Study offers insights on reducing nitrate contamination from groundwater recharge

By Mike Hsu

With California enduring record-breaking rain and snow and Gov. Gavin Newsom recently easing restrictions on groundwater recharge, interest in “managed aquifer recharge” has never been higher. This process – by which floodwater is routed to sites such as farm fields so that it percolates into the aquifer – holds great promise as a tool to replenish depleted groundwater stores across the state.

But one concern, in the agricultural context, is how recharge might push nitrates from fertilizer into the groundwater supply. Consumption of well water contaminated with nitrates has been linked to increased risk of cancers, birth defects and other health impacts.

“Many growers want to provide farmland to help recharge groundwater, but they don’t want to contribute to nitrate contamination of the groundwater, and they need to know how on-farm recharge practices might affect their crops,” said Matthew Fidelibus, a University of California Cooperative Extension specialist in the UC Davis Department of Viticulture and Enology.

A recently published study by UC scientists sheds new light on how nitrates move through an agricultural recharge site and how growers might reduce potential leaching. Researchers analyzed data from two grapevine vineyards at Kearney Agricultural Research and Extension Center in Fresno County – one flooded for two weeks, and other for four.

Understanding initial nitrate levels crucial

A key factor in mitigating contamination is understanding how much nitrate is in the soil at the outset, said study author Helen Dahlke, a UC Davis hydrologist and leader of UC Agriculture and Natural Resources’ strategic initiative on water. In areas with little precipitation and cropping systems that require greater amounts of synthetic fertilizer, the accumulation of residual nitrate – resulting from nitrogen in the fertilizer not taken up by the plants – can be quite high.

“The percentage of nitrates in some soils can really increase over the years, particularly if you have many dry years in a row where you don’t have access to irrigation water or natural precipitation flushing some of those nitrates out of the soil,” Dahlke said.

While intense rains in recent weeks have helped dilute nitrate concentrations naturally, farmers looking to participate in recharge during the dry years ahead should consider flooding their fields with greater volumes of water.

“If you’re doing this for the first time – on-farm recharge in the winter – check your residual soil nitrate levels because if they’re very high, you should apply a lot of water in order to make sure that the residual nitrate is diluted down,” said Dahlke, who also added that growers should check their soil properties for suitability of recharge projects.

She recommended using, as a “good first approximation,” the online Soil Agricultural Groundwater Banking Index map, a project led by Toby O’Geen, a UC Cooperative Extension soil resource specialist.

Researchers looking at other ways to reduce nitrates

Even before flooding the fields for recharge, there are several practices that can lower initial nitrate levels and risk of leaching. Cover crops such as alfalfa and triticale, for example, can help take up residual nitrates that accumulate from fertilizing a main crop over time.

Dahlke and Fidelibus – a co-author of the San Joaquin Valley vineyard study – both pointed to pre-flooding irrigation that encourages denitrification, a process in which soil microbes transform nitrates into gaseous forms of nitrogen.

“Those denitrifying microbes need to be stimulated to do the work,” said Dahlke. “What we have found is that if you do a little bit of irrigation before you start the flooding, increasing the soil moisture can get those microbes started and they can take out more nitrate from the soil.”

The timing and quantity of fertilizer applications are also major factors in reducing leaching. Although more growers are following high-frequency, low-concentration practices to maximize uptake by crops, Dahlke said there needs to be more emphasis on incorporating nitrogen transformation processes – such as denitrification – in the nutrient management guidelines that farmers follow.

“Implementing thoughtful nutrient management plans will play a particularly important role in participating farms,” Fidelibus added.

A more holistic view of groundwater recharge

In short, choices made during the growing season can affect those in the winter recharge season – and vice versa. For example, applying compost or other organic amendments to soil can give microbes the “fuel” they need for sustained denitrification.

“What we have found is that our denitrifying bacteria often run out of steam because they don’t have enough carbon to do the work,” Dahlke said. “Like us, microbes need energy to do the work, and for microbes this energy comes from soil carbon.”

Then, adding moisture via recharge to that field with high organic content can stimulate mineralization and nitrification, processes in which microbes transform the organic nitrogen into ammonium – and subsequently nitrates – that the plants can then take up. Those naturally occurring nitrates would thus reduce the need for the grower to apply synthetic fertilizer.

“The winter on-farm recharge experiments have shown that altering the moisture regime in the winter has consequences for the nitrogen budget in the summer growing season,” Dahlke explained. “Theoretically, what we need to be doing is better integrating both seasons by keeping an eye on the soil-nitrogen balance across the whole year so that we can ensure, at the end of the growing season, the residual nitrate in the soil is minimized.”

