The California Walnut Board (CWB) is pursuing credit-back authority. The USDA recently published the Secretary’s decision in this regard and has ordered a referendum vote of the growers. This authority will allow for handlers to receive a credit-back for eligible marketing expenditures of 70 cents for every dollar in spend. This important authority is one of the ways the CWB is modernizing the Order to make it work harder for industry, using every possible tool available to spur new investment in new product development/marketing initiatives to continue growing walnut consumption.
What is Credit-Back Authority?
- Credit-back is an authority that several agricultural commodities (almonds, prunes, etc.) use to allow handlers to conduct eligible marketing activities in return for a partial credit/rebate on assessments.
- The CWB does not currently have this authority in the marketing order; therefore, formal rule making has been undertaken to add the authority to the order.
Objective/Purpose of the Program
- Objective of the program – effectively promote the sale, use and consumption of California walnuts
- Purpose – to encourage handler market promotion in addition to the CWB’s generic marketing efforts
- The credit-back authority, once approved, will be in the Order, whether industry chooses to use or not.
- Program authorization to spend will be determined on an annualized basis in conjunction with fiscal budgeting.
- Determining available dollars for the crop year will be based on percent of budgeted assessment revenue.
- Each handler’s share of available dollars to be based on prior year crop acquisitions.
- Credit-back will be .70 cents per $1 of spend on eligible marketing & promotional activities.
What are the rules & requirements?
- Credit-back requires California Walnuts wording and/or handler name with the word “walnut(s)” to be eligible.
- Credit-back is not intended for use with private label/third-party products. Activities containing other nuts and/or fruits, etc., would receive credit-back based on the proportionate share of walnuts included.
- Walnuts used as an ingredient in manufactured food products would receive credit-back based on the proportionate share of walnuts included.
- Complete rules, regulations and eligible/ineligible activities are defined in the Credit-back Guide.
What are the impacts to the Board?
- To be funded from prevailing assessments, likely reduction in domestic program, given this is the largest area of CWB spend.
- Available dollars for the crop year to be based on percent of budgeted assessment revenue; CWB Executive Committee to make a recommendation to the Board annually.
- Similar programs have credit-back in the range of 10%-15% of assessments.
- Staffing implications to be determined based on the breadth and depth of the program.
More information regarding this referendum can be found on the Federal register.