collect any producer assessments from handlers of such commodity. Handlers paying such assessments for, and on behalf of, any producers may deduct such producer assessments from any money which is owed by such handlers to such producers.

A marketing order may contain provisions for limiting the total quantity of any commodity, or of any grade, size, or quality of it, which may be marketed by producers, or processed, distributed, or otherwise handled within this state during any specified period by any and all persons that are engaged in such producer marketing, processing, distributing, or handling. Any such limitation shall be applied under a uniform rule which is applicable to all such persons so regulated. The total quantity of any such commodity which is so regulated and permitted to be marketed by producers, processed, distributed, or otherwise handled, shall not be less than the quantity which the director finds is reasonably necessary to supply the market demands of consumers of such commodity. The marketing of green ripe olives is not, however, subject to any provisions of a marketing order which limits the total quantity of such commodity which may be marketed.

A marketing order may contain provisions for allotting the quantity of any commodity, or of any grade, size, or quality of it, which each handler may purchase or acquire from, or handle on behalf of, any and all producers of the commodity, within this state during any specified period under a uniform rule, which is applicable to all handlers that are so regulated based upon the amounts produced or sold by such producers in a prior period which the director finds to be representative, or upon the current season's production or sales of such producers, or both, to the end that the total quantity of such commodity, or of any grade, size, or quality of it, which is so purchased or handled within this state is apportioned equitably among the producers of the commodity.

A marketing order may contain provisions for allotting the quantity of any commodity, or of any grade, size, or quality of it, which each handler may process, distribute, or handle within this state under a uniform rule, which is applicable to all handlers that are so regulated, which is based upon the quantities of such commodity, or of any grade, size, or quality of it, of the current season's crop which each such handler has available for such processing, distribution, or handling, or upon the quantities of such commodity, or of any grade, size, or quality of it, which is so processed, distributed, or handled by each such handler in a prior period which the director finds to be representative, or based upon both, to the end that the total quantity of such commodity, or any grade, size, or quality of it, processed, distributed, or handled within this state during any specified period is equitably apportioned among all such handlers of the commodity.

A marketing order may contain provisions which regulate the period during which any commodity, or any grade, size, or quality of such commodity, may be processed, distributed, or otherwise marketed within this state by any and all persons that are engaged in such processing, distributing, or marketing within this state. The total quantity of such commodity which is so regulated and permitted to be processed, distributed, or otherwise marketed during such period, shall not, however, be less than the quantity which the director finds is necessary to reasonably supply the needs of consumers of such commodity.

A marketing order may contain provisions for the establishment of surplus, stabilization, or byproduct pools for any commodity, or of any grade, size, quality, or condition of it, and providing for the sale of the commodity in any such pool and for the equitable distribution among the persons that are participating in the pool of the net returns which are derived from the sale of such commodity. The marketing of green ripe olives is not, however, subject to any provisions of a marketing order which relate to the establishment and operation of surplus pools. If the marketing order authorizes the establishment of any such pool, the advisory board may receive such commodity from each producer or handler and handle it according to the grade, size, quality, or condition of the commodity and account to each producer or handler that is participating in the pool upon a pro rata basis for the net proceeds derived from the sale of the commodity. The contents of any surplus pool shall not be marketed by the advisory board in any form which would compete directly with that portion of the commodity which is marketed in regular channels of trade. However, any portion of any surplus pool may be transferred by the advisory board upon any gratuitous basis to charitable organizations and other similar agencies under proper safeguards to insure that none of such commodity shall compete directly with the unrestricted portion of such commodity. The advisory board may dispose of the contents of a stabilization pool in the regular marketing channels in such manner and at such times as it deems advisable, consistent with the maintenance of stabilized marketing conditions for such commodity. The advisory board may dispose of the contents of any byproduct pool only for byproducts or for other similar purposes under proper safeguards to prevent such portion of the commodity so disposed of from directly competing with that part of the commodity which is marketed in the usual form or in the regular channels of trade. If the marketing order authorizes the establishment of a surplus, stabilization, or byproduct pool, the advisory board may do any of the following:
  (a) Arrange for and operate any necessary facilities for the storing, financing, grading, packing, servicing, processing, preparing for market, selling, and disposing of the contents of any pools which are provided for in this chapter. The board shall not, however, engage in commercial warehousing.
  (b) Pledge all of the commodity in any such pools with banks or other lending agencies for the purpose of obtaining loans upon it. The board shall have title, for the purpose of financing and handling, to all of the commodity in any such pools.
  (c) Create, by a uniform assessment upon producers, or upon some other uniform and equitable basis, maintain, and disburse an equalization fund to be used for the removal of any inequalities between producers or handlers that are participating in any pool which result from errors in estimating production or surplus or for indemnifying producers whose production, in whole or in part, is diverted in green form or otherwise from normal marketing outlets or diverted to byproducts, relief, or other noncompetitive purposes pursuant to the provisions of the marketing order.

