Ag Council eUpdate —
Weekly eNewsletter

The California Agriculture Council is hard at work on behalf of its members. Please visit us often to learn more about the impact the "ACC" is having in our state and around the world. You will find the most recent Agricultural Council eUPDATE below. If you would like to receive the eUPDATES directly to your inbox, please subscribe!

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Friday, October 31, 2008

Thank You Chris!
Chris Doherty, Chief Financial Officer at Cal/West Seeds, has accepted the position of Senior Vice President & Chief Financial Officer at Farm Credit West. His departure from Cal/West is effective November 14. Chris has served on the Ag Council’s board of directors since 2006. His financial acumen and counsel have been extremely valuable to the Council’s administration, particularly with respect to our recent building transaction. He’s been a terrific representative for Cal/West and we wish him all the best in his new position.

Water Primer
The Legislative Analyst Office (LAO) has published the California Water Primer that will be used to brief lawmakers and legislative staff on the state’s water system and challenges. The 77 page publication provides a comprehensive overview of water sources, storage, conveyance and uses. More importantly, it outlines several policy issues that the LAO believes should be addressed by the legislature.

The LAO uses the premise that “least cost, highest gain” should be incorporated into legislative decision-making and offers several recommendations regarding water supply reliability; realignment of water rights; groundwater regulation; and, the role of the Delta/conveyance. For example, with respect to water rights realignment, the LAO asserts that it’s in the interest of the state to undertake a concerted effort to realign the water rights system to better reflect modern needs and circumstances. This could be done by accounting for the potential for water conservation and water use efficiency in managing water rights. Thus, where water is required for agricultural purposes, the water rights should mirror only the amount of water needed to grow a crop using available water efficiency technology. Similarly, urban water rights should reflect the use of cost-effective water conservation and efficiency measures. With respect to groundwater the LAO recommends the establishment of a state-administered water rights system for groundwater. It’s also recommended that the water quality permitting processes of the state and regional water boards be restructured to protect groundwater to the same extent as surface water.

Although it’s a significant part of the LAO’s responsibility to publish special issue studies for the legislature, it’s the first time in memory that they have focused on a comprehensive water policy. Given the state’s current water problems, many of the LAO’s recommendations could undoubtedly morph into legislation next year. To view the full report, go to: http://www.lao.ca.gov/laoapp/PubDetails.aspx?id=1889

Revenue Commission
Governor Schwarzenegger announced the formation of a special bipartisan Commission on the 21st Century Economy to modernize and decrease the volatility in the state’s tax system. The commission will have 12 members, six appointed by the Governor, three appointed by the Assembly Speaker and three appointed by the Senate Pro Tempore. The commission is intended to create a road map toward a more reliable revenue stream that is more reflective of today’s economy. The Governor believes that an improved revenue-gathering system would decrease the pressure for future tax increases to address revenue shortfalls, which will continue to occur if the volatility of our tax system is not reduced.

Central Valley Salt Management
State and regional water quality regulators announced an aggressive stakeholder engaged process to develop a Salt Management Plan for the Central Valley. The multi-year effort will be spear-headed through the Central Valley Salinity Coalition (CVSC), a non-profit, public-private organization. Stakeholder groups will be asked to raise $150,000-$300,000 to initially fund the effort. The CVSC’s goals are to:

• Engage all users of Central Valley surface and ground waters to actively participate;
• Encourage all users contributing to and/or impacted by salts and nitrate to provide financial support or other resources to the CVSC’s planning and control efforts;
• Develop and implement a Salinity Management Plan through amendments to the Central Valley Basin Plans and Delta Plan.

According to state officials, this is will be a long and expensive process that should be done with the active involvement of stakeholders. Alternatively, if this unique public/private approach fails to gain traction within the next 12 months, the only alternative will be to pursue to a more traditional regulatory process to amend the basin plans. The Ag Council will be working with other agricultural groups to develop a strategy for actively engaging with the CVSC.