The study, published in the journal Science of The Total Environment, was part of the post-doctoral work of former UC Davis researcher Elad Levintal. In addition to Fidelibus and Dahlke, other authors are Laibin Huang, Cristina Prieto García, Adolfo Coyotl, William Horwath and Jorge Rodrigues, all in the Department of Land, Air and Water Resources at UC Davis.

2023-03-23T08:08:07-07:00March 23rd, 2023|

UC ANR receives $1 million for VINE Climate-Smart Agrifood Innovation Program

By Pam Kan-Rice

University of California Agriculture and Natural Resources (UC ANR) has been awarded a $1 million UC Climate Action Innovation & Entrepreneurship grant for its VINE Climate-Smart Agrifood Innovation Program. The VINE, a UC ANR program advancing sustainable agriculture and food innovation, will use the grant to develop new technologies and techniques that help California farmers adapt to climate change.

“Expanded programming from The VINE will improve UC ANR’s overall ability to serve our mission of improving the lives of all Californians,” said Glenda Humiston, UC vice president for agriculture and natural resources.

California’s agricultural sector is the largest in the United States, producing over 400 crops that account for 25% of the nation’s food production and 40% of its fruits, vegetables and tree nuts.

However, climate change is expected to have a significant impact on the productivity and resilience of California’s working landscapes. Higher temperatures and changing precipitation patterns are projected to increase water demand for crops and create a more limited growing season that will produce lower yields in some crops. Additionally, climate change may increase weed growth and insect damage, leading to higher uses of herbicides and pesticides.

“We are thrilled to receive the UC Climate Action Innovation & Entrepreneurship Award,” said Gabe Youtsey, UC ANR’s chief innovation officer. “With this grant, we will be able to support even more entrepreneurs and innovators in developing climate-resilient solutions for California’s agriculture and food systems.”

“Our ultimate goal is to build a bioeconomy in California’s food valleys that rivals Silicon Valley in size and importance to the future U.S. economy, while also addressing urgent climate crises and advancing equity for underserved populations,” Youtsey said.

The VINE Climate Smart Agrifood Innovation Program is designed to identify, commercialize, and scale science and technology breakthroughs that make food production more sustainable. The VINE team has already supported entrepreneurs in the areas of controlled environment agriculture, precision agriculture, robotics, biologicals, climate-resilient crops, livestock health, and other topics that have direct or indirect mitigating effects on climate change.

The UC Climate Action grant will enable The VINE program to expand its support for startups and entrepreneurs developing climate-resilient solutions for California’s food system. The program will include the creation of a VINE Climate Solutions Seed Fund, which will provide project support for testing, trialing and demonstrating agrifood technology products or services to support commercial expansion.

The VINE Navigator Service will be expanded to provide matchmaking, mentoring, talent identification, finance connections and technical assistance to entrepreneurs from UC campuses, across California, or startups around the globe that have climate solutions in the agrifood sector.

An example of this work is farm-ng, a farm robotics start-up based in Watsonville that The VINE has been advising. With the networking opportunities facilitated by The VINE, farm-ng was able to secure 20 new customers, generating an estimated $500,000 in revenue. The VINE’s involvement also enabled farm-ng to establish a professional manufacturing facility and employ local talent from disadvantaged communities.

The UC Climate Action award is part of a historic $185 million partnership between UC and the state of California to tackle the climate crisis, from developing new methods for carbon capture to creating innovative coping strategies for drought, wildfire and other impacts of a warming planet. 

The VINE 

The VINE program aims to create a next-generation agrifood technology bioeconomy in California’s food valleys to promote sustainable economic growth, address climate crises, and advance equity for underserved regions and populations. The VINE team will work closely with local and regional partners to identify key industry-driven gaps and opportunities across the food system and provide critical support to startups and entrepreneurs developing new solutions for climate mitigation and adaptation.

For more information, please visit The VINE website: thevine.io.

2023-03-03T08:08:46-08:00March 3rd, 2023|

Richard Smith retires after 37 years of translating science into solutions for vegetable growers

By: Pam Kan-Rice

For four decades, when a new plant disease infects fields of lettuce or a new regulation is issued for agriculture, vegetable farmers across the state have turned to Richard Smith, the University of California Cooperative Extension vegetable crops advisor, for answers. After 37 years of service with UCCE, Smith retired on Jan. 4.

“The whole industry has been dreading Richard’s retirement!” exclaimed Jennifer Clarke, executive director of the California Leafy Greens Research Program. “Richard is a wealth of knowledge and has a great ability to translate science into real-world practical solutions.”

In the past few years, the leafy greens industry has lost millions of dollars of crops due to infections of impatiens necrotic spot virus (INSV) and Pythium wilt. Smith is among the researchers investigