RAISIN ADMINISTRATIVE COMMITTEE

ADMINISTERING THE FEDERAL MARKETING AGREEMENT AND ORDER REGULATING THE HANDLING OF CALIFORNIA RAISINS Telephone: 559-225-0520

Fax: 559-225-0652Email: info@raisins.org

Website: www.raisins.org

The Raisin Administrative Committee is an Equal Opportunity Employer and Provider.

2445 Capitol Street, Suite 200 • Fresno CA 93721-2236

MINUTES OF THE RAISIN ADMINISTRATIVE COMMITTEE

June 28, 2017

Chairman Monte Schutz called the meeting of the Raisin Administrative Committee to order at 3:30 p.m. on Wednesday, June 28, 2017 in the RAC/CRMB Large Conference Room, 2445 Capitol Street, Suite 200, Fresno, California.

MEMBER ALTERNATE

Adbulian, Linda Kay VACANT [a] Asmar, Jane* [a] Moles, Doug* Bagdasarian, Mitch [a] Efird, Russel [a] Bedrosian, Michael [a] Bedrosian, Paul [a] Boghosian, Philip* Milinovich, Jeff*

Bortolussi, Jeff King, Dan Cardoza, Dwayne [a] Rai, Jerry[a] Cederquist, Doug [a] Lion, Frank [a] Chooljian, Chad [a] Huber, Tim

Chooljian, Gerald [a] Chooljian, Michael Coelho, Ed Olson, Brad [a] Crowe, Richard VACANT [a] Cubre, Chris VACANT [a] Envernizzi, John VACANT [a] Finley, John VACANT [a] Hoff, Darren Rodrigues, Tim

Housepian, Dennis [a] Gee, Jimmy Jue, Jeff [a] Blayney, David [a] Kazarian, Michael [a] Fanucchi, Edward Kazarian, Ron VACANT

Kister, Steve Estermann, David Kriebel, Barry Bender, Braden Ludtke, Willy [a] Perry, Michael

Marthedal, Jon [a] Locker, Paul [a] Medeiros, Manuel [a] Phan, Phat

Mikaelian, Michael [a] Batth, Gagan [a] Moles, Ray VACANT [a] Naito, Tomo Moriyama, Michael [a] Newton, Mike VACANT [a] Noorigian, Jeff [a] Berekoff, Jim Peters, David Penner, Pete [a] Rebensdorf, Jerry VACANT [a] Sahatdjian, Bill [a] Roberts, Gerald Sahatjian, Richard [a] Surabian, Kristina [a] Sandhu, Nindy Nielsen, Mike

Sangha, Mitch [a] Markarian, Greg Sarabian, Courtney VACANT

2

Schutz, Monte [a] Huter, E.G. [a] Shapazian, David [a] Cave, Don Singh, Harvey Chatha, Kuldip Stark, Rick Goto, Clint VACANT [a] Jensen, William

VACANT Rocca, Randy VACANT VACANT

VACANT VACANT VACANT VACANT

[a] Vartan, Dennis* Sahatdjian, Victor* * Switched Positions on May 1, 2017

[a] = Absent Messrs. L. Blagg, K. Cohoon, J. Smutny, and D. Sternweis, Mmes. J. De Anda, M. Jones, D.

Powell, K. Notoro, M. Stobbe, and D. Williams were present along with approximately 15 industry representatives and growers. Ms. M. Jones was directed to call roll and establish a quorum.

APPROVAL OF MINUTES

The Chairman called for corrections or additions to the minutes of the meeting on March 29,

2017, hearing none, minutes were approved as mailed.

USDA/MANAGEMENT REPORT Mr. J. Smutny introduced Ms. Kathie Notoro who has replaced Ms. Maria Stobbe as the Marketing Specialist for Raisins. Mr. J. Smutny stated that there is a Proposed Rule out for Comment on the 8 proposed Marketing Order amendments that were heard in a hearing in May 2016. The comment period will be open till Friday, June 30th, and encouraged the Body to submit their comments. Mr. J. Smutny stated that Ms. Erin Morris, Deputy Administrator for the Specialty Crops Program has moved back to the Administrator’s office, and Ms. Melissa Bailey has been appointed Acting Deputy Administrator. Ms. D. Powell stated that there are still some outstanding Orientation Certificates from September 2016, for those members not here today the forms for signature will be mailed. If we do not have 100% compliance, then next year we will be required to have the Committee sit through the Orientation presentations. Ms. D. Powell reported on the Grower Confirmation that was completed and mailed on June 16, 2017. The letters are confirmation of tonnage received at the RAC offices. If the tonnage is correct, nothing needs to be done, if the tonnage is incorrect, then please contact Claudia at Baker, Peterson, Franklin (BPF) to make the correction. Ms. D. Powell stated that there are still outstanding grower checks for the 2009/10 grower payment. We have provided the list in the folders, as well as posted to the website. If you know any of these growers, please contact them and have them contact the RAC Office (attached).

3

Ms. D. Powell reported the 2016/17 Merchandise Incentive Program (MIP) checks were mailed out on June 19th in the amount of approximately $1.425 million. All countries met their $30/ton maximum with the exception of Taiwan. Taiwan did not meet their market share requirement of 75%, they obtained 56%. Per the terms and conditions, they were pro-rated at $22.40/ton on 3,747 tons. Japan exceeded their 80% market share requirement at 90% and received $30/ton on 22,809 tons. Ms. D. Powell stated that the annual RAC/JDFIA meeting will be held in Maui, Hawaii around February or March 2018, and the budget is set at $100,000.

