32ND AGRIBUSINESS CONFERENCE

Economy, Water, Trade and Labor were Big Topics at 32nd Agribusiness Conference

By Patrick Cavanaugh, Editor

The reality of the 2014 Federal water allocation, new trade agreements, and the prospects of immigration reform were some of the topics discussed at the 32^ndAgribusiness Management Conference, held at the Radisson Hotel and Conference Center in Fresno, and hosted by Mechel Paggi, Director of California State University Center for Agricultural Business.

California State University, Fresno (CSUF) President Joseph Castro

California State University, Fresno (CSUF) President Joseph Castro, the first CSUF president native to the Central Valley and close to agriculture, opened the conference. “I’m happy that our Jordon College of Agricultural Sciences and Technology has had such a tremendous impact in helping to provide a well-educated work force to serve the many facets of the agricultural industry in the valley and beyond.

“One of my highest priorities as president is to further strengthen our agricultural programs in the broadest sense. In the next week, I will formerly establish a presidential commission on the future of agriculture at Fresno State. The commission will include leaders from the campus and industry coming together to assess our programs and to think about what the needs are now and in the future,” Castro said. “I want these leaders to make recommendations on how to further strengthen our agriculture program.

Following Castro, Terry Barr, Chief Economist, CoBank, presented an economic outlook. He noted that economic decisions are not being made fast enough, because the economy is about the same as it was a year ago. “There are still many issues that are unresolved,” he said, adding, “If you don’t make decisions then you don’t move forward.”

Terry Barr, chief economist, CoBank

“We have been through a very dynamic period over the last 10 years. In the first half of that 10 year period, everyone was talking about the rising middle class in China and India and what it was doing for agricultural product demand,” said Carr. “From 2004 to 2008, we had the best of all possible worlds with strong economic growth and growth in the middle class. That was an extremely strong time for agricultural exports. In late 2008, we experienced different economic turmoil and global recession; however, agriculture was pretty well insulated,” Carr added.

“Today, demand for agricultural products remains very strong, mainly due to global shortfalls of some commodities and, of course, growth in China. Going forward in the next five years, we expect a period of continued turmoil, requiring policy changes to realign management, including budget deficits,” noted Carr.

“China is still going to be important but there will be some major geopolitical realignments globally. We are not going to see rapid growth with solid demand. As we go forward, agriculture will probably have to find the new normal,” he said.

“In the US, there is a lot of policy inaction, and there is no long term strategy to reduce the debt. The US dollar is important to agriculture in terms of our competiveness on a global basis,” Carr explained. “From 2002 to 2011, the US dollar fell in value by 38 percent, and our global competitiveness was extremely strong during that time. But we have to believe that the dollar is going to get stronger, not weaker, against most other currencies, with the exception of China.”

Carr noted that China is really driving the global economy at this point in time and what happens there has extraordinary influence on Ag pricing in the future. “They have a lot of room for stimulus, and they have $3 trillion in reserves that they are deploying both domestic and globally,” he said.

“Brazil, Russia and India are emerging markets, which have slowed since the 2004-2008 experience. However, those economies are now in a more normal growth path,” Carr said.

Paggi then spoke about two trade agreements that are on currently in the forefront, the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).

Mechel Paggi, director of California State University Center for Agricultural Business

“Basically every commodity we work with in California, particularly from the Central Valley, has a huge stake in the export market,” said Paggi. “We produce about $44 billion worth of product and 38 percent of it moves into international trade. It’s tremendously important to us,” said Paggi.

“TTP and TTIP are the two most important preferential trade agreements to be negotiated since NAFTA,” he noted.

“Our TPP partners encompass a market of nearly 500 million consumers with a combined GDP of nearly $12 trillion,” Paggi said. Partner countries include Canada, Australia, Mexico, Malaysia, Singapore, Chile, Peru, New Zealand, Vietnam, Brunei and Japan.

“The TTIP with the EU spans 28 countries with more than 500 million consumers and a GDP of $16.5 trillion,” said Paggi.

“These agreements would give us more marketing opportunities, which at the present time are less than completely open to us, so the benefits would have tremendous potential for us,” Paggi explained.

