Opinion #6683

The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)

STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6683

May 28, 1991

AGRICULTURE:

Agricultural Commodities Marketing Act

AGRICULTURAL COMMODITIES MARKETING ACT:

Agriculture

The Agricultural Commodities Marketing Act does not authorize a mandatory diversion or supply management program.

Honorable Phil Arthurhultz

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion whether 1965 PA 232, MCL 290.651 et seq; MSA 12.94(21) et seq, the Agricultural Commodities Marketing Act, hereafter sometimes the Act, authorizes a mandatory diversion or supply management program.

The Act authorizes producers to unite in creating a marketing program and imposing assessments for the promotion of a commodity.

A "marketing program" is defined in section 2 of the Act:

As used in this act:

(i) "Marketing program" means a program established by order of the director pursuant to this act, prescribing rules and regulations governing the marketing for processing, distributing, selling, or handling an agricultural commodity produced in this state during a specified period and which the director determines would be in the public interest.

MCL 290.652(i); MSA 12.94(22)(i).

The Legislature has provided that a marketing program may contain one or more of the following provisions:

Sec. 3. Any marketing agreement or program issued pursuant to this act may contain one or more of the following:

(a) Provisions for establishing advertising and promotional programs.

(b) Provisions for establishing market development programs.

(c) Provisions for establishing and supporting supplemental research programs designed to improve the market acceptability of the specific commodity and contribute to the effectiveness of the program.

(d) Provisions for development and dissemination of market information.

(e) Provision for contracting with organizations, agencies or individuals for carrying out any of the above activities.

(f) Provisions for:

(1) Establishing standards for quality, condition or size for agricultural commodities sold as fresh products for resale or processing and standards for pack and/or container for commodities sold for use as fresh products.

(2) Inspection and grading of the fresh commodity in accordance with the grading standards so established.

(g) Provision for determining the existence and extent of any surplus in any marketing period, for any commodity or product, or of any grade, size, or quality thereof, and providing for handling and equitably sharing the cost of such surplus handling among the producers of the commodity. Before provisions under this paragraph are included in any marketing program, particular attention shall be given to determining that Michigan producers affected by the provisions produce a sufficient proportion of the product covered by the provisions for the program to be effective in the particular market toward which the provisions would be applicable.

(h) Provision for payment for all usable products purchased from producers according to established grades.

(i) Provision for exemption of nonparticipating producers.

MCL 290.653; MSA 12.94(23).

A marketing program is administered by a committee whose members are appointed by the Governor with the advice and consent of the Senate from nominations received from the producers and processors of the commodity. MCL 290.657(2); MSA 12.94(27)(2).

The Legislature has reposed specific authority in the committee:

Sec. 7. (1) A marketing program shall provide for the establishment of a commodity committee to consist of an odd number of members which shall be not less than 5 nor more than 15.

(4) The duties and responsibilities of a committee shall be prescribed in the order establishing the program and to the extent applicable shall include the following duties and responsibilities:

(a) Developing administrative procedures relating to the marketing program.

(b) Recommending amendments to the marketing program as are considered advisable.

(d) Developing methods for assessing producers and methods for collecting the necessary funds.

(e) Collecting and assembling information and data necessary for proper administration of the program.

(f) Performing other duties necessary for the operation of the marketing program as agreed upon with the director.

MCL 290.657(4)(a)-(f); MSA 12.94(27)(4)(a)-(f).

The Act also provides for the collection of assessments from each producer directly affected by a program to defray all program and administrative costs unless the program allows for nonparticipation. MCL 290.655; MSA 12.94(25). Unpaid assessments are subject to a monthly interest charge. MCL 290.672; MSA 12.94(42).

Collected assessments are not state funds, and money collected pursuant to the Act may be "disbursed only for the necessary expenses incurred with respect to each such separate marketing program, in accordance with the rules established under the program." MCL 290.658(a); MSA 12.94(28)(a). All expenditures are subject to annual audit and an annual activity and financial report must be published. MCL 290.658(b); MSA 12.94(28)(b).

Within this statutory framework, some historical background is also necessary in addressing your question. In 1979, the tart cherry growers approved a referendum establishing the Red Tart Cherry Information and Development Program. The growers voted to continue the program in 1984 and again in 1989 with a change in the assessment method. MCL 290.661; MSA 12.94(31). The existing program document contains the following purposes:

This program is developed for the purpose of informing and improving the economic position of the Michigan Red Tart Cherry producers by supporting and creating greater marketing opportunities through developing, assembling, analyzing, studying and testing, dissemination of crop, market, and price information. This shall be accomplished through this program by developing, assembling, studying and testing basic crop, market, and price information and communicating this information to growers, and others in the industry via newsletters, the news media, meetings at the local, state, national and international level, through grower relations, contacts and various other industry activities and events. The program is authorized to engage in activities and/or projects that it believes will enhance the market and price of red tart cherries. Processors, handlers and others may be contacted to exchange information and to encourage the sale of red tart cherries. Information regarding competing crops and markets may be considered. This program prescribes the procedures by which, for the purpose of accomplishing the above objectives, the marketing, distributing, selling or handling in any manner of red tart cherries produced in this state and sold for processing will be governed.