Moved by Mr. M. Mikaelian, seconded by Mr. V. Sahatdjian to authorize the Chairman to

appoint a delegation, at his discretion, to attend the Annual RAC/JDFIA Conference to be held in Maui, Hawaii in February or March of 2018, not to exceed $100,000. The motion carried unanimously.

Ms. D. Powell reported on the International Seedless Dried Grape Producing Countries Conference, which the RAC has agreed to host in October 2017. Ms. D. Powell stated that in October 2006, the RAC hosted the International Seedless Dried Grape Producing Countries Conference in Monterey at a cost of approximately $50,000 which included costs to cover six RAC delegates that had been appointed by the Chairman, Mr. C. Gunlund. Moved by Mr. V. Sahatdjian, seconded by Mr. D. Housepian to authorize the Chairman

Schutz to select a delegation, at his discretion, to attend the 2017 International Seedless Dried Grape Producing Countries Conference to be held in Monterey, California, October 22 through October 25, 2017, with expenses not to exceed $50,000. The motion carried unanimously.

EXPORT WORKGROUP REPORT Mr. L. Blagg reported on Export activities that have taken place since April 24, 2017. Mr. L. Blagg stated that in April the International Representatives were here to provide the RAC with updates on past activities and new upcoming activities. From that date, Export activities have included submission of the UES Grant Application, a trip to Germany and the United Kingdom, participation in the Bakery Study tour with winners from Japan, China, Mexico, and Germany, and a third-party evaluation for the United Kingdom & Scandinavia. Mr. L. Blagg reported on Shunya China’s recently completed program to broaden distribution, grow consumer awareness and strengthen e-Commerce sales. The promotion was geared to driving e-Commerce traffic of the nine California raisin brands now available in China. California Raisins became the sole sponsor to the China-hosted International Equestrians Federation world competition, with all on-site banner promoting California Raisins including a family area that provided samples and raisin gifts to all children attending. Mr. L. Blagg reported that the Export Video will be completely translated and distributed in 13 languages to our International Representatives by July 21, 2017. Possible domestic production and distribution will be discussed at the CRMB meeting on July 20, 2017. Mr. L. Blagg stated that a MRL Fact Sheet has been drafted for the JDFIA and sent to Hiroko Mimura (Market Makers, Inc) for review. Mr. L. Blagg further stated that this year’s MRL tests have been completed and GMO certificates have been sent to those packers who participated. Sent along with the certificates, was a letter from Craig Ledbetter at USDA, stating that California raisins are GMO free.

4

Mr. L. Blagg discussed the test results from OMIC and Covance done on “Made in Nature” brand Turkish Sultanas purchased at Wal-Mart, that showed the product failed Sulfur residue tests. Discussion followed regarding how to pursue the next course of action against the “Made in Nature” brand. Mr. D. Cardoza stated the sourcing of the product is in violation of the organic standards, and we need to maintain integrity of our product. The results of our testing need to be sent to CDFA along with all the documentation that we have, then follow up with California Certified Organic Farmers (CCOF) and National Organic Program (NOP). Additionally, discussion stated this doesn’t just involve organic product, but any product that is being imported that might have sulfur residue. Moved by Mr. V. Sahatdjian, seconded by Mr. D. Cardoza to direct staff to pursue any

import product that exceeds the organic requirements and hand documentation over to CDFA to proceed and work with USDA on disciplinary action.

Mr. V. Sahatdjian stated that this began with a “Made in Nature” brand that was purchased at a local Fresno Wal-Mart. This is the product that was tested with OMIC and again with Covance, at the request of the Committee, which both tests showed failed results on the organic limit. Mr. V. Sahatdjian stated that staff try to pursue the “Made in Nature” brand and any other import product that anyone finds that could be in violation of organic limits or requirements. The motion carried unanimously. Mr. L. Blagg continued the Export Report with a discussion on the PIERS Report. Ms. D. Powell stated the report provides value to the staff and the MIP program in identifying returned containers, and staff will continue to use this information in the future. Discussion of the Body, determined that it would not need to be distributed to members/alternates or packers, but the information would still be available if needed.

AUDIT SUBCOMMITTEE REPORT Mr. J. Jue reported that the Audit Subcommittee attempted to meet on May 31st, but did not have a Quorum. The Audit Subcommittee met again this afternoon, June 28th and reviewed the 3rd Quarter Financials for period ended April 30, 2017, the recommended Proposed 2017/18 Administrative Budget, heard recommendations on the Rate of Assessment and approved line item adjustment authority. Due to time constraints and additional discussion needed, no motion is being recommended from the Audit Subcommittee, but is being stated in the form of a motion to help with discussion. Moved by Mr. J. Jue, seconded by Mr. B. Kriebel to recommend an Administrative Budget

for the 2017/18 crop year in the amount of $5,237,928 together with a reserve for contingencies of $0.00 for a total of $5,237,928 and a rate of assessment of $17.00 per ton on all free tonnage standard raisins acquired by handlers during the crop year estimated at 282,000 assessable tons, and including an organic tonnage of 18,000 tons with an assessment rate of $4.00 per ton. Noting that any deficit in the 2017/18 Administrative Budget will be covered using 50% Carryover Fund (limited to General & Administrative expenses only – salaries/wages) and 50% Unallocated Fund (marketing funds – MIP) (attached).

