ABC 12 CA Almonds Agency Agreement - Disposition of Reserve to

OMB No. 0581-0178
ABC Form 12

ALMOND BOARD OF CALIFORNIA

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AGENCY AGREEMENT - DISPOSmON OF RESERVE
TO NONCOMPETITIVE OUTLETS
REVISED 3/6/00

TEnS AGREEMENf, made this

day of

~

between

the Almond Board of California, hereinafter referred to as "Board", and
a handler of a~onds, hereinafter referred to as "Agent", WITNESSETH
that:
WHEREAS, §981.66 oftheOtder of the Secretazy of Agriculture regulating 1he handling
of almonds grown in California, hereinafter refeITedto as.thc "Order", authorizes thc.Board to
dispose of reserve almonds in noncompetitive outlets; and

WHEREAS, §981.67 of the Order permits handlers of almonds to become agents of the
Board in such disposal; and
WHEREAS, Agent as a handler of almonds is subject to the provisions of the Order and
has requeste~ authority to act as agent of the Board in the disposition of reserve of almonds; and
WHEREAS. timely information on Agent's intentio~ to dispose and dispositions of
almonds into noncompetitive outlets is necessary for effective administration of the reserve and
for future marketing policy detennination of the Board;

_

--.

......

NOW THEREFORE IT IS AGREED BY AND BETWEEN the parties as follows:
1'. - General

(a)

, Subject to the provisiops of §981.66 of the Order and the regulations applicable to the
crop year, Agent is hereby authorized on behalf of the Board to dispose of reserve
almonds held or acquired by Agent and which are subject to the Board's disposal
authority. Such disposition shall conform with such inspection, certification, and
other disposition terms and conditions as the Board may herein prescribe or from time
to time specify, and shall be subject to the limitations placed on the Board's disposal
authority for the crop year.

(b)

Agent agrees that there shall be no obligation on the part of the Board with respect to
any expenses. commitments, or damages arising out of any agreement between Agent
and other person relative to the disposition of reserve almonds or of salable almonds
fot' which credit against a reserve obligation is desired.

(c)

Board agrees that if at any time the dispositions by agent exceed agent's reserve
obligation and the excess ~ust be classified as salable, a portion or all such excess
may be credited as reserve to cover an increase in Agent's reserve obligation or a
transfer to another handler but only if the disposition of such salable tonnage has
complied with the requirements for reserve disposition.

(d)

Agent agrees that no reserve almonds will be sold OTdelivered to any outlets or
geographic locations where Board representatives OTFederal-State Inspection Service
or Canadian government officials would be: restricted. for any reason, from
verifying reserve almonds. products made ftom reserve almonds or records pertaining
to reserve dispositions.

2. Geo~Dhic Limitations/Other Safesruards
Agent agrees that all reserve almonds shall be disposed of as follows:
(a)

Almonds for human consumption as almonds, almond buner. schoollunGh programs.
etc., shall be manufactured and/or packed in the 48 contiguous UDited Statess
however, almonds may be shipped to Canada for manufacturing into almond
butter.

(b)

Almonds used in the manufacture of almond oil shall be crushed only in Califo,mia.
Sale of such almonds shall be direct from agent to oil manufacturer.

(c)

Almonds for poultry or animal feed shall be sold only to feed manufacturers or
commercial feed distributors licensed by California Department of Food and
Agriculture, Division of Inspection Services. Agricultural Comm<>dities and
Regulatory Services and currently hold valid licenses. Such almonds shall be ground
under the direct supervision of the Almond Board, at Board's option.

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(d)

Almonds sold to school lunch and other governmental uses, and to charitable
institutions for charitable puzposes shall be sold for use in the United States.

3. Eli~ble Outlets
(a)

School Lunch and other GovemmentalUses
Individual handlers may participate on a competitive bid basis if USDA implements a
school purchase program. In addition, handlers may work with local school districtst
colleges, and universities to promote the sal~ of reserve almonds in the school lunch
program at State and National levels.