A marketing order may contain provisions which establish, or provide for the establishment, with respect to any commodity, either as delivered by producers to handlers or processors, or as handled, processed, or otherwise prepared for market, or as marketed by producers, handlers, or processors, both of the following:
  (a) Grading standards of quality, condition, size, maturity, or pack, which standards may include minimum standards. The standards so established shall not, however, be established below any minimum standards which are prescribed by law for such commodity.
  (b) Uniform inspection and grading of such commodity in accordance with the standards which are so established.

(a) A marketing order may contain provisions for the establishment of plans for advertising and sales promotion to maintain present markets or to create new or larger markets for any commodity that is grown in this state, or for the prevention, modification, or removal of trade barriers that obstruct the free flow of any commodity to market. The secretary may prepare, issue, administer, and enforce plans for promoting the sale of any commodity.
  (b) Any plan shall be directed toward increasing the sale of the commodity without reference to any private brand or trade name that is used by any handler with respect to the commodity regulated by the marketing order, except the use of wine if other than private brands or private trade names are unavailable, and except that marketing orders that provide for the advertising and sales promotion of raisins, prunes, and walnuts may allow those plans to credit the pro rata assessment obligations of a handler with all or any portion of that handler's direct expenditures for the marketing promotion that may include private brand or trade name advertising performance allowances, sales promotions, couponing, and in-store promotion programs and materials.
  (c) (1) Notwithstanding any provision of this section, any marketing order for fluid milk may contain in its advertising and sales promotion plan provisions to allocate funds for promotions of cheese, ice cream, or butter products made with California milk, including promotions in which brand or trade names are used, but only if the use is incidental to the promotion of the California milk product and not in direct promotion of the brand or trade name, and if the allocation of funds is made available on a nondiscriminatory basis to all retailers and manufacturers of butter, ice cream, or cheese utilizing milk produced in California. Permissible private brand or trade name marketing promotions may include advertising, performance allowances, sales promotions, couponing subject to Section 61375 and in-store promotion programs and materials, and other marketing communication tools.
  (2) For purposes of this subdivision, "butter" means the product made by gathering the fat of fresh or ripened milk or cream into a mass, which also contains a small portion of other milk constituents.
  (3) This subdivision shall not become operative unless approved as set forth in subdivision (c) of Section 58993.
  (d) No advertising or sales promotion program shall be issued by the secretary that makes use of false or unwarranted claims in behalf of any product, or disparages the quality, value, sale, or use of any other commodity.

Notwithstanding Section 58889, any marketing order for processed fruits, nuts, or vegetables may contain in its advertising and sales promotion plan provisions to allocate funds to promote private brands or trade names.

Notwithstanding subdivision (b) of Section 58889, effective immediately, a marketing order may contain provisions for the establishment of plans for advertising and sales promotion, including any private brand or trade name, to maintain present international foreign markets or to create new or larger international foreign markets for any commodity which is grown in this state, provided that effective January 1, 1978, such advertising and sales promotion plans require that each individual commodity package label indicate the commodity is of California origin in English or other appropriate language.

A marketing order may contain provisions which relate to the prohibition of unfair trade practices. In addition to the unfair trade practices now prohibited by law, applicable to the processing, distribution, or handling of any commodity within this state, the director may include in any marketing order which is issued provisions that are designed to correct any trade practice which affects the processing, distributing, or handling of any commodity within this state which the director finds, after a hearing upon the marketing order in which all interested persons are given an opportunity to be heard, is unfair and detrimental to the effectuation of the declared purposes of this chapter.

A marketing order may contain provisions for the application for, review, certification, and equitable payment of, production adjustment benefits to growers from funds which are collected for such purpose on a uniform basis from all commercial growers of any commodity in the state, for which production adjustment payments are made. Such funds may be supplemented by funds, if any, which are received from federal, state, or other agencies for such purpose.