Paggi said that there is tremendous debate on these potential agreements within the U.S. Also, farmers in the foreign countries involved are worried about opening up their market to U.S. imports.

These agreements would also help to strengthen the existing trade agreements that already are in place with many of the countries in the area.

“We also need to realize that a tremendous amount of trade among these countries is already covered in existing agreements, so what we would be doing with the TTP and TTIP is expanding the membership and bringing everyone into the same circle,” Paggi commented.

Paggi said, in summary, the U.S. has a choice to remain engaged or be left behind. None of these agreements or policy solutions is perfect, so there will have to be a pro-con compromise.

“Also, keep in mind,” Paggi continued, “that trade agreements promote economic well-being, and economic stability promotes political stability, so the benefits of these agreements often transcend simple market access and sales opportunities.”

Tom Birmingham is General Manager of Westlands Water District, an agency of 615,000 acres on the west side of the San Joaquin Valley in Fresno and Kings Counties. “We are here to talk about ‘What’s on tap,’ which is a metaphor that creates an image I wish were applicable on the west side of the San Joaquin Valley,” Birmingham began, “I am not just talking about the Westlands Water District, I am talking about the west side of the San Joaquin Valley that includes the service of every agency that has an agricultural contract with the U.S.”

Tom Birmingham, general manager, Westlands Water District

“Unfortunately, and it almost brings tears to my eyes, next year, when the farmers in the Federal Water districts that use water from the Central Valley Project they open their taps, nothing is going to come. Nothing, that is, unless we have a dramatic change in the hydrology that we have been experiencing over the last year, actually the last eight months,” Birmingham warned.

“In California, water years fall in one of five classifications of hydrology; they have been classified as wet, above normal, below normal, dry or critical. If you talk about average hydrology in California, average rain, average snowpack, average runoff, it doesn’t mean a lot,” said Birmingham. “Because in fact, what is considered to be an average year, falls into a classification that is called, ‘a below-normal water year,’” he noted.

Birmingham continued, “But Westlands is projecting, and these are projections that the Bureau of Reclamation doesn’t take any issue with, that if we have average precipitation or hydrology for the rest of this water year, plus the same operational constraints the Endangered Species Act imposed in 2013 on the state water project and the Federal Central Valley project, our water supply will initially be zero. If we are lucky, we might get to 5% or 10% of our water supply.”

“So, we are facing a repeat of what we saw in 2009,” he noted, “when nearly half of the bare ground lay fallow in the Westlands Water District; where farmers over drafted the groundwater basin; where we experienced incredible unemployment; where people were forced to stand in lines to receive food, in some cases getting to the front of the line to be told the food bank had run out of food, or to get to the front of the line and be given carrots – grown in China. That, in my perspective, is a tragedy; it is unconscionable,” explained Birmingham.

“But that’s what we are faced with. It is hard to talk about these issues without talking about the Delta,” he said.

“The bad news is that in Kern County or the Friant-Kern service area, farmers and the Westside of the San Joaquin Valley, where groundwater is available, growers have been over drafting the groundwater basin,” said Birmingham.

“Westlands has one of the most sophisticated groundwater management programs that exist in the state,” explained Birmingham. “In fact, in 2009, when the state legislature adopted statutes requiring the development of groundwater management plans, Westlands was actually used as one of the examples of the types of information that could be collected.

But Westlands is projecting that in 2013, farmers in the district will use 598,000 acre feet of groundwater from the groundwater basin, compared to a safe yield of approximately 150,000 acre feet.

“The last time farmers in Westlands Water District extracted that much groundwater was in 1992, the fifth year of an extended drought,” said Birmingham.

“We have talked about subsidence and how it has historically occurred, and we are beginning to experience it in numerous places north of Fresno, Madera and Merced Counties,” he said.

“In fact, we continue to experience subsidence within the Westlands Water District. It is fascinating to drive long I-5, where it used to be perfectly flat and smooth. Today, as you drive along the Westside, there are lots of undulations. The same is true at the Three Rocks area of Fresno County. I remember highway 33 was perfectly flat, but today now there are undulations as a consequence of subsidence,” said Birmingham.