New CDFA Undersecretary
On October 16, the Governor appointed Will Brown as Undersecretary at CDFA. Mr. Brown has a long history of working with food distribution and retail interests on a host of federal and state policy issues. He has extensive policy experience in California and Texas and we look forward to working with him. The press release can be viewed at: www.cdfa.ca.gov/ egov/Press_Releases/ Press_Release.asp?PRnum=08-071

AB 32 Process Moves Forward
The AB 32 proposed scoping plan was released in early October. The document lays out recommendations for reducing greenhouse gas emissions to 1990 levels by the year 2020. The plan has a lengthy list of programmatic changes and proposals to achieve this goal. It calls for development of a cap-and-trade program, expanding energy efficiency programs and achieving various targets through policy changes and increasing fees and administrative costs. The economic analysis of AB 32’s impact on businesses is severely lacking and given today’s economic climate, we have to take this very seriously. Even the EU recognizes this problem; it recently added a requirement to its climate change policies that an economic-impact study be executed and fully analyzed prior to enacting any binding climate change laws.

There is a public hearing on the scoping document November 20-21 in Sacramento. The deadline for comments is December 10. The CA Air Resources Board is expected to take it up on December 11. The scoping plan is 142 pages in length and can be accessed at www.arb.ca.gov/cc/scopingplan/document/scopingplandocument.htm

Friday, October 3, 2008

Legislative Wrap-up
Now that the Governor Schwarzenegger has completed his work on the 800+ bills that were dumped into his lap two weeks ago, things should settle down in the Capitol until December 1, when the new 2009-2010 Legislative Session convenes. By the time he finished his work on Tuesday, the Governor set a record for vetoing the highest percentage of bills in a single year, vetoing more than a third of the bills that reached him this year (34.97% in 2008). That's 10% higher than the previous record set by Governor Davis in 2000. Among the vetoes were two major bills strongly opposed by agricultural groups:

Farm Labor Elections – AB 2386 (Nunez)
Would have added a mediated election process to the Agricultural Labor Relations Act that will provide an additional and alternative means for the selection by agricultural employees of a representative for collective bargaining purposes. Included in the Governor’s veto message was the following recommendation: However, as I indicated last year in my veto of SB 180, I remain committed to ensuring that agricultural workers receive all the workplace protections that our labor laws afford. To that end, I am calling for the creation of a dedicated funding source to facilitate enhanced oversight and education in the agricultural industry. I am directing my Labor and Workforce Development Agency to work with the proponents of this bill and all stakeholders to develop a proposal which will create such a program in a fiscally responsible way, for the ultimate benefit of both agricultural employees and employers

Port Fees – SB 974 (Lowenthal)
Would have imposed a maximum fee of $30 per twenty-foot equivalent unit on each shipping container processed in the Ports of Los Angeles, Long Beach and Oakland to alleviate congestion of the ports by funding projects to improve the flow and efficiency cargo movement and mitigate air pollution.

Three other bills of interest to the affected commodity interests were also vetoed:

Raw Milk Standards – SB 201 (Florez)
Would have provided alternative health standards for dairy farms that produce and process guaranteed raw milk, or Grade A raw milk.

Apple Pests – AB 1021 (Berryhill)
Would have required the Secretary of CDFA to appoint an 11-member committee of the California Apple Commission and a scientific advisory panel for the general purpose of preventing the further introduction of identified pests and diseases.

Beehives – AB 2849 (Evans)
Would have increased fines and penalties on people, who illegally removed beehives from the property on which they were located.
The following bills were signed into law and will take effect on January 1, 2009. Contact me directly if you would like copies of any of the following:

GMO’s - AB 541 (Huffman)
Establishes sampling and analysis protocols when determining if there is a breach of contract or seed patent infringement of genetically engineered plants and specifies that farmers are not liable for unintended or de minimis breaches of contract or seed patent infringements.

Junk Dealers – AB 844 (Berryhill)
Requires junk dealers and recyclers to comply with additional recordkeeping requirements and new payment restrictions when purchasing nonferrous materials (i.e., copper, copper alloys, stainless steel, and aluminum, excluding beverage containers). The bill also increases fines and penalties for non-compliance.