5

Mr. J. Jue stated that with the recommended budget there would be a shortfall of approximately $400,000 without raising the assessment an additional $1.32 per ton. Management has recommended that the shortfall be taken from two separate accounts – the Carryover Fund (handler assessment, restricted to G&A expenses), and the Unallocated Fund (unrestricted money). Mr. M. Mikaelian stated that between the two accounts there is approximately $3 million dollars, which one account has restrictions on how we can spend it, and the other account has no restrictions. It would be better to use the Carryover Fund (restricted funds) first, leaving us with an account (Unallocated Fund) that has freedom to use without restrictions. Moved by Mr. M. Mikaelian, seconded by Mr. M. Sangha to amend the motion to take

100% of any deficit from the Carryover Fund, and nothing from the Unallocated Fund. Discussion continued about which account would be appropriate to pull from, including raising the assessment to cover the deficit amount. Mr. B. Kriebel stated that the use of both accounts is a reasonable approach. He reminded the Body that the rulemaking allowed the RAC to build up a Carryover Fund in the event there was a short crop, and that the cap limit has not been met yet. Mr. B. Kriebel stated that an increase in the assessment is not necessary at this time as we have the Carryover Fund to pull from. Mr. M. Mikaelian commented that at any time we could move money from the Unallocated Fund into the Carryover Fund. Noting that it makes more sense to initially use the money that is restricted on how to use it and keep more money in the fund that can be used unrestricted. Ms. M. Stobbe reminded the Body that the Unallocated Fund could be used at any time as long as enough funds remained to cover the Uncashed Grower Checks over the next 6 years. Mr. J. Jue commented that the Carryover Fund was set up so that the RAC would have money available in the event there is not enough crop assessment to keep the RAC running. Speaking against the amendment, Mr. J. Jue stated that the Carryover Fund is not fully funded and that taking it out of both funds is a good compromise. Mr. M. Schutz commented that the Carryover Fund was a “rainy day fund” to be used in the case of a short crop, but that is not the case here, this is a new budget that is already in a deficit. Mr. M. Schutz stated that Management has done a good job this crop year to not end in a deficit budget, but to go into a new crop year knowing there is a deficit that be taken care by just increasing the assessment $2 or $3 is something that should be considered. Ms. LK. Abdulian asked what is the issue if the assessment is raised by $1.00. Ms. LK. Abdulian commented that she doesn’t see people planting vines, but pulling out vines and every year will be a shorter crop which will run into a deficit year after year. Mr. S. Kister also reminded the group that organic tonnage plays into the calculation as well for the assessments ($4/ton). We may have to think how the whole thing is funded depending on what happens with organic tonnage in the future. The amendment to the motion failed. The original motion carried with 1 No vote by Ms. LK. Abdulian.

6

ADMINISTRATIVE ISSUES SUBCOMMITTEE REPORT

Mr. J. Marthedal reported that the Administrative Issues Subcommittee met earlier today (6/28/17) and reviewed the 2017/18 Bin Rental Agreement, 2017/18 e-Compliance Plan and heard a report from the Grades & Standards Workgroup. Moved by Mr. J. Marthedal, seconded by Mr. J. Jue to approve the Bin Rental Agreement

for the 2017/18 crop year, as presented by staff (attached). The motion carried unanimously. Moved by Mr. J. Marthedal, seconded by Mr. B. Kriebel to approve and submit the e-

Compliance Plan for the 2017/18 crop year, as presented, to USDA for approval, and to give staff authority to make minor changes, if needed (attached).

The motion carried unanimously. Mr. J. Marthedal restated the report given at the Administrative Issues Subcommittee meeting, stating the Grades & Standards workgroup met on May 10th and June 6th to discuss revising the current Grades & Standards for Seedless Raisins to be more reflective of how much the industry has evolved in recent years. After some discussion, the workgroup agreed to revise the Grades & Standards for Packed Seedless Raisins by eliminating the current Grade C for Packed Seedless Raisins in its entirety and to reduce the standard for capstems under Grade B from 25 to 20. Moved by Mr. J. Marthedal, seconded by Mr. V. Sahatdjian to refer the proposed changes

on the Grades & Standards back to the Grades & Standards Workgroup for further discussion. All members/alternates and packers are invited and encouraged to attend and participate.

Discussion followed that it appears the Body has no issues with the Grade B capstem proposal. The issue needing further discussion is the elimination of Grade C (outgoing). The motion carried with 1 No Vote by Mr. G. Chooljian.

PERSONNEL SUBCOMMITTEE REPORT Mr. M. Mikaelian reported that the Personnel Subcommittee met on June 14, 2017. The President/General Manager reported the RAC’s 125 plan has changed ownership. The Personnel Subcommittee approved the 2017/18 RAC/CRMB Shared Staffing Percentages, as presented by the President, and approved wage & salary increases for staff and the President. Mr. M. Mikaelian stated that the Personnel Subcommittee also recommends approval of the request for continuation of outside counsel for personnel issues. Moved by Mr. M. Mikaelian, seconded by Mr. J. Jue to request authority from USDA for

RAC to continue to retain outside legal counsel for personnel matters, if needed during the 2017/18 crop year, with expenses not to exceed $15,000.

The motion carried unanimously.

UNCLAIMED GROWER EQUITY FUNDS The Raisin Administrative Committee (RAC) has unclaimed grower equity funds from the 2009 Crop Year’s Reserve Raisin Pools. The following entities listed below have unclaimed funds. All claimants must provide identification and certify that they are the person authorized to collect the funds. If you have any questions, please contact Kevin Cohoon at the RAC office at (559) 225-0520. You may also visit the RAC’s website (www.raisins.org) for additional information.