“We will continue to experience subsidence, but the rate of subsidence will accelerate. Currently the groundwater levels in Westlands are approximately 100 feet higher than in 1967 when deliveries from the Central Valley Project began. When we fall below that historic low groundwater level, we’re going to experience the types of subsidence that led to the authorization of the San Luis unit.

“Congress authorized construction of San Luis to alleviate subsidence on the Westside of the San Joaquin Valley,” said Birmingham.

“One of the things on tap is there is going to be some type of groundwater regulation. California is one of the few states that generally does not regulate the use of groundwater,” he noted.

There is a lot of groundwater monitoring in California, and in a few regions there are special groundwater management districts created by the legislature. But, generally the use of groundwater is not regulated to the same degree as surface water.

“There exists a lack of statewide effort to regulate the use of groundwater. I would suspect that all of our agencies would oppose that type of statewide legislation,” said Birmingham. “From our perspective, regulations should be made at a regional level because every groundwater basin is different and should be managed on a case-by- case basis instead of state-wide regulations.”

“But it is interesting, half of the farmers in the Westlands Water District take the historic agricultural position that groundwater is the resource available to overlying landowners, and no one has any business regulating their groundwater,” he said.

“If the other 50% of farmers in Westlands, do not become proactive in its management of ground water, as opposed to its monitoring, then the state will step in and do it on behalf of everyone in the state,” said Birmingham.

“Equally as controversial, if management is not done by regional entities like Westlands Water District, it will be regulated by county or state.”

“So, Westlands Water District is actively looking to get into the business of regulating the use of groundwater.”

Ron Jacobsma, general manager, Friant Water Authority

There is some good news, tempered with bad news. The good news is there are a lot of resources that can be reasonably and more effectively and efficiently managed.

Westlands Water District has experienced chronic water supply shortages on a regular basis since the implementation of the Endangered Species Act, and has coped using water transfer contracts based annually or on a longer-term basis with a fixed price.

Also speaking about water was Ron Jacobsma, General Manager, Friant Water Authority. He gave an interesting history of the San Joaquin River, Friant Dam, Millerton Reservoir and canal that serve 1,000s of growers on the East Side of the San Joaquin Valley from Madera to Kern County.

Brent Walthall, with the Kern Water Agency, talked about the many different and historical water districts in Kern County, as well as describing the innovative water banking that is taking place in Kern County during flood years.

Brent Walthall, Kern Water Agency

The event was sponsored by California State University’s Center for Agricultural Business, Jordon College of Agricultural Sciences and Technology, Bank of America, Wells Fargo, Zenith Insurance Company, Edgewood Partners Insurance Center, and Higgins, Marcus & Lovett.

There was also a session on Immigration Reform and its importance to the Central Valley. We will post that on Nov. 4.

Patrick Cavanaugh2016-05-31T19:43:12-07:00November 2nd, 2013|

INTERVIEW WITH DAN GERAWAN

UFW and ALRB Want to Impose Contract on Gerawan Employees

“The UFW won an election to represent Gerawan workers 23 years ago; but then, after only one bargaining session, the union disappeared and hasn’t been heard from in 20 years,” Gerawan Farming said in a recent statement. “Last October, the union reappeared and is using decade-old legislation to now impose a contract on the employer and the employees without a vote.”

California Ag Today associate editor Laurie Greene interviewed Dan Gerawan this week on what he is going through regarding the UFW and ALRB.

Greene: Please introduce your company’s products, # employees, etc.

Dan Gerawan: Gerawan Farming Inc., which grows and ships under the Prima label, is the world’s largest peach grower and employs about 3,000 workers. The company also farms table grapes, nectarines, and plums. We are a family-owned and operated company. Despite our size, I farm with my father, Ray, my brother, Mike, and my wife, Norma. We are very hands-on; this is what we do.

Greene: There are press reports that Gerawan is having a dispute with the UFW. What is that dispute?

Gerawan: We are not having a dispute with the UFW. Our employees are having a dispute. As a company, our dispute is with the state government that is trying to force a contract on us without giving the workers an opportunity to vote. People need to understand that this is not a normal union situation; it has to do with a law being used for something it was never meant for.