Seed Law – AB 856 (Galgiani)
Provides that CDFA, upon recommendation of the California Seed Advisory Board, has the option to not apportion a $100 subvention to counties without registered seed labelers; and, specifies the apportionment provisions shall remain in effect until January 1, 2010, at which time those provisions shall be repealed.

Direct Marketing – AB 2168 (Jones)
Authorizes allow individuals, organizations, or entities that purchase produce or products from a farmers' market, farm stand, or retail farm stand to resell that product to another user if there is information provided to trace back the produce back to the point of production.

Invasive Pests - AB 2763 (Laird)
Requires the CDFA or a county ag commissioner prior to aerial application of a pesticide under an eradication project in an urban area to hold at least one public forum, and have the Department of Pesticide Regulation and the Office of Environmental Health Hazard Assessment to jointly seek a human and environmental health risk evaluation. It also states legislative intent directing ag commissioners to take an increasing role in urban invasive pests, and list all ingredients in formulating the pesticide used in the eradication project.

Aerial Application – AB 2765 (Huffman)
Require the secretary of CDFA or the county ag commissioner, before the aerial application of a pesticide, to conduct at least one public hearing to consider all alternatives to aerial application of a pesticide and to seek an evaluation of human health risks and environmental risks jointly prepared by the Department of Pesticide Regulation and the Office of Environmental Health Hazard Assessment, including findings and recommendations regarding environmental and human risks of the proposed use of a pesticide by aerial application.

Olive Oil – AB 2824 (Berryhill)
Revises the definition of extra virgin olive oil.

Williamson Act – AB 2921 (Laird)
Prohibits a city or county from canceling a Williamson Act contract to resolve a material breach, unless the local officials follow the detailed statutory procedures. This bill also provides that if a potential material breach of a Williamson Act contract involves extenuating circumstances, the city or county and the landowner may agree to request that the Department of Conservation meet and confer with them for the purpose of developing resolution of the potential material breach.

Olive Oil – SB 634 (Wiggins)
Clarifies the definition of olive oil; repeals current licensure provisions; conforms olive oil definitions, grades and labeling requirements to international standards; authorizes the addition of vitamin E to specified olive oils; permits a consumer to re-use a clean olive oil container, can, or drum; and, makes legislative findings and declarations.

Seed Law – SB 1280 (Maldonado)
Revises the composition of the Seed Advisory Board to consist of seven registered labelers, two persons who receive or possess seed for sale in this state, and two members of the public. The bill also changes labeler registration requirements.

Property Tax Breaks – SB 1562 (Hollingsworth)
Extends temporary property tax exemptions to any fruit-bearing ,nut-bearing tree or grapevine that was damaged by the extremely strong and damaging winds that commenced on October 20, 2007, and by the wildfires that commenced on October 21, 2007, that were the subject of the Governor's proclamations of a state of emergency.

California Rice Commission – SB 1623 (Yee)
Makes a number of technical and substantive changes relating to the duties, powers and administration of the California Rice Commission. Significant changes are made to provisions covering investigations, notice of violations and civil penalties.

Farm Credit Remains Strong
Despite the turmoil that’s rocking Wall Street, the Farm Credit System reports that it’s continuing to tap the nation’s debt markets to efficiently bring capital to agriculture. Farm Credit’s capital position remains strong. As of June 30, 2008, Farm Credit had more than $27 billion in capital – up from $21.5 billion at December 31, 2007. Farm Credit’s capital as a percentage of assets was 13.1% at June 30, 2008. Because the farmers, ranchers and agricultural cooperatives that use Farm Credit institutions also own and govern them, mission focus is guaranteed. As cooperatives, Farm Credit institutions do not issue publicly traded stock and therefore avoid the conflict with mission that has troubled other Government Sponsored Enterprises. More detailed financial information can be found at www.farmcredit-ffcb.com.

With the Legislature now in recess, eUpdate will be distributed as newsworthy items and events arise over the next three months.