in the KNOWN

In the Know Newsletter

March 28, 2014

Ag Council Speaks Out Against Food Labeling Measure

This week, Ag Council spoke out against a bill to label genetically engineered food, SB 1381 by Senator Noreen Evans (D-Santa Rosa), at a hearing in the Senate Committee on Health. Ag Council member Mona Shulman, VP and General Counsel with Pacific Coast Producers, testified in opposition to SB 1381 detailing the costly impacts on farmer-owned businesses, including liability and compliance costs, which will result in higher grocery bills for consumers.

Unfortunately, despite significant opposition to SB 1381 by Ag Council and others over the past few weeks, the Committee on Health approved the bill by a vote of 5-2.

As background, SB 1381 is markedly similar Proposition 37, which was a measure to label genetically engineered food that failed on the California ballot in November 2012. Ag Council opposed Proposition 37 and strongly opposes SB 1381 because it increases food costs and is not grounded in science. It is also unnecessary and expands liability.

SB 1381 is now pending in the Senate Committee on Rules.

Coalition Letter
To read the opposition letter sent to the Senate Health Committee, click HERE.

Labor Committee Approves New Minimum Wage Bill Opposed by Business & Ag Groups

The Senate Labor Committee this week approved a measure, SB 935 by Senator Mark Leno (D-San Francisco), to incrementally increase the minimum wage to $13 by the year 2017. Ag Council opposes SB 935, along with numerous other agricultural and business organizations.

SB 935 indexes minimum wage increases to inflation beginning in 2018, which is very disconcerting because economic factors and costs are not contemplated with such automatic increases.

The California Legislature approved, and Governor Jerry Brown signed into law, a minimum wage increase last year that raises the current $8 minimum wage to $9 this July and then increases it to $10 in January 2016. Of note, a recent Congressional Budget Office report reveals increasing the minimum wage to $10.10 as proposed by some at the federal level would provide a higher wage for some workers.  However, “some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.”

SB 935 is now pending in the Senate Committee on Appropriations, and Ag Council continues to oppose the bill in the Legislature.

State Senate Formally Suspends Three Members

The California State Senate today voted to suspend three senators accused of various crimes including corruption, perjury and conspiracy to traffic weapons, among other counts. All three continue to receive pay.

Senate President pro Tem, Darrell Steinberg (D-Sacramento) said this week, “They will not come back, period, unless and until they are acquitted of the charges.”

Steinberg also said of the three legislators, “One is an anomaly. Two is a coincidence. Three? I am calling on our entire body to take a deeper look at our culture.” Steinberg is conducting an ethics review of each individual Senate office in April.

As background, Senator Rod Wright (D-Baldwin Hills) was convicted of voter fraud and perjury, and Senator Ron Calderon (D-Montebello) has been indicted on 24 counts of corruption. In addition, just this week, Senator Leland Yee (D-San Francisco) was arrested on corruption charges and conspiracy to traffic firearms.

Given that the three senators continue to receive pay during their suspension, Steinberg is expected to initiate a constitutional amendment permitting the Legislature to suspend members without pay. This action requires a two-thirds vote of approval by the Legislature and then it must be passed by voters on the ballot.

Click HERE to read more in a San Francisco Chronicle article.

CDFA Water Efficiency Meetings

The emergency drought measure, SB 103, recently signed into law by Governor Jerry Brown includes $10 million in funding for on-farm water conservation practices. The California Department of Food and Agriculture (CDFA) is creating a grant fund called the Water Efficiency and Enhancement Program with the funding.

Two upcoming stakeholder meetings are being held by CDFA to discuss the new program and to consider public comments. Dates, times and locations for the meetings are as follows:

Friday, April 11, 2014
9:00 a.m. to 12:00 p.m.
CDFA Headquarters Main Auditorium – 1st floor
1220 N Street
Sacramento, CA 95814

Friday, April 18, 2014
9:00 a.m. to 12:00 p.m.
Stanislaus County Agricultural Center Harvest Hall, Room DE 3
800 Cornucopia Way
Modesto, CA 95358

The program is expected to be implemented by July 1, 2014. Click HERE for more details and an overview of the grant program.

In Case You Missed It

Ag Council’s 2013 Impact Report is now available online. The Impact Report details legislative and regulatory achievements and also covers Ag Council’s important outreach to legislators. Click HERE to view the Impact Report.

