Ag Council Holds Briefing with
Legislative Rural Caucus

On October 20, Ag Council held a joint informational briefing with members of the Legislative Rural Caucus in Fresno to discuss the impacts of AB 32 climate change regulations on our agricultural economy and jobs, specifically food manufacturing.  Over 50 attendees gathered to hear legislators and speakers talk about the effect of climate change regulations on food manufacturers.  

The meeting was led by Assembly Member Linda Halderman (R-Fresno), who is Chair of the Legislative Rural Caucus.  Assembly Member Valadao (R-Hanford) and Assembly Member Shannon Grove (R-Bakersfield) also attended.  Ag Council thanks these legislators for their interest and commitment to educate the public and bring attention to this important issue affecting our members.


From L-R: Assembly Members Valadao, Halderman and Grove at the Rural Caucus briefing


Two Ag Council members impacted by the regulation had representatives speak at the briefing, Mona Shulman, Vice President and General Counsel at Pacific Coast Producers, and Ben Curti, a dairyman and board member with Land O’Lakes.  Miriam Balster, Director of Environmental Management at Olam Spices and Vegetable Ingredients, a member of the California League of Food Processors, also spoke at the meeting. 

From the regulatory side, Ag Council appreciates the attendance of Dee Dee D’Adamo who is a member of the California Air Resources Board (CARB), which is the state agency developing the climate change regulations by implementing a cap and trade system. 

               
 CA Air Resources Board Member, Dee Dee D'Adamo, at the Rural Caucus briefing

Ag Council members explained that CARB has designated food manufacturers in the medium leakage risk category.  The determination of the leakage category is partly based on the ability of an industry to pass on costs to consumers, coupled with domestic and international trade pressures. 

Emissions “leakage” refers to the corresponding emissions increases expected to occur in domestic and international locations outside of California that do not have a cap and trade system.  Leakage is likely to take place due to the competitive disadvantage California companies will face under the cap and trade regulation.

At the briefing, Ag Council members stated it is critical that CARB move food manufacturers from the medium leakage emissions category to the high category under the regulation to alleviate the negative effects, including: high costs, reduction in the market share for California food products and potential job losses. 

Ag Council Speaks Out as CARB Adopts Climate
Change Regulations

On October 20, CARB adopted the final climate change regulations for implementation of the AB 32 California Global Warming Solutions Act approved by the state Legislature back in 2006 and signed by then-Governor Schwarzenegger the same year.  The regulations take effect in 2012 with enforcement starting in 2013. 

Ag Council President, Emily Rooney, spoke on behalf of members at the CARB meeting.  Rooney urged CARB to continue to strengthen cost-containment measures in the program and stated that creating a $10 price floor on allowances is counter-productive to this effort.  She also reiterated Ag Council’s ongoing request that CARB move food manufacturers from the medium leakage risk category to the high leakage risk category due to increasing international and domestic competition and the inability to pass along costs to consumers. 

By moving into the high leakage risk category, food manufacturing is provided more flexibility, and we help protect our agricultural economy.     

As a reminder, AB 32 is the landmark climate change law approved in California to reduce the state’s greenhouse gas emissions to 1990 levels by 2020. 

Click here for a video of Ag Council's statement at the October CARB meeting. 

Study Approved by CARB to Look at the Impact of Climate Change Regulations on Food Manufacturing

Ag Council, along with the League of Food Processors, worked with the California Air Resources Board (CARB) staff to develop resolution language to conduct a study of agriculture and food processing as it is affected by the climate change regulation.  Specifically, the study will review whether agriculture and food processing are able to pass on regulatory costs to consumers given existing domestic and international competition. 

The resolution language, approved by CARB on Oct. 20, reads as follows:
         
     Be it further resolved that the Board directs the Executive Officer to initiate a study to analyze the ability of the agricultural industry, including food processors, to pass on regulatory costs to consumers, given domestic and international competition and continually fluctuating global markets.  The Executive Officer shall identify and propose regulatory amendments, as appropriate. 


Ag Council looks forward to completion of the study to demonstrate the serious impacts of the regulation on our members.  The study is expected to be conducted by an outside academic source.