Apropos of your question, there is currently pending before the Director of the Department of Agriculture, pursuant to MCL 290.660; MSA 12.94(30), a petition to establish a new program concerning the marketing of red tart cherries. The program would be mandatory for all producers of red tart cherries. The petition is supported by the United Cherry Producers, a national voluntary association of red tart cherry producers. After public hearing, if the Director approves the proposed program, it is then subject to a referendum by the affected producers. The proposed program would require mandatory diversion or supply management by establishing volume regulations that would limit the quantity of cherries each producer could sell on the primary market as frozen or canned cherries or as cherry pie filling. The remaining cherries could only be left in the orchard or sold on the secondary market for diversionary uses such as cherry juice.

In this connection, it is to be observed that the Act primarily seeks to expand the marketing of Michigan commodities. The Department of Agriculture has informed this office that all of the commodities marketing programs established to date under the Act have been directed to market expansion rather than supply reduction. However, there is one reference in the Act to surplus handling which may be included in a program, if marketing efforts have failed and an unsold surplus exists. Adoption of a surplus handling plan is contingent upon proponents demonstrating that the plan will be effective. MCL 290.653(g); MSA 12.94(23)(g). Adoption of any such surplus handling plan also requires the Agriculture Director's determination that the program would be in the public interest. MCL 290.652(i); MSA 12.94(22)(i).

As previously observed, 1965 PA 232 authorizes commodity producers to unite to establish a marketing program which is defined in MCL 290.652(i); MSA 12.94(22)(i):

In this definition the Legislature has distinguished between processing, distributing, selling or handling a commodity. This distinction is relevant because a marketing program may contain certain provisions, including:

MCL 290.653(g); MSA 12.94(23)(g).

Thus, the Legislature has authorized a program to contain a provision limited to surplus handling in the event a surplus should occur. In MCL 290.653(g); MSA 12.94(23)(g), the Legislature has not authorized any broader activity than surplus handling, which it has distinguished from processing, distributing or selling. However, the stated purpose of the proposed program is broader in scope than is authorized by the Act. The Act makes no reference to artificially controlling supply and price to consumers or to improving economic returns by restricting the volume sold.

Furthermore, the proposed program is not premised on handling an actual existing surplus as part of a marketing program, but, rather, would establish a program to predict surplus into the future based on carryover cherries plus estimates of market demand and of productive capacity using a tree survey. The proposed program is an attempt to guarantee a desired price per pound on the primary market by declaring as surplus any production volume which would reduce the desired price.

Research demonstrates that other states have enacted legislation which would authorize supply management programs which restrict volume sold. In those states, various state legislatures have specifically authorized restrictions on sale. For example, in New York:

(3) Any marketing agreement or order issued by the commissioner pursuant to this article may contain any or all of the following:

(a) Provisions for determining the existence and extent of the surplus of any agricultural commodity, or of any grade, size or quality thereof, and providing for the regulation and disposition of such surplus.

(b) Provisions for limiting the total quantity of any agricultural product, or of any grade or grades, size or sizes, or quality or portions or combinations thereof, which may be marketed during any specified period or periods. Such total quantity of any such commodity so regulated shall not be less than the quantity which the commissioner shall find is reasonably necessary to supply the market demand of consumers for such commodity. [Emphasis added.]

NY CLS Agri & M, 294(3)(a)(b) (1990).

Pertinent to the issue here presented and dispositive of its resolution is the case of Michigan Wolverine Student Co-operative, Inc. v. Wm Goodyear & Co., 314 Mich 590, 22 NW2d 884 (1946), which held that the attempted sale of real estate, the sole remaining asset of a non-profit corporation, by the board of directors was void where it was without the consent of a majority of its members. Commencing at page 598, the Court stated:

While section 57, supra, states in the affirmative the manner in which a corporation may sell all or substantially all of its assets, under a well-established rule of statutory construction it must be held that no other or greater power is given to boards of directors by the statute than as thus specified therein.

"It is a well-established rule of statutory construction that where powers are specifically conferred they cannot be extended by inference, but that the inference is that it was intended that no other or greater power was given than that specified." Eikhoff v. Detroit Charter Commission, 176 Mich. 535, 540.

"Under the legal maxim of construction that express mention of one thing implies the exclusion of other similar things, there is reason in the contention that, the act having expressly named certain liens made subordinate, it by implication excludes others not mentioned, upon the presumption that, having designated some, the legislature designated all it was intended the act should include." Marshall v. Railway Co., 201 Mich. 167, 172 (8 A.L.R. 435).

"It is a familiar rule that inclusion by specific mention excludes what is not mentioned." Van Sweden v. Van Sweden, 250 Mich. 238, 241.

" 'It is a general principle of interpretation that the mention of one thing implies the exclusion of another thing; expressio unius est exclusio alterius.' 25 R.C.L. p. 981." Dave's Place, Inc., v. Michigan Liquor Control Commission, 277 Mich. 551, 555. [Emphasis added.]

To the same effect, see Stowers v. Wolodzko, 386 Mich 119, 133; 191 NW2d 355 (1971).

Although the Michigan Supreme Court has found that the Act is constitutional, the issue of primary market sale restrictions was not litigated. Dukesherer Farms v. Director of Michigan Department of Agriculture, 405 Mich 1; 273 NW2d 877 (1979). As the statutes of other states discussed above clearly demonstrate, if the Michigan Legislature had intended to permit restrictions on primary market sales, it could have specifically so provided.

Based on an examination of the Act, the Michigan Legislature has authorized commodities marketing programs designed to expand the marketing of particular commodities. To date, all of the approved programs have been aimed at market expansion rather than supply reduction. The Legislature has not authorized a mandatory diversion or supply management program.

It is my opinion, therefore, that the Agricultural Commodities Marketing Act does not authorize a mandatory diversion or supply management program.

Frank J. Kelley

Attorney General