March 21, 2014

Ag Council Works Against Bill to Label Genetically Engineered Food

With the legislative session in full swing, one of the bills under consideration that Ag Council ardently opposes is SB 1381 by Senator Noreen Evans (D-Santa Rosa). SB 1381 would mandate labeling of genetically engineered food products in California.

The bill is similar to Proposition 37, which failed on the California ballot in November 2012. Ag Council opposed Proposition 37 and strongly opposes SB 1381 as it increases food costs and is not grounded in science. It is also unnecessary and expands liability.

Grocery bills for consumers will escalate by up to $400 per year according to economic studies undertaken on Proposition 37, which again is analogous to SB 1381. Consumer prices will rise as a result of farmers, food processors and companies being forced to incur huge costs due to the labeling, packaging, distribution and other implementation requirements of a genetically engineered labeling scheme.

The American Medical Association, National Academy of Sciences, World Health Organization and United States Food and Drug Administration all have studied genetically engineered ingredients and found them to be safe. Additionally, the measure is unnecessary given that consumers can already purchase food products made without genetically engineered products under the “certified organic” label.

SB 1381 also creates a new category of lawsuits where a private citizen can sue without any proof of harm and therefore the measure incentivizes lawsuits. This is misguided and simply serves to boost the coffers of trial attorneys.

Ag Council Action & Bill Status

Ag Council is actively advocating against SB 1381 in the Legislature. The Senate Health Committee will consider the bill on March 26, and it is also slated for consideration in both the Senate Agriculture Committee and the Senate Judiciary Committee. Ag Council is a member of a coalition opposed to SB 1381 and will keep our members apprised of the opposition effort during committee consideration.

Coalition Letter

Please click HERE to read a copy of the opposition letter to Chairman Ed Hernandez (D-West Covina) of the Senate Health Committee.

State Water Board Announces Changes to Temporary Order

State and federal water agencies this week asked the State Water Resources Control Board (Board) to modify the Board’s previous temporary order that required retention of water in upstream reservoirs to preserve storage only for health and safety purposes due to drought conditions. Many in the agricultural community were extremely concerned by this temporary order and its potential impact on the ag economy and beyond.

On Tuesday this week, the Department of Water Resources (DWR) and Bureau of Reclamation (Bureau) requested a modification in the temporary order to allow agricultural, municipal and other water uses once public health and safety needs are met. This request to somewhat ease the restrictions in the previous order was granted this week by the Board.

Tom Howard, Executive Director of the State Water Resources Control Board said, “We’ve been very lucky. The month of February was above normal in rainfall in Northern California, at least, so while the drought is still of an incredibly critical nature – there’s been some ability to relax the public health and safety restriction and allow water that’s available to be used for other uses.”

In addition, the Board made another change this week to allow more water to be held back and stored in reservoirs. Normally, Delta outflows increase at the end of March to protect fish. DWR and the Bureau asked that outflow requirements for fish be modified by the Board in order to maximize supplies, and the Board made this modification. Normal outflows would be 11,000 cfs in March and the new standard lowers outflows to 7,100 cfs.

California still remains in a serious drought, and the Board can still make changes to the tempoarary order next month if dry conditions continue.

Prop 65 Draft Regulations Released on Warnings

The Office of Environmental Health Hazard Assessment (OEHHA), within Cal/EPA, recently released a pre-regulatory draft of proposed changes to Prop 65 warning regulations.

Given the importance of this issue to many of our members, Ag Council is in the process of reviewing the proposal and is involved in discussions with our agricultural counterparts and others regarding the draft regulations. Cal/EPA has stated the proposed draft regulations are meant to serve as the starting part for discussions on Prop 65 warnings.

Ag Council will attend an upcoming OEHHA public workshop on possible regulatory changes to Prop 65 warnings on April 14, and Ag Council will communicate updates to our members about this issue.

In the meantime, if you have any questions or if you like further details regarding the proposed draft regulations, please call Ag Council at ph. (916) 443-4887.

In Case You Missed It

Ag Council recently held its 95th Annual Meeting in Huntington Beach, California. Click HERE for highlights including comments by the general session speakers and the recognition of the 2014 California Cultivator Award recipient, Gray Allen.

