on the Flower Promotion Organization

Earlier this year, a settlement agreement was reached by various organizations, including the Floral Trade Council, representing U.S. and Colombian cut flower growers, to end antidumping duties imposed on imported carnations, mini-carnations, pompons and chrysanthemums. Colombian growers will contribute to a promotional fund an amount roughly equivalent to the duty amount. The group that will oversee this promotion fund is the newly formed Flower Promotion Organization. Will Carlson Jr., executive director of the Floral Trade Council and co-president of the Flower Promotion Organization, discusses how the promotion fund will operate.

Q. It has been estimated that the Colombian flower growers will contribute between $2.5 million and $3 million annually to the Flower Promotion Organization's promotion fund. How much are U.S. growers expected to contribute?

A. For the first 30 months of the agreement, the Colombian flower growers will provide the operating revenues amounting to approximately $2.6 million per year for the Flower Promotion Organization [FPO]. Asocolflores [Association of Colombian Flower Exporters] has secured legally binding commitments from these growers to ensure that the funds are there for the duration.

U.S. growers have an opportunity to extend this promotional effort from one year to up to an additional 30 months if they provide the agreed-upon financial commitment by the end of the original 30 months. This means without spending a dime, U.S. growers are placed in a position where they can see how the FPO is performing, and then essentially vote for or against it by making the necessary commitment to extend the program.

Q. How long did it take for the FPO agreement to be worked out?

A. The actual agreement took less than a year to hammer out. The Colombians came to us with a serious proposal in January and we responded promptly. We had the principal agreement wrapped up by April.

Q. Do you have an estimate on how much money was paid by the Colombian growers to the U.S. government in antidumping duties during this dispute?

A. Colombian growers were paying about $5 million annually to the U.S. Treasury on this case alone. As I recall, flowers ranked as a major source of U.S. revenues from duties. Other cases, such as the rose antidumping petition, also had a significant impact. USDA figures showed that the average domestic rose sold for 10 cents or more during the time that preliminary margins were in effect. That amounted to $11 million in domestic revenues to the U.S. grower during that period.

Q. Now that antidumping duties have been eliminated, will the American market be flooded with cut flowers from Colombia?

A. I know the concern is out there. There is to some extent a leap of faith in this agreement. I believe the message U.S. growers are conveying is, we are willing to work together in a constructive manner to improve the market situation. I am hopeful this is not construed as giving carte blanche to continued dumping in the market.

We have intentionally designed this agreement to keep the Floral Trade Council in a position to change gears and take any and all appropriate actions should the circumstances warrant. There is certainly no desire to do this, but we can and will if necessary.

Q. Is this a voluntary program for Colombian growers?

A. There are voluntary contributions possible from refunds on duties already collected from the beginning of the retroactive period in 1997 to when the order was terminated this year. The $2.6 million annual commitment the Colombians made to the FPO is in legally enforceable contracts between the Colombian growers and Asocolflores, so the funds are guaranteed.

Q. Who decides how promotion money will be spent?

A. The sole governing body of the FPO is its board of directors, who determine how the money is spent and what direction the FPO will take. It consists of eight members, four appointed by the Floral Trade Council and four appointed by Asocolflores. The Floral Trade Council appointees are Arne Thirup of Pajaro Valley Greenhouses, Tony Vollering of Sunshine Floral, Patrick Busch of Len Busch Roses and Lee Murphy of the California Cut Flower Commission. Phil Nowers of the Colombia Flower Council and I will serve as non-voting co-presidents.

Q. Any interest in reviving the old Buzz the Bee campaign?

A. We had a preliminary meeting of some of the principal members in June. It was a very productive meeting in which many ideas were shared. Both sides expressed a genuine commitment to spend the funds in the most beneficial, cost-effective manner to promote consumer awareness of flowers. We are still exploring all the positives and negatives of Promoflor and hope to incorporate the lessons learned from that experience into making a more effective FPO. It's still too early to tell if Buzz will resurface in this program.

Q. When will consumers see the first FPO promotions?

A. It's too early to tell what media will be used by the FPO and when the actual start date will be. The agreement between the Floral Trade Council and the Colombian growers states that the promotions will be generic and covers only flower varieties grown in both countries. So we are limited by the FPO's charter to keep it generic.

We are aware that this promotional fund, while significant, cannot buy your grandiose national ad blitz. We need to spend this money in a prudent manner. This means that marketing statistics will need to be gathered and analyzed and a strategy formulated. Both are time-consuming processes. The important thing is to husband the FPO money until a strategy is developed and spend it to maximum effect.

Q. Is there any interest from FPO members to include other foreign growers?

A. We considered making the organization more inclusive, but the ramifications of including others in the directing board and the collection procedures were too unwieldy to warrant further consideration. The two parties need to learn to work together first before the 'family' is expanded. When the FPO is beyond the mandated existence and is fully voluntary, it would be appropriate to include other countries.

Q. Will the responsibilities and goals of the Floral Trade Council change with the passage of this agreement?

A. The responsibilities and goals of the Floral Trade Council will not change with the inception of the FPO. The council has been and will continue to be the organization dedicated to promoting a fair and favorable environment for U.S. producers. Obtaining funds to be used for flower promotion in the U.S. market and determined by growers is certainly in line with the council's goals.

The council also will continue its long-standing position to increase market access abroad for U.S. product. The council has been working since 1993 to eliminate tariffs on flowers worldwide, or zero-for-zero tariff elimination. It seems all the focus we get is on trade actions here. There are still tariffs in Europe on flowers and excessive phytosanitary restrictions to Japan. It would be pleasing to see some of our overseas counterparts practice what they preach over here.

The council will continue to make antidumping laws effective and work on eliminating export subsidies that place our flowers at a competitive disadvantage. The council will continue to work for effective patent rights enforcement. Of course, we will strive to harmonize chemical control and worker safety standards so that all producers are operating under the same rules. There's plenty on the plate to keep us busy.

© 1999 Branch-Smith Publishing