Greene: What is your stance on employees having a vote?

Gerawan: We believe the employees should have a vote, and they have made it known they want a vote. They are not saying how they will vote; they just want a vote. When they often express their opinions to us, we stop them and say, “Don’t tell us your preference; we support your right to vote, that’s enough. Everything else is your choice.”

Greene: Can you describe the chronology of your circumstances with the UFW and ALRB?

Gerawan: We lost an election with the UFW in 1990. We had our only bargaining session in 1995. There was never a contract, and the union failed to continue bargaining. The union disappeared; they abandoned our workers.

To this day, we don’t know why. They have told us, “We have no legal obligation to tell you.” We responded, “But you do have a moral obligation. How can you come back after 20 years and tell our workers that you want 3% of their money or you are going to fire them?”

The UFW wrote us a letter in October 2012 saying, “We’re ready to negotiate.” At the time, we couldn’t believe it since the employees didn’t even know they were represented by the union and had been working quite happily earning the industry’s highest wages. But then attorneys explained to us that the UFW would force us into a mandatory process where the state would actually impose the contract on us and our employees, and we would have no right to opt out.

So, the UFW pretended to negotiate for a while. After just eight brief bargaining sessions over a three-month period, during which the UFW never made an economic proposal, the UFW suddenly asked the government to step in to write and impose a contract us.

Greene: Can you explain the Mandatory Mediation Law?

Gerawan: In 2002, the state legislature passed an amendment to 1975’s Agricultural Labor Relations Act. That amendment allowed for mandatory mediation to be imposed in ag labor situations. However, ‘mediation’ is a misnomer; it is really mandatory arbitration. The legislature passed the law in response to a few employers, including one employer (not us) who supposedly dragged out negotiations for many years, 20 years in that particular case.

When the legislature passed that 2002 law, their thought was that that if an employee votes for a union, they are voting for a contract. However, in most industries, employees vote for representation and negotiation for a contract. This is not a normal situation where the union comes in to negotiate, with power, backing up the workers, and then the two parties negotiate a mutual agreement. This is the union invoking a law that allows the state to literally force a contract on the employer and employees.

Keep in mind that the law was meant to remedy dragged-out negotiations. There were no negotiations here to drag out; the union had disappeared. There is nothing in the legislative history that shows the law was to be used in these situations. The UFW’s and ALRB’s stance is basically, “The letter of the law… says if you failed to reach an ‘agreement,’ we can invoke this.” We responded, “That implies that you tried to reach an agreement. You guys never tried. You went away.” Their response, “Well the law doesn’t say we had to try, so we are using that law now to impose a contract.”

Greene: How do you respond to ALRB’s accusations of coercion and forgeries?

Gerawan: The Company has done nothing to coerce any signatures. We do not know anything about forgeries. We don’t know how many there supposedly are. We don’t know who caused those forgeries, and by that I mean I don’t know if they are saying we caused them or the union caused them.

It doesn’t take any coercion for the highest paid employees in the industry to realize that it is wrong for a union to come back after a twenty-year absence and tell them they will take 3% of their pay or fire them—without a vote. Not even a vote to ratify any contract that might happen.

After hearing this for a few months and being harassed at their homes multiple times by UFW people, the employees, on their own, began a decertification effort. They started a petition and turned it in to the ALRB. Immediately, the UFW started filing unfair labor practice charges against us saying that we were coercing our employees. That is silly.

We did not coerce, and in fact we invited ALRB to go out to our fields to make sure the workers understood they have the right to vote however they want. The ALRB did that.

We also did that. My wife, Norma, and I met with all the employees and told them, “Do whatever you want, choose however you want to choose. But congratulations on having achieved that right through your petition. We are not asking how you will vote.”

Greene: Could the signatures have been forged after you submitted them?

Gerawan: I really don’t know. All I know is thousands of signatures apparently were delivered.

Keep in mind, the union does not want the employees to have a choice, and they are fighting hard to stop the employees from having a choice, especially when the adjudicating agency has shown overwhelming bias against the employer and the employees.