Gray Allen (l) receives the Cultivator Award from Ag Council Chair Rich Hudgins (r).

Gray Allen (l) receives the Cultivator Award from Ag Council Chair Rich Hudgins (r).


March 7, 2014

Sowing the Seeds of Success at Ag Council’s Annual Meeting

Stormy weather was a welcome travel inconvenience for the more than 160 attendees who made their way to Huntington Beach, Calif. this past week for the 95th Annual Meeting of the Agricultural Council of California (Ag Council) that was held in conjunction with CoBank’s Pacific West Customer meeting.

“Financially Ag Council has never been stronger,” said Rich Hudgins, 2014 chair of Ag Council and president and CEO of the California Canning Peach Association. “2013 has been a very good year for our organization with a dramatic increase in our membership base. In the words of Henry Ford, ‘Coming together is a beginning; keeping together is progress; and working together is success.’ Farmer-owned cooperatives are the perfect example of the power of working together toward a common goal.”

95th Annual Meeting Highlights

Sen. George Runner, current member of the Board of Equalization, speaks before Ag Council members.

Sen. George Runner, current member of the Board of Equalization, speaks before Ag Council members.

Ag Council’s Annual Dinner on March 2, featured keynote speaker Senator George Runner (Ret.), and member of the State Board of Equalization. “This is a tough state to do business in,” said Runner during his remarks. “You are overtaxed and overregulated, so I have a great deal of gratitude for those of you who establish a business and stay in California.” Runner discussed his efforts on tax reform and his interest in seeing California taxpayers receive a fair benefit for the taxes they pay as part of his address.

Ag Council’s General Session the next day was moderated by Jackson Gualco, of The Gualco Group. Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC, and a leading political and media strategist whose record includes work on four presidential and three gubernatorial campaigns was the first speaker of the day. Scnhur discussed the state’s political environment and predictions for the coming year.

Mike Kirkpatrick, a financial consultant for Nationwide Insurance’s Land as Your Legacy program outlined the challenges facing family farm businesses as they try to transition to the next generation. “Ninety-eight percent of farms are family-owned, but statistics show us that only a fraction of those successfully pass to subsequent generations,” he said. “Even when those businesses to make it to a second or third generation, there is often discord that occurs that threatens the fabric of a family.” As part of his presentation, Kirkpatrick offered several tips for easing that transition.

Dr. Patrick Lattore, president of PAL~Leadership, LLC closed out the Ag Council General Session with a presentation that challenged attendees to understand how business cultures, whether negative or positive, influence the ability to innovate and stay viable. “Our ability to lead is predicated on our ability to change ourselves and the culture we operate in,” he said. “To be successful as leaders, we have to be an example of change.”

Regulatory & Legislative Update
California’s historic drought was a key topic during the Annual Meeting, and was a primary focus of the organization’s advocacy work during the past year, according to Ag Council President Emily Rooney in remarks she made during her annual address.

“Given the state’s water crisis and the many pending regulations surrounding ground water, the top issues facing our membership heading into the coming year are related to water—both quality and quantity,” she said during her video remarks. “Proposed increases in several fees associated with water use have the potential to be very challenging to our members’ food production businesses.”

California’s historic drought has meant that Ag Council is also focusing a significant amount of its legislative efforts on water issues, according to Tricia Geringer, Vice President of Ag Council who addressed members during the group’s Delegate Body Meeting.

“The only silver lining to the fact that we’re in the driest year on record since the state first began keeping track in 1885, is that water shortages are touching every California resident personally,” said Geringer. “That means, as in the words of Governor Jerry Brown during his remarks to our members at the World Ag Expo in February, ‘the drought seems to have been a wake-up call to people regarding how critical water is to our state’s prosperity.’”

After declaring a drought State of Emergency in January, Governor Brown on March 1 signed legislation to help address immediate water shortages and other urgent drought needs. Most of the funding derives from existing bonds (Prop 84 and Prop 1E) with money going toward local and regional projects that are already planned or partially completed to boost water reliability.

“This is only the beginning of water-focused legislation that we will see in this session,” said Geringer. “There are also several state measures under consideration to revise the $11 billion water bond measure currently on the November ballot. Ag Council, along with other stakeholders, supports the effort to reduce the total bond amount, but is also seeking a $3 billion continuous appropriation for water storage projects. We will continue to emphasize a strong storage component in the water bond during our advocacy work because it is necessary to better prepare our state for future weather events.