(b)

Almond oil

(c)

Almond butter
Almond butter is defined in §981.466 as a corp.mmuted food product prepared by
grinding shelled or blanched almonds into a homogeneous plastic or semiMplastic
mass or liquid having,very few particles larger than lIi6 inch in any dimension. To
produce chunky style almond butter, amond chunks or pieces may be added up to a
maximum of 25% by weight of the finished product The size of the almond pieces
used to make chunky style almond butter may not exceed 5/16 inch in any dimension.

(d)

Charitable Institutions for Charitable PUIposes
Eligible organizations are as described in §170(c) of the Internal Revenue Service
Code.

(e)

Certified Organic Almonds
Almonds grown and certified as organict delivered to handlers and sold as certified.
organic almonds, would .satisfy reserve requirements for the 1999/2000 crop year.
These almonds must be certified by an organic certification organization currently
registered.with the California Department of Food and Agriculture, or registered with
the California Department of Food and Agricultme and complying wi th California
Health and Safety Code §26569.11 to §26569.17. Those handlers wishing to dispose
of reserve through this outlet must provide to the Board proof that all almonds sold as
part of their reserve meet the requirements of certified organic almonds. They would
also have to provide documentation to the Board gi'Vingthe name, address, and phone
number of the buyer.

Handlers transferring or receiving transfers of certified organic almonds via
interhandlertransfers may only conductsuch transactionswith handlers that handle
on1ycertifiedorganicallygrownalmonds.

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(1)

To be eligible to utilize this as a dispositionoutlet, the agent must handle
only certifiedorganicallygrownalmonds.

(2)

Transferor receipt of reserve obligationor reserve credits accumulatedby
.

disposition through this outlet is limited to handlers identified in 3(e)(1)

above.
(f)

OtherAporovedReserveOutlets
As specified in §981.66, additional noncompetitiveoutlets may be added by the
Board as developed.

4. Grade Requirements for Disposition
(a)

Reserve almonds used for human consumption purposes as almonds or amond butter
shall be U.S No. 1 pieces or better as defined in U.S Standards for Grades for Shelled
Almonds (7 C.F.R. 51.2105 - 51.2132).
BASIC REQUIREMENTS
(1)

Shall not contain serious damage by decay, rancidity, insect injury, or
mold.

(2)

Shall not contain foreign material.

(3)

Blanched whole almonds and pieces of almonds shall not be damaged by
adhering skin. Whole almonds shall be damaged whenpeUicle is adhering
to an area more than y..inch in the aggregate and pieces shall be damaged
when pellicle is adhering to an area of more than 10 percent of the total
surface area of the piece.

(4)

Shallbe well dried and cleanmeaningkernelsshallbe firm and brittle, not
pliable or leathery,and shall be practicallyfree from dirt or other foreign
substancesexclusiveof salt, flavoringsor othersuch additives.

(5)

Shall be free from the following other defects:

(A)

Gum, when a film of shiny resinous-appearingsubstance covers
morethan W' in diameter;

(B)

Shriveling, when a kernel is excessively thin for its size or when
materially withered, shrunken, leathery, tough or only partially
developed, provided that partially developed kernels arc not

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considered defects if more than % of the pellicle is filled with
meat;
(C)

Brown spot on the kernel, either single or multiple, when the
affected area aggregates more than a circle 1/8 inch diameter.

(6)

.

Minimum size shall be 8/64 inch in diameter.
TOLERANCES

(b)

(1)

3% for seriousdamageby decay,rancidity,insect injury, or mold.

(2)

0.2% for foreign material.

(3)

3% for adhering skin.

(4)

2% for kern~ls or pieces which .arenot well dried, not clean or are affected
by other defects.

(5)

5% for undersize kernels or pieces.

ReseIVe a1mon~ used for almond oil or poultry or animal feed shall receive credit
for only the percent of ediQlekernels contained in the delivery subject 10 minimum
edible kernel content as provided for in.§7(a) of this Agreement.

S. Inspection
All reserve almonds sball be inspected by the Federal-State ~spection Service at Agent's
expense as follows:

(a)

Almondbutter
(1)

Raw product
All resezve almonds to be used in the manufacture of almond butter shall
be certified as to quality by the Federal-State Inspection Service. This may
be either lot inspection or in-line inspection. Almonds from one lot
cenified as U.S. grade may be delivered in separate lots to one or more
manufacturers provided:
(A)

Each delivery shall be accompanied by a copy of the inspection
certificate and ABC Form 13/14.

s

- -

(B)

(2)

--- - -- -- --

At manufacturer's premises the Federal or Federal-State Inspection
Service shall certify that the almonds were received and made into
the product in the manner sp'ecifiCdin §5(f) of this Agreement.