The ALRB’s role, under the Agriculture Labor Relations Act, is to protect employees’ rights as a whole and to cause peace in the fields (which we had before the UFW and ALRB came into the situation). So why is the ALRB stopping the employees from having their vote just because of a relatively few questionable signatures from an unknown source?

After all, this is merely a vote.

We need to keep in mind that this is a declining union that has been gone for twenty years, has done nothing for these workers, and has returned only to pick the pockets of the industry’s highest paid workers and not even allow them to have a vote. I think it is unconscionable that the ALRB has done nothing to stop it, but in fact has taken every opportunity to accommodate this travesty.

Greene: Gerawan Farming has claimed that the ruling by Silas Shawver, regional director of ALRB, failed to provide a count of signatures filed, the number needed for a vote, and the number judged invalid.

Gerawan: This is correct. The ALRB blocked the election citing forgeries and coercion. Mr. Shawver is refusing to give out any information.

My wife and I informed our employees that the ALRB regional director in Visalia canceled their vote because supposedly we and the management of our company coerced our workers’ signatures. Our employees told me flat out that the only coercion has come from UFW and ALRB themselves.”

To continue this interview, please press “more” below!

Greene: What is behind the ALRB’s finding that Gerawan directly assisted the petitioner and others in the decertification effort?

Gerawan: We have not directly assisted the petitioner. So, what the ALRB is saying is not true. It is simply did not happen.

When the employees turned in their petition, the ALRB did not announce an election. The employees got very upset and demonstrated at the ALRB office in Visalia to demand their right to vote.

ALRB did not respond, but subsequently cancelled the vote, citing forgeries and coercion. The regional director is refusing to give out any information.

So, on September 30,over 1,500 of our employees reacted by going on strike to protest the ALRB’s and UFW’s cancellation of the vote. We thought we’d be harvesting peaches and grapes that day, but we didn’t.

Greene: Did Gerawan support the stoppage?

Gerawan: Oh no, we did not support the stoppage. We support the workers’ right to choose. But we did not want to see work stopped because we had fruit to harvest that day. But because the workers did stop, the cost for us was significant.

Greene: In a statement you said, “It is unfortunate that our employees felt they needed to take such a drastic action to have their voices heard. We are still hopeful that [the board] will protect the workers’ right to choose.” Are employees grateful for your company’s advocacy or opposed?

Gerawan: The employees have told us that they are grateful that we support their right to choose. At no time have we ever expressed a preference to them one way or the other. We want them to choose.

Greene: What rights do the UFW and ALRB have?

Gerawan: The UFW itself doesn’t have much power because they have such a small membership and are declining, but they have been handed an inordinate amount of power by the legislature. With such power, the UFW no longer needs workers’ support. They no longer need to organize the way a normal union organizes. Their members are created by legislation, not a vote.

We are about to have a contract literally written for us by a state agency and imposed on us. No one signs anything. Neither we nor our employees can opt out.

This type of ag labor unrest hasn’t happened since the 60’s and 70’s, and back then it was completely the opposite of what’s happening now. Back then, the workers wanted union and government protections. Now, the workers are fighting to be free from union coercion and government imposition. It’s hard to believe that the very law that was created to protect farm worker rights is now being used to rob those workers of their rights.

Greene: Why do you think the UFW is targeting Gerawan Farms?

Gerawan: I think they are going after the old abandoned elections.

We have the highest paid employees in the table grapes and tree fruit industry. No one disputes that, not even the union.

By the way, the union has no contracts with table grapes or stone fruit farm employees, and they have not been able to secure any. The last contract they had was with a Hanford farmer, and after a few years, those workers voted to throw the union out.

Clearly we are the biggest target, especially for a union that now is barely 3,000 members. If they prevail against our employees, this would double their size. Overnight, the majority of UFW members will be co-opted members created by legislative fiat, not by worker choice. The UFW needs this badly because their expenses exceed their income, and this is all public knowledge.

Greene: What is the employer mandated to do?

Gerawan: To live within the terms of the contract. There will be no other option. As an example of what the imposed contract will do, it will throw out our meritocracy, which has been an important part of our success, and replace it with seniority. That’s something we specifically told the ALRB arbitrator would harm us.