F:\Shared\KEVIN\2009 grower checks\Grower Check Ad - Bus Journal-2009 crop year 6-27-17.docx

Alfred Duran Ismael Madrigal Oglesby Farms Benny Baca J & J Farms Pat Patterson Berj Minasian Farm Jack Berg Phoebe Alegria Brent or Maria Ferreira * Jaime Perez Ren Barsoom Brian Botelho James Bingham Richard or Marjorie Winters Brian Ledesma John or Billie Gullian Robert Cho Bud Davis Ranch Jose and Carmen Jauregui Robert GonzalezDavid Song Joseph W. Cleary S.R. Botelho Dhamot Vineyard Juan Norberto Batiz Sal or Rachel MirandaDorothy or Lorie Salwasser Kor Khong, Lily Leng Ray, Lilly Kam Seak Ang Hor Dr. J. O. Jones Laura Hermann & Jennifer Lewis Sherrie Gullian E. Paul Ellberg Leonard and Olivia Silveira Shigeko Mori Edna Keener Leonel Flores Silveno Botelho Elviro Sanchez Les Scheidt Singh Farm Frank & Lena Rocha Revocable Trust Lillian Salwasser Trust Smith Bros. Freitas View Farms Lish Farms Partnership Stanley CoolidgeGary Banas Louis Gonzales Sukhpal s. Brar DBA B.S.M. Farms Gary H. and Elaine B. Ly Fong Warren Ihde Gerald Cho Manuel Monis William Kallio Gino or Geraldine Devecchio Matt Hobe Ranch Grace West Mellissa VoisantGriselda Gonzales Miguel VidalesI & N Atwal Farms (Peach Avenue Ranch) Mildred Runjavac

* Contact Made – waiting on paperwork

RECOMMENDATION RELATIVE TO 2017/2018 ADMINISTRATIVE BUDGET AND RATE OF ASSESSMENT

F:\Shared\MEETINGS 2\2016-2017 Meetings\6-28-17 (Audit, Admin, RAC)\Audit\2017-2018 Recommendation Admin. Budget.docx

WHEREAS, Section 989.79 of Raisin Order No. 989 requires the Committee to file, with the Secretary, a proposed budget of Administrative expenses likely to be incurred during the marketing year, together with the proposed rate of assessment; and WHEREAS, the Audit Subcommittee, at a meeting held on June 28, 2017, reviewed a proposed budget and a rate of assessment for the 2017/2018 crop year; and WHEREAS, each budgetary item was considered, keeping in mind the requirements of the Order and Administrative Rules and the need for proper functioning of the program; NOW, THEREFORE, BE IT RESOLVED, that the Audit Subcommittee does hereby recommend to the Raisin Administrative Committee a proposed Administrative Budget for the 2017/2018 crop year in the amount of $5,237,928 together with a reserve for contingencies of $0.00 for a total of $5,237,928 and a rate of assessment of $17.00 per ton on all free tonnage of standard raisins acquired by handlers during the crop year estimated at 282,000 assessable tons, and including an organic tonnage of 18,000 tons with an assessment rate of $4.00 per ton, as provided in Section 989.80 of said Marketing Order, and BE IT RESOLVED, that the Audit Subcommittee does hereby recommend to the Raisin Administrative Committee that in the event of a deficit in the 2017/2018 Administrative Budget, the deficit will be covered using 50% Carryover Fund (limited to G&A expenses only – salaries/wages) and 50% Unallocated Bin Fund (marketing funds – MIP). BE IT FURTHER RESOLVED, that this resolution be adopted subject to the approval of the Secretary.

OMB No. 0581-0178

RAC-71 (Rev. 5/2017) Destroy previous editions.

RAISIN ADMINISTRATIVE COMMITTEE 2445 Capitol Street, Suite 200 Fresno, California 93721 Phone: (559) 225-0520

RAC STORAGE BIN AGREEMENT Crop Year 2017

This Agreement applies to all Raisin Administrative Committee (RAC) storage bins that are: a) allocated to a packer based on reserve pool holdings; b) rented by the packer from the RAC; and/or c) stored by the packer for the RAC. In lieu of the compensation as provided for in § 989.66(f) of Marketing Order No. 989 (Order), and in § 989.401 of the Order’s rules and regulations, the RAC offers to supply, and the packer agrees to accept, two replacement RAC storage bins to the packer for each ton of reserve raisins held by the packer on August 1, 2017. A. Terms of Use for RAC Bins: 1. RAC storage bins will only be used to receive, handle, or store natural-condition, sun-dried California

raisins. 2. The packer will not release any RAC storage bins to its growers until the packer has signed and

returned a RAC Storage Bin Agreement to the RAC. 3. The packer commits to have all RAC Bins issued to its growers returned by March 31, to facilitate

inventory and repair of bins. 4. The packer commits to have all empty RAC bins, whether allocated for reserve storage, rented by the

packer or stored for the RAC, stacked segregated from all other bins to aid and assist the RAC in obtaining a complete RAC storage bin inventory.

5. The packer will notify RAC field staff of any RAC bins needing repair. 6. The packer will provide the RAC with a monthly accounting of its RAC bin inventory on the RAC

Bin Control Record (RAC-9) by the 7th of each month in accordance with reporting requirements. 7. The packer will assist RAC staff in conducting a physical inventory of its RAC bins prior to July 31. 8. The packer agrees to make RAC bins that are in excess of its reserve allocation and rental amount,

available for pick-up by other packers. Bins must be empty and clean. The packer will assist and cooperate with the RAC to allow for orderly and timely transfer of RAC bins to other packers. A packer experiencing any problem in these bin transfers should contact RAC field staff immediately.

9. The packer agrees to not charge the RAC any fees for RAC bins stored at the packer’s facility, and also agrees to assist or allow the RAC to pick up bins without any loading fees or other charges.