Blanchedand manufacturedalmonds.
Grading standardshave been developedfor blanched and manufactured
almonds which will allow a handler to use manufactured stock already in
inventory, providing they are certified by the Federal-State Inspection
Service in accordance with the standards as specified in §4(a).

(3)

Shrinkage factor.
There may be a difference (shrinkage) betWeen actual kernel weight of
almonds received for manufacture into almond butter and tbe actual
weight of finished product. A loss factor of 6% will be allowed.

(b)

Reserve almonds sold to the governmentfor USDA school lunch programs and for
other 'governmentaluses shall meet the inspectioncriteria set "forthin terms of the
respectivegovenunentbid announcement.

(c)

Reserve almonds sold to charitable institutions for charitable purposes shall be
certified as to qualitYby the Federal-State Inspection Service, by either lot or in.line
inspection prior to delivery. Each delivery shall be. accompanied by an ABC Form
13/14.
'

Cd)

Almond oil- see §7(a) and (b) below.

(e)

Livestock and poulny feed see §1(a) and (b) below.

(f)

Federal or Federal-State Inspection Certification.
In order to complete the certification required by §§S(a)(l) and 5(b) of this
Agreement, the Federal or Federal-State Inspection Service must:

-

(1)

visit the packer or manufacturer's facility following receipt of almonds
and before processing to verify that the quantity of almonds reponed on
ABC Fonn 14 was received,

(2)

visit the packer or manufacturer's facility after processing -to verify the
quantity of finished product which the packer or manufacturer certified on
ABC Form 14 was made from the product received and observed under
,

(3)

§5(f)(1),and
issue a certificate to the packer or manufacturerattesting to what was
observed under §§5(f)(1) and 5(£)(2).

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'

(g)

Canadian certification procedure for almond.butter.
(1)

The Canadian government shall maintain a .list of manufacturers of
almond butter in Canada and shall certify such manufacturen on a
quarterly basis by issuing a certificate of approval and provide that

list to the USDA.

.

(2)

Only shipments to approved manufacturers
credit.

win be eligible for reserve

(3)

Approved manufacturers are reqnired to have an independent
chartered accountant audit their records to certify that reserve
almonds were processed into almond butter.

(4)

'The independent chartered accountant wi1l conduct a physical
examination of the manufacturers' inventory both before and after
processing to verifY that the quantity of almonds reported on ABC
Form 14 was received and to verify that the quantity of finisbed
produt wbich the manufacturer certified. on ABC Form 14 was made
from the product received and observed.

(5)

Approved manufacturen are required to complete the Mannfacturter
Certification on the ABC Form 14 (which accompanies the shipment).

(6)

Approved manufacturers are required to attach both the copy of tbe
quarterly certificate gf aDproval issued by the Tarif'fs and Market
Access Division (EAT), Department
of Foreign Affain
and
International Trade Canada and a copy of the chartered accountant's
verification of quantity of almonds received and manufactured into
butter to the ABC Form 13/14 (which accompanies. the shipment) and
submit them to the Almond Board.

.

6. MinimuniPrices
If established by the Secretary of Agriculture. minimum prices will apply to reserve almonds
diverted to eligible outlets except for almonds diverted to oil. feed. or charities. Agents will
be notified of any such minimum price schedule established.
7. Dual Credit (Reserve and inedibles)(a).

A lot of reserve almonds delivered to nonhuman consumption outlets must contain a
minimwn of 30% edible kernels in order to receive credit against a reserve
obligation. Each handler shall cause to be detenn.ined through the Fe deral-State
Inspection Service. and at handler expense, the percentage of edible and inedible
kernels in each lot at the time of disposition. Such inspected and certified lots will
permit a:handler to apply to the Board for full credit against his reserve obligation

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credit to nonhuman consumption outlets, reserve percentages are reduced, the
handlerhas the optionto apply any excessreservecredit to his inedible obligation.
Examples:

(b)

All for shipment to nonhuman consumption outlets;

(l)

A lot containing 30% edible kernels or more and up to 70% but not less
than 50% inedible kernels is eligible to receive both reserve and inedible
disposition credit according to the percentages in each outlet.