We made it clear to the ALRB, “Do not mess with that. We have been a shining example of success in creating high wages in an industry that has had a lot of failures. Don’t mess with our formula for success, please.” They completely ignored our plea.

Imagine any business having a contract written by the state and imposed on them–wages, working conditions and everything else. It’s hard to believe that it is actually happening, especially when we’re already paying the highest wages and benefits.

Greene: Did they have to prove any wrongdoing to do this?

Gerawan: To invoke mandatory mediation there has to be an unfair labor practice. We were found guilty of an unfair labor practice in the 1990s after the election. I think it was for laying off a crew at the end of the season.

Now that the union has come back, we have more unfair labor practice allegations. For example, for the buses to Sacramento, that we had nothing to do with, we have an unfair labor practice charge against us. For the employee walk out, that we had nothing to do with and which cost us a huge amount of money, we have an unfair labor charge against us.

Who adjudicates them? The ALRB. A charge does not mean you are truly guilty of doing something; it only means that the union has accused you of something.

Greene: What are your other unfair labor practice charges?

Gerawan: There have been many. It seems to be part of the game. For example, last October, when the union came in, we felt compelled to let our employees know about this. With our lawyers’ review, we sent our employees a letter with the facts only, but we received an unfair labor practice charge just for that.

So, because the UFW suddenly decides to reappear after being gone twenty years, we can no longer communicate with our employees?

Once the union files an unfair labor practice charge, the ALRB investigates, which takes months. Then, they will often side with the union against the employer and file official changes, which will eventually be heard by an administrative law judge. It could be a year or more before the facts come out. Meanwhile, the ALRB and UFW use those charges to damage your reputation, even though there has been no proper discovery or hearing.

Plus, if the unfair labor charge is used to block an election, and the investigation takes months, then the available time window for the election will probably lapse, and the employees’ right to a vote will be taken away from them. The system actually seems designed for that to happen.

Greene: Is there a pattern of unfair labor practices against you?

Gerawan: They come in batches. We got seven a few days ago for the bus trip, the strike, for whatever they conjure up. The unfair labor practice charges are just one or two sentences. From the union standpoint, they fill out a form, and then ALRB does the rest. ALRB sends their team of investigators out to “prove or disprove the unfair labor practice,” but I do not think they want to disprove anything. The ALRB has shown a clear pattern of wanting to rob our employees of their right to choose.

Greene: Gerawan is well known in taking good care of their employees. With this in mind, what could the UFW offer that is missing?

Gerawan: First of all, wage-wise, we are far above the rest of the industry. In fact, many in the industry have told me that they cannot believe that this is happening to the company that pays the highest wages and offers the best working conditions.

So what could the UFW possibly offer? Whatever it is that the state feels it can force the grower to pay whether or not it makes sense or is viable for the business. Again, this is not a normal situation where union organizers represent workers at the bargaining table.

Greene: What is it like for your employees?

Gerawan: The employees have told me that they cannot believe this is happening to them. They say they left Mexico because of things like this. They said, “You wait Dan, we’re going to have a vote.” I said, guys, I hope you do, but you may not have the chance. The employees said, “What do you mean? This is America! When the state hears that all we want is to vote, then they will understand.”

I had to tell them that I was sorry that this it is such a tragedy. We all assume that we will have the simple basic right to vote, but apparently that’s not how it is anymore.

Greene: You have met with Sylvia Torres-Guillén, the general counsel with the California ALRB. How did your conversation go with her?

Gerawan: Yes, my wife and I met her during one of our hearings. She was very cordial. We both had just heard my attorney tell the Judge that ALRB was so biased that it would never let our workers have a vote. We told her that we hoped that she would prove my attorney wrong because our employees need her help to protect their right to vote.

She said she would let them vote if… at which point I politely interrupted and pleaded to her that it was her responsibility to get rid of the “if,” and to make sure the rights of the workers were protected so that peace would be restored to our fields.

Patrick Cavanaugh2016-10-25T21:53:22-07:00October 14th, 2013|

Previous 34