10. It will be the packer’s responsibility to pick up any RAC bins allocated for reserve storage or rented by the packer in excess of the packer’s inventory. Page 3 of this Agreement indicates the location(s) where RAC storage bins are to be picked up. The RAC will not be liable for paying any compensation resulting from the failure of the packer to pick up allocated RAC storage bins.

According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0581-0178. The time required to complete this information collection is estimated to average 5 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

OMB No. 0581-0178

RAC-71 (Rev. 5/2017) Destroy previous editions.

B. Allocation of Bins for Reserve Storage and/or Rental: 1. Allocation for Reserve Storage. RAC bins are first allocated to the packer to hold reserve raisins held

beyond the current crop year. The allocation is based on a per ton basis of two RAC bins for each ton of reserve raisins held as of August 1. Packers will be notified of their allocations by August 31, and advised as to which packer(s) their excess holdings have been allocated or where bins can be picked up if their current holdings are less than their allocation. If insufficient RAC bins are available to hold the total reserve pool obligation, each packer will be allocated bins on a pro rata basis in accordance with their reserve holdings in relation with the total reserve pool and will be paid a bin rental in accordance with § 989.401(c) of the Order for the bins needed to store reserve pool raisins in excess of the packer’s pro rata allocation.

2. Bins in excess of the reserve pool obligation will be available for rent at the current rate established by the Committee and will be allocated on the basis of each packer’s acquisitions.

C. Payments and Charges 1. The RAC will compensate the packer for reserve storage bins required in excess of the available RAC

bin allocation (RAC Bin Deficiency) in accordance with § 989.401(c) of the Order at a rate of 20 cents per bin per day to a maximum of $10 per bin per year. Payment will be made as soon as practicable after January 31, in accordance with § 989.66(f) of the Order.

2. The packer will compensate the RAC at $10 per bin per year for any bins available that such packer elects to rent from the RAC. Rental payments will be due within 10 days of invoice, with interest assessed at prime rate plus 2% for late payment. The packer authorizes the RAC to deduct any unpaid bin and interest charges from any RAC payments due the packer after January 31.

3. A packer who does not make excess RAC bins available upon request of the RAC will be subject to a $20 fee per bin.

4. The packer may be charged $4 per bin for any bin delivered for the RAC that is not empty and clean. 5. The packer may be charged up to $50 per bin for RAC bins that are lost or not returned by the

handlers, or for any bins that are damaged beyond normal repair. 6. The RAC may deny use or rental of bins to any packer, or may require a bond or advance payment on

bins when: bin payments are chronically late or in arrears from a prior year; bins have been improperly used; required bin reports are not submitted; or reasonable custodial care of bins has not been afforded by the packer.

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident. Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA’s TARGET Center at (202) 720-2600 (voice and TTY) or contact USDA through the Federal Relay Service at (800) 877-8339. Additionally, program information may be made available in languages other than English. To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at http://www.ascr.usda.gov/complaint_filing_cust.html and at any USDA office or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to USDA by: (1) mail: U.S. Department of Agriculture Office of the Assistant Secretary for Civil Rights 1400 Independence Avenue, SW Washington, D.C. 20250-9410; (2) fax: (202) 690-7442; or (3) email: program.intake@usda.gov. USDA is an equal opportunity provider, employer, and lender.

2017-2018 e-Compliance Plan Changes

2c. Committee response reworded for improved clarity.

2a. “AMS” and “Agricultural Marketing Service” removed.

5. Subsections have been re-order in this year template as follows:

• 5b. The question regarding the control over the processing of deposit was part of the main section of question 5 in last year’s version of the e-Compliance plan.

• Question 5d has been reworded; any references to late payment fees or interest charges have been replaced with wording regarding the filing of quarterly assessment invoices and late notices.

• Question 5e now refers to how many days past due invoices need to be before the first past due notice is issued. In 2016-2017 version, question 5e referred to how many days past due before the second notice is issued.

• Question 5f is now question 5e from the 2016-2017 version.

• Question 5g replaces question 5d in the 2016-2017 version.

• Question 5h has been added for 2017-2018, the question addresses collection efforts used by the Committee on delinquent accounts

• 5i has been added for 2017-2018; asks when the Committee will refer delinquent account to the Marketing Field Office (MFO) for additional action.

8a. Committee response reworded for clarification.

8c. Reworded to indicate that no deficiencies were reported by the Committee auditors for the 2015-2016 crop year.

9b. Indicates that we no longer are using MBS as contractor to perform management functions.

9c. Replaces question 9b from 2016-2017 version. All references to Bob Epperson replaced with Jeff Jue.

9d. This question was included in 9b in the 2016-2017 version.

9e. This question was included in 9b in the 2016-2017 version.

9f. This question was included in 9b in the 2016-2017 version.

9g. This question replaces question 9c in the 2016-2017 version.

9h. This question replaces question 9d in the 2016 -2017 version.

9i. This is new question in 2017-2018; asks if the maturity of all investments made by the Committee are less than one year.

9j. This is new question in 2017-2018; asks if all Committee cash accounts are insured with the FDIC.

9k. Replaces question 9h from 2016-2017 version.

9l. Addresses when the Committee Internal Controls were last updated.

For your convenience, you may copy and paste into this document.

2017 -

e-Compliance Plan

Full name of Marketing Program

Marketing Order No.

1. Sending information to handlers annually reminding them of their regulatory,reporting, and record keeping responsibilities.a. Please list the types of documents that will be sent to handlers reminding them of theirregulatory and reporting requirements during the crop year.

b. Regulatory requirements will be sent on or around:

(e.g., methods: regular mail, e-mail, facsimile, hand-delivered; and confirmation: a mailing log, certified return receipts, e-mail return receipts, facsimile transmission logs, etc.)

