BILL ANALYSIS Ó AB 914 Page 1 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 Page 2 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 Page 3 Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081