BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 914
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          Date of Hearing:   May 4, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                 AB 914 (Atkins) - As Introduced:  February 17, 2011 

          Policy Committee:                              AgricultureVote:9 
          - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill requires the California Cut Flower Commission (CFC) to 
          annually collect certain cut flower market price information 
          based on actual sales to prevent unfair trade practices. 
          Specifically, this bill: 

          1)Requires CFC to annually collect information from 
            participating members related to sales in order to prevent 
            unfair trade practices.

          2)Requires dissemination of this information to all interested 
            persons.

          3)Allows the disclosure of the sales information that gives 
            industry totals, averages or other similar data.

           FISCAL EFFECT  

          1)For the 2011 calendar year, the CFC anticipates that it will 
            receive $869,952 in revenue from grower assessments and 
            grants.  The 2011 budget exceeds that amount by $10,000, thus 
            requiring the CFC to use a portion of its reserves. 

          2)The CFC currently expends $30,000 per year to gather and 
            disseminate voluntary grower sales volume and inventory 
            information for certain varieties of flowers.  This 
            legislation places in statute the requirement that CFC 
            annually collect market price information based on sales which 
            have occurred. There would be no additional costs to the CFC 
            to collect the additional data.









                                                                  AB 914
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           COMMENTS  

           1)Rationale  . The author intends to help California's flower 
            growers by requiring the CFC to collect market price 
            information which will allow CFC to track any misinformation 
            about commodity values. The author hopes that by gathering 
            price information and following price fluctuations in an 
            industry that is increasingly dominated by lower cost imported 
            flowers, California's flower growers will be able better 
            compete with international growers and receive a fair market 
            value for flowers grown in California. 

            Having access to more complete statistical information would 
            enable California cut flower growers to more effectively 
            analyze current market situations and trends which would in 
            turn enable them to make more economically sound and timely 
            decisions regarding the planting, harvesting, marketing, and 
            pricing of their flowers.  For example, if the statistical 
            information shows that there is an oversupply of a certain 
            flower variety and an undersupply of another variety, the 
            grower can adjust his growing operations so as reduce his 
            plantings of the oversupplied variety and increase his 
            plantings of the undersupplied variety, thus increasing the 
            possibility that the grower will eventually be able to sell 
            his flowers at price levels that will at least cover his 
            growing costs and keep him/her economically viable.  

           2)Background . The United States flower market is increasingly 
            dominated by imported flowers. 70% of the U.S. market consists 
            of imported flowers from Colombia. In 1971, the United States 
            produced 1.2 billion blooms of roses, carnations, and 
            chrysanthemums and imported 100 million.  By 2003, the United 
            States was importing 2 billion blooms and growing only 200 
            million. Most flowers sold in supermarkets, big box stores, 
            and airport kiosks come from Colombia, though increasingly 
            Ecuador and Kenya are providing the United States with 
            inexpensive bouquets as both countries increase their flower 
            exports and compete with Colombia in the international flower 
            market. 

            As with other agricultural products, California flower growers 
            must find a way to compete with a growing international 
            industry that produces large quantities of flower exports to 
            feed the demand for inexpensive flowers. 









                                                                  AB 914
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           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081