(e.g., September 1, August 1, etc.)c. Please describe what methods will be used to send regulatory requirements and amendmentsto handlers andwhat form of documentation will be used to confirm whether the requirements have been sent to all handlers.

(e.g., marketing order, current regulations, specific handler reports, etc.)

Revised 04/2016 1

2. Identify and visit handlers to discuss regulatory requirements (e.g. record keeping, reporting, assessments, volume and/or disposition) observe handling operations, and monitor compliance with marketing order provisions.a. How does the marketing program learn of new or potentially new handlers? When willregulatory and/or reporting requirements be discussed with new or potentially new handlers? How will the discussions be documented?

(e.g., a new handler typically calls to say s/he intends to begin operating as a handler; regulatory requirments are discussed with the new handler as soon as the program learns of the handler's intent to operate, and these discussions are documented in the form of a memorandum of discussion)

b. When will regulatory and/or reporting requirements be discussed with all handlers? How willthese discussions be documented? (Activity 2.f. specifically refers to handler audits.)

(e.g., as needed during the season, such as when a report is not received or is not properly completed and the discussions are documented in the form of memorandum of discussions)

d.Amendments will be sent to handlers:

Revised 04/2016 2

c. Will a representative of the marketing program periodically visit handlers to observe their

Yes No A waiver has been approved d. If so, what types of activities will be observed during these periodic visits at handlers'

of handlers this

e. If less than 1/3 of all handlers will be visited, what percentage of the total volume of productionwill those handlers that will be visited represent?

(e.g., enter .25 for 25%)

(Date waiver approved)

operations? How often will these visits take place? How will these visits be documented? Please explain below:(Activity 2.f. specifically refers to handler audits.)

operations?

(e.g., observes where failing products are going; visits handlers weekly; keeps a memorandum of visit)

will visit(e.g., Committee Manager, Compliance Officer, etc.) crop year.

(e.g., enter .25 for 25%)

Revised 04/2016 3

3. Receive, investigate, document and report to the Marketing Field Office (MFO),complaints of violations of market program provisions.

a. As a complaint is received, the complaint is assessed and action is taken, if needed,

(e.g. , complaints are usually received from other handlers; committee investigates complaints by visiting the handler, reviewing handler documents and contacting third parties; all documentation is kept in complaint files by handler including any communications between the Committee and the handler)

f.

of handlers will be audited this crop year. (e.g., .25 for 25%)

(e.g., handler audit files are filed by year and then by handler, all handlers will be visited within an audit cycle of four years.)

Are handlers audited and how will the audits be documented?

immediately upon receipt of the complaint. Please explain how complaints are received. Additionally, please describe how the marketing program will investigate and substantiate a potential marketing order violation, including how it will be documented.

Revised 04/2016 4

4. Check handler reports for completeness, accuracy and timeliness.a. Please list all of the reports the marketing program anticipates receiving from handlers and

third parties, including from inspection stations, this coming crop year. Also, please provide when each report is due or is usually received.

(e.g., special purpose shipment reports - 9/1, note sheets, - daily, etc.)

b. Please describe the process of sending a case referral report to the MFO after a complaint hasbeen substantiated:

(e.g., a follow-up action will be sent to the MFO as a case referral report immediately after substantiating the violation.

Revised 04/2016 5

c. Please explain how the marketing program will check its reports that are received fromhandlers for accuracy.

(e.g., handler reports are reconciled with incoming and outgoing inspection certificates)

d. If changes or corrections will be necessary to a report, please explain how authorizationby the handler to make the necessary changes or corrections will be obtained and documented. If handlers are required to resubmit their handler reports, please explain how the handlers will be contacted.

(e.g., authorization is conducted by a confirmation letter, facsimile, e-mail or phone call from the handler, etc.)

b. The marketing program should be able to determine when a report was received and shouldreview reports in a timely manner after receipt. Please describe how the program will determine if reports are received when due? Also, please describe how the program ensures reports are reviewed in a timely manner. In addition, what actions will the program take with handlers that have missing reports?

(e.g., date-stamping reports upon receipts, data entry the same day received, electronic dates; after three unsuccessful attempts by phone, visit and letter to obtain a handler report, the program will document the attempts and report the violation to the MFO in the form of a case referral report.)

Revised 04/2016 6

5. Monitor handler payments of assessments.a. Please explain how handler assessments will be determined below:

b. Will the marketing program have controls in place over processing deposits (accountsYes No

c. Handler assessments will be billed on a

d. Copies of invoices and past due notices will be retained in files by:

e. The first past due notice will be sent to handlers

g.Will the marketing program charge a late payment fee and/or interest rate on delinquent accounts?

(e.g., inspection certificates, handler reports, etc.)

(e.g., quarterly, etc.)basis.

(e.g., handler, month, quarter, etc.)

f. The second past due notice will be sent to handlers days after the invoice date.

receivables)?

days after the invoice date. (e.g., .25 for 25%)

Yes No If Yes, please describe late payment fee and/or interest rate on delinquent accounts below:

(e.g., 30, 60, etc.)

Revised 04/2016 7

h. Will the marketing program take any further actions in attempting to collect past dueassessments fromhandlers (e.g., phone call or visit) before referring the action to the MFO?

Yes No If yes, please explain below:

i. At days, delinquent accounts will be referred to the MFO for appropriate action. (e.g., 65, 90, etc.)