(2)

A lot containing 20% edible kernels and 9% inedible kernels - 29% total
meats is not eligible to receive reserve credit for the 20% edible mea~
and no inedible credit.

(3)

A lot containing 19% edible kernels and 31% inedible kernels - 50% total
meats - is eligible to receive inedible disposition credit for the 50% meat
content and no reserve credit.

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All almonds shall be inspected and certified by the inspection agency at the time of
disposition into an eligible outlet.

8. Disposition
Agent may dispose of authorized quantities and qualities of reserve almonds either directly or
through another agent following approval by the Board. All reserve dispositions made to
nonhuman consumption outlets pursuant to §§2(b) and (c) and 7(a) and (b) of this Agreement
shall be made. at the Board's option, under direct supervision of the Board. The Board shall
be notifi~d by the handler, at least 72 hours prior to disposition. Prior to making any
disposition of any reserve almonds, agent shall notifY Board of his intentions to dispose of

reserve almondson ABC Form 13.

.

Any of Agent's reserve almonds remaining unsold on December 31,2000, shall be disposed
of by the Board as soon as practicable through the most readily available reserve outlets.
ABC Form '13 shall be accepted as evidence of a reserve sale and Agent. manufacturer or
user shall submit supporting documentation with ABC Form 14 on completion of disposition
ofrescrve almonds. Example: For sales of reserve almonds for manufacture of almond butter.
manufacturer will be required to complete processing of the reserve ahnonds iJ1to butter so
that the handler IIlay file ABC Form 14.
9. Credit for Reserve Dis'Dosition
(a)

Agent will be credited with disposition in reserve outlets on compliance with any
minimum prices as identified in §6 as recommended by the Board and established by
the Secretary of Agriculture and on filing with the Board an executed ABC Form 14,
completion of disposition of reserve almonds. together with supporting
documentation as follows:

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(1)

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For'shipment to authorizednoncompetitiveoutlets the inspection certificate(s) on
the almonds shipped.

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(2)

For conversion to an authorized noncompetitive product
the inspection
certificatc(s) on the almonds diverted. If agent did not do the converting, the ABC
Form 14 shall ai,sobe supported by a manufacturer's certification and a Federal or
Federal-State Inspection Service certification.

(3)

For Canadian shipments to almond butter, the quarterly certificate of approval
and a copy of the chartered accountant's verification.

10. Agent, by signing this Agreement, certifies that:

(a)

When almondsare to be usedfor almondbutter, school lunch or other governmental
uses, or other applicablenoncompetitiveoutlets, he or she will comply with any
minimum prices of almonds recommendedby the Board and established by the

Secretary;and

'

11. this Agency Agreement shall apply to the 1999-2000 crop year reserve almonds disposed of
by handlers beginning on August. 1. 1999, and shall remain in effect until December 31,
2000. or such later date as the Secretary of Agriculture may establish pursuant to §981.66(c)
of the order: Provided, That Agent may tcnninate this agency agreement as of April I, 2000,
by written notice given on or before March 20, 2000.

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IN WITNESS WHEREOF, Agent has subscribed his name through an authorized person
and, if a corporation, has subscribed its corporate name and its cOIporateseal, and the Board
has subscribed its name through its duly authorized President and ChiefExccutive Officer.

Date

Agent
By
Title

ALMOND BOARD OF CALIFORNIA

Rodger Wasson
President and Chief Executive Officer

In response to the Paperwork Reduction IV;t, OMB clearance has been granted for this form. OMB requires that the following
statements be shown on ABC Form 12: "No handler shall dispose d reserve almoncl8to noncompetitive outlets as an agent d the
Board unless a CQI11IIeted Agency Agreement is receiwd (7 U.S.C. 608(d), 7 C.F.R 981.66,7 C.F.R 981.67, 7 C.F.R. 981.467):

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employer.

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