(a) A marketing order may contain provisions for carrying on research studies in the production, processing, or distribution of any commodity and for the expenditure of moneys for these purposes. Prior to the implementation of a research program authorized by this section that will extend beyond the next reapproval date of the marketing order pursuant to Section 59086, the director shall call a public hearing pursuant to Article 6 (commencing with Section 58771) to receive testimony regarding support for the research program by persons directly affected by the marketing order. After the hearing, the director shall find and determine, based upon the evidence received, whether or not to conduct a referendum pursuant to subdivision (c) of Section 58993 prior to approval of the proposed research program in order to evaluate with greater certainty the support for the program by the persons directly affected by the marketing order.
  (b) In carrying out this section, an advisory board may, subject to the approval of the director, establish a trust account to fund research programs on an ongoing basis. These programs may extend beyond the termination date of the marketing order. For any program designed to last more than one year, funding shall be provided for from the trust account during the initial year.
  (c) In any research in production or processing which is carried on pursuant to this section, the Vice President for Agricultural Sciences of the University of California and the advisory board which is provided for in Article 8 (commencing with Section 58841) shall cooperate in selecting the research program which is to be carried on from time to time. Insofar as practicable, the programs shall be carried out by the University of California, but if the vice president and the advisory board determine that the university has no facilities for a particular program, or that some other research agency has better facilities for it, the program may be carried out by any other research agency which is selected by the vice president and the advisory board.
  (d) In carrying out this section, an advisory board may carry out research programs for the purpose of developing and testing new products in selected markets. The proposed programs shall be submitted to the director for his or her approval prior to the expenditure of funds for the program. The proposal submitted shall include, among other things, a description of the new products, the test market to be utilized, and the duration of the program.

A marketing order may contain provisions for research studies concerning the health, food, nutritional, therapeutic, dietetic or such qualities of other food products, for the development of new food products, or for the development of new uses for agricultural products.

No marketing order for milk shall be issued by the director unless he finds that such marketing order does not conflict with the provisions of Chapter 2 (commencing with Section 61801) or Chapter 3 (commencing with Section 62700) of Part 3 of Division 21.

A marketing order may contain provisions which establish, or provide authority for establishing, for any commodity, either as such commodity is produced or is delivered by producers to handlers, or as handled or otherwise prepared for market, or as marketed by producers or handlers, an educational program which is designed to acquaint producers, handlers, consumers or other interested persons with quality improvement and nutritional values, including sanitation practices, procedures, or methods as applied to such commodity.

A marketing order may contain provisions which establish, or provide authority for establishing, and for regulating the permissive use of an official board brand, trade name, or label, or other distinctive designation of grade, quality, or condition, except the grade or quality designations in effect pursuant to state or federal grade standards, for any commodity, other than wine, either as such commodity is produced or is delivered by producers to handlers, or as handled or otherwise prepared for market, or marketed by producers or handlers. As provided in Section 59236, the permissive use of any such official board brand, trade name, or label or other distinctive designation of quality shall be limited to producers and handlers of the commodity that are participating in the marketing agreement or order, and that are in compliance with its provisions and with any regulation, or rule and regulation, which is adopted under it. Any official brand or trade name which is established pursuant to this section shall not be construed as a private brand or trade name with respect to Section 58889.

A marketing order may contain provisions to detect, control, prevent damage by or to eradicate insects, predators, diseases, or parasites with respect to any commodity or group of commodities. The advisory board may recommend and the director may approve measures to assist in the prevention or reduction of losses to crops or livestock caused by predators, insects, disease or parasite infestations, including the establishment and operation of detection, inspection, spraying, dusting, fumigating or other control measures. For the purposes of this section, (1) assessments established pursuant to Article 10 (commencing with Section 58921) of this chapter may include an assessment for nonbearing acreage as well as bearing acreage of the commodity affected by such predators, insects, disease, or parasite, and (2) the director may use both the bearing and nonbearing acreage of such commodity as a measure of production for assent or referendum purposes in relation to such assessments. As used in this section, "nonbearing acreage" means acreage planted to produce the particular commodity covered by the marketing order during the marketing season on which no quantity of the product is produced for marketing or is anticipated will be produced for market during such marketing season.

A marketing order may contain provisions for the gathering and dissemination of weather data to producers of any commodity, and to any persons providing services relating to production of a commodity, when the data is necessary to aid in any manner in the production or harvesting of that commodity.

To address catastrophic events, a marketing order may contain provisions for the establishment and operation of an indemnity trust fund to cover livestock and livestock product losses due to disease, natural disaster, or accidents.