Gray Allen Receives California Cultivator Award

Gray Allen (l) receives the Cultivator Award from Ag Council Chair Rich Hudgins (r).

Gray Allen (l) receives the Cultivator Award from Ag Council Chair Rich Hudgins (r).

A highlight of Ag Council’s 95th Annual Meeting was the presentation of the prestigious 2014 California Cultivator Award to Gray Allen, a public relations consultant who has dedicated his career to cooperatives, and more recently has been serving as a member of the Placer County Water Agency.

“Gray’s lifelong dedication to promoting and advancing the cooperative business model through his public relations work for Ag Council, then with California Canners and Growers, and now as a consultant to our coop makes him an ideal candidate for this award,” said Susan Brauner who nominated Allen for the Cultivator Award and serves as director of public affairs for Blue Diamond Growers. “He has been working tirelessly as an advocate for co-ops and farmer-owned businesses for 55 years, and continues to do so to the present day.”

Raised in New Orleans and educated in North Carolina and Arizona, Allen began his career in public relations in 1959, working with agricultural cooperatives in North Carolina and Arizona before moving to Sacramento in 1966 to accept a position with the Agricultural Council of California. From 1973 to 1983, he worked with California Canners and Growers, and from 1983 to 1989, with National Semiconductor Corporation in Santa Clara. In 1989, he started his consulting business based in Roseville, Calif.

“I am humbled to be receiving this award,” said Allen after being presented with the Cultivator Award by Rich Hudgins, current chairman of Ag Council and president and CEO of the California Canning Peach Association. “Farmers working together cooperatively to ensure their economic well-being has been a leading factor in the remarkable success of the American food industry. I am awed by what has been achieved and humbled by having witnessed it up close and personal.”

This special award is given to individuals who clearly have made significant contributions to agricultural cooperatives, or have demonstrated leadership and personal commitment to the industry. These contributions can be in areas such as proven leadership and dedication, innovation and/or environmental stewardship.

Storage Component Boosted in Water Bond Measure

Assemblyman Anthony Rendon (D-Lakewood), Chair of the Assembly Committee on Water, Parks and Wildlife.

Assemblyman Anthony Rendon (D-Lakewood), Chair of the Assembly Committee on Water, Parks and Wildlife.

Assemblyman Anthony Rendon (D-Lakewood), who is Chair of the Assembly Water, Parks, and Wildlife Committee this week added $1 billion in water storage funding to his water bond bill, AB 1331. With this addition, the water storage component in AB 1331 is now $2.5 billion, which is much closer to the $3 billion supported by Ag Council and other agricultural organizations.

Rendon said, “After holding hearings across the state, it’s clear that Californians want more storage in order to meet the growing water needs of our state. This increase in water storage funding will help protect California from future droughts and provide tens of thousands of new jobs at the same time.”

If approved, the funds would go toward both above and below ground storage and would be available through a competitive grant process since no earmarks are in the bill. In addition to the $2.5 billion for water storage, AB 1331 also proposes $1 billion in drinking water improvements, $1.5 billion for the protection of rivers and watersheds, $2 billion in regional climate change response projects, and $1 billion to protect the Delta.

AB 1331 is one of several water bond bills pending in the Legislature, including a measure by Senator Lois Wolk (D-Davis) and another by Assemblyman Adam Gray (D-Merced). Given that Rendon is Chair of the Committee on Water, Parks and Wildlife, his bill is one of the leading water bond measures under consideration in the Legislature.  A hearing is scheduled on March 25 to consider AB 1331.

As background, The Safe, Clean, and Reliable Drinking Water Supply Act is an $11 billion water bond measure that is certified to be on the November ballot. The water bond currently on the ballot was originally part of the legislative package crafted in 2009 by Governor Schwarzenegger and state lawmakers to meet California’s growing water challenges. The water bond measure was set to be on the state’s 2010 ballot and was later moved to the 2012 ballot. In July 2012, the California State Legislature, approved a bill to take the measure off the 2012 ballot and put it on the 2014 ballot to provide a public cost share for elements of the package that benefit the public.