6. Monitor compliance through inspection stations, disposition of exempt, special

a. Will the marketing program monitor any waivers of inspections for handlers?Yes No If Yes or No, please explain below:

(e.g., reviewing the waiver application for a handler and ensuring that the handler is in compliance.)

b. Will the marketing program monitor an export program under the marketing order?Yes No N/A If Yes or No, explain below:

(e.g., determining whether there are discrepancies between the amounts reported by the handler, USDA inspectors, and/or shipping reports)

purpose shipments, restricted, substandard, off grade, other failing, and/or residual commodities using handler reports.

N/A

Revised 04/2016 8

c. Will the marketing program monitor handlers that conduct special purpose shipments?Yes No N/A

(e.g., reconciling handlers' reports to the receivers' copies of the special purpose shipment reports submitted to the Committee)

d. Will the marketing program monitor the disposition of off-grade and/or other failing products?Yes No N/A If Yes or No, please explain below:

If Yes or No, please explain below:

(e.g., using surveillance to ensure failed product is used in only approved outlets)

e. Will the marketing program contact third parties, which includes inspection stations, on a

(e.g., contacting buyers, consignees, brokers, retailers, terminal markets, road guard stations, etc.)

Yes No N/A If Yes or No, please explain below: spot-check basis to monitor compliance with marketing order and/or inspection requirements?

Revised 04/2016 9

7. Other Compliance Activitesa.Please list any additional compliance activities that will be monitored by the program andhave not been discussed previously. Also, please discuss how these activities will be documented.

b. Please list any sections or provisions of the program's marketing order that will not be ineffect for the upcoming crop year. Additionally, please list any new marketing order activities that are anticipated that will go into effect.

(e.g., diversion program will not be in effect for this crop year, export program may be in effect sometime during this crop year, etc.)

8.

(e.g., CPA will provide a written report in person at the December committee meeting; CPA will participate in a video conference at their April meeting; or CPA will provide report to the Audit Subcommittee who will report to the Committee at the May meeting.)

(e.g., reserves, inventories, diversion programs, controlled buys, etc.)

Financial Audit PoliciesPlease explain the process of your Certified Public Accountant (CPA) presenting the annual

written report findings below:a.

Revised 04/2016 10

c. If the marketing program had any audit deficiencies from the prior year audit, please describe

b. Will the marketing program have its audits conducted in accordance with GovernmentAuditing Standards (GAGAS -The Yellow Book)? You may visit: http://www.gao.gov/govaud/ybk01.htm for further information.

Yes No A waiver has been approved.

Yes No N/A

(e.g., MAP, TASC, FSMIP. Please do not include specialty crop grants from state departments of agriculture.)

d. Does the marketing program receive any federal grant funds? If so, please describe the

how the marketing program resolved the deficiencies below. If deficiencies have not been resolved, please explain how the marketing program intends to do so.

(Date waiver approved)

funds below:

Revised 04/2016 11

9. Internal Control Policies

a. Will the program's management segregate duties among its staff members (e.g., will one staffmember handle the accounts receivable and another handle accounts payable?

Yes No If not, how many staff members* do you have?

Yes NoIf so, what is the name of the independent contractor or organization that the program will

c. What are the names and e-mail addresses of the program officers (Chairperson, Vice-Chairperson, Treasurer, and Secretary)?

(Name(s) and e-mail address(es))

Treasurer(Name and e-mail address)

Secretary(Name and e-mail address)

(Name and e-mail address)

*Please note that the term "staff members" used throughout this plan means employees,as well as individuals, who are employed by an organization that provides administrative services to the program on a contract/agreement basis.

b. Will the program use an independent contractor or some other type of organization toperform its management and/or administrative services?

Assistant Treasurer

be using?

(Name(s), position(s) and e-mail address(es))

(Name(s) and e-mail address(es)) Vice Chairperson(s)

(Name(s), position(s) and e-mail address(es)) Other officer positions

Chairperson(s)

Assistant Secretary(s)

(If Applicable)

Revised 04/2016 12

f. Is the Audit Subcommittee Chairperson a member or alternate on the program Committee/Board?

Yes No N/A if there is no Audit Subcommitteeg. Will the program commingle federal funds with any other funds? If a clearning account

Yes Noh. Will the program comply with Agricultural Marketing Service (AMS) Directive 2210.2Investment of Public Funds? Upon request, you may receive a copy of the policies from MOAD Compliance and Enforcement Branch.

Yes No

is used to split dual payments of assessments, the program may mark "No".

d. Are any of the above officers (including assistant officers) a manager or staff memberNo

e. Who is the Chairperson of the Audit Subcommittee? If not applicable, please state N/A below:

of the program? Yes If so, please identify officers(s) below:

j. Are all accounts at financial institutions members of Federal Deposit Insurance

k.Are all funds in seperate accounts which are covered by the FDIC limit for each bank (standardcoverage up to $250,000), or collateralized for any funds in excess of the FDIC limit?

l. Please state when the marketing program's last internal control policies review and approval

Date

Corporation (FDIC)? Yes No If No, please explain below:

Yes No

i. Are all investments of a maturity period of one year or less, risk free, and interest bearing?Yes No If No, please explain:

Revised 04/2016 13

took place:

o. Will a duplicate copy of the monthly bank statements be sent directly to an officer of theprogram or will they have electronic viewing access? (If the program's annual revenue exceeds $500,000, this activity is mandatory.) Please provide explanation below:

p. Will the marketing program replace a manager's signature with a facsimile signature or rubberstamp on checks? Yes No

*10. Operational ControlsPlease note "appropriate management" should be the next higher level of management. For example, if a manager of a program is the same person who is preparing the vendors invoices for payment or is doing the bank reconciliations, then the manager would need to get an officer of the program to approve those transactions. In other instances, appropriate management can be the Manager or the President of the program.

q. Explain the procedures to hire qualified and experienced personnel:

m. Has the program changed financial institutions in the last year? Yes No If Yes, please provide the name of the new institution and date of change:

n. Will you inform MFO if there is a change in financial institutions in the future? Yes No

a.

Yes Nob. Do all deposit slips omit handler identifiable information?

d. Will bank statements be attached to bank reconciliations before being approved by aCommittee Officer? (e.g.,Committee Treasurer) Yes No

c. *Will vendors invoices be reviewed and approved by appropriate management prior to being approved by management? Yes No

Will checks received for payment of assessments be restrictively endorsed "For Deposit Only"? Yes No

Revised 04/2016 14

e. Please provide the names of those individuals who are authorized users of credit cards. Also,please provide the type and number of credit cards that have been issued to each of the individuals. If not applicable, please state N/A below:(e.g., John Smith - 1 Visa, 1 Exxon; Mary Jones - 1 Visa, etc.)

f. *Will appropriate management review and approve credit card statement before statements are paid? Yes No N/A

Revised 04/2016 15

Yes No N/Ag. *Will travel expenditures be approved by appropriate management?

h. All marketing program checks must be signed by two individuals. Who are the two primarysigners of the marketing program's checks? Please provide their names and titles, and indicate whether they are an employee, officer or contractor of the program below.

Employee Officer Contractor/Organization

Employee Officer Contractor/Organization

i. How often is petty cash reconciled?

j. Please describe how petty cash is reconciled and how the reconciliation is documented

k. Please describe how petty cash and/or postage is handled and kept secure below:

(e.g. montly, quarterly, etc.)

below:

Revised 04/2016 16

11. Confidential Informationa. Under Section 608d(2) of the Agricultural Marketing Agreement Act of 1937, all informationfurnished to or acquired by the USDA for marketing programs categorized as trade secrets and financial commercial or information shall be kept confidential by all USDA officers and employees. These individuals may disclose such information only in a suit or administrative hearing brought at the direction, or upon the request of the USDA. Because marketing programs are quasi-governmental entities, this regulation applies to marketing program management. Will the marketing program staff protect personal, commercial, financial, and employment information from an unauthorized disclosure? Will the marketing program have appropriate computer controls in place that are adequate for the size of the program (e.g., password protection to log onto network, automatic logging off after 10 minutes, use of password protected files, etc.)?b. Please explain the marketing programs security protocol to protect confidential information

c. Personally Identifiable Information (PII) can be used to distinguish or trace an individual'sidentity. It includes, among other things, the use of names, social security numbers or financial information associated with an individual. PII also includes data that, when combined with other identifying information, can be linked to a specific individual. Will the marketing program protect PII from an unauthorized disclosure? Yes No

Yes No

d. Are you following retention schedule in the MOAD Operations Manual? Yes Noe. Where are records stored? How does staff dispose of records past retention?

below:

(e.g., stored off-site, shredded, etc.)

Revised 04/2016 17

f.. If you wish to explain or clarify your answer to any of the previous questions, please use thetextbox below. Begin by identifying the question or item number, for example: Item 2.c, Item 10. k, etc.

Revised 04/2016 18

I,Name and Title

of the

Full Name of Marketing Program

the foregoing compliance plan was approved by Committe or Board members on:

,

,

Required: By checking this box, I certify that the foregoing compliance plan reflects, to the

Name Date

My e-mail address is:

Only complete below this line if you are resubmitting your e-Compliance Plan.Resubmitted for approval on: by

by

by

by

Resubmitted for approval on:

Resubmitted for approval on:

Resubmitted for approval on:Name

Name

Name

Name

Date

Date

Date

Date

Date

best of my knowledge, the marketing program's compliance strategies, resources and activities for the upcoming marketing season.

certify that

Marketing Program Representative Certification Instructions for Marketing Program:

Please complete this certification page. Once completed please e-mail this file as an attachment to your Marketing Field Office Specialist for approval.

Revised 04/2016 19

Marketing Specialist CertificationMarketing Field Office

Instructions for Marketing Field Office Specialist: Please complete this certification page. If the e-Compliance Plan is not approved, please e-mail it back to the marketing program for revisions. If the e-Compliance Plan is recommended for approval, please e-mail it to the Compliance Enforcement Branch Chief at Headquarters. The e-Compliance Plan will then be assigned to a Compliance and Enforcement Specialist for review.

Recommended for approval

Returned for revisions

Received on:

See comments below:

I, , Marketing Specialist at the

, certify that I have reviewed

the foregoing marketing program's complaince plan on this day

See comments below:

Name

Field Office Location

Date

Recommended for approval

Returned for revisions

Revised 04/2016 20

Compliance and Enforcement Specialist Certification Headquarters

Instructions for Compliance and Enforcement Specialist: Please complete the following certification. Once completed, please e-mail this either to the Field Office Marketing Specialist if returned for revisions (the Field Office will forward to the marketing program for revision) or to the Compliance and Enforcement Branch Chief for approval.

I, , Compliance and Enforcement Specialist Name

Recommended for approval

Returned for revisionsSee comments below:

Received on:

Returned for revisions See comments below:

Date Received on:

Recommended for approvalDate

Revised 04/2016 21

certify that I have reviewed the foregoing marketing program's compliance plan on this day

Date .

Compliance and Enforcement Branch Chief Headquarters

FINAL APPROVAL

I, , Compliance and Enforcement Branch Chief

certify that I have reviewed the foregoing marketing program's compliance plan on this dayName

Date

See comments below:

Received on: Date

Approved

Rejected for revisions

See comments below:

Date Received on:

Approved

Rejected for revisions

Revised 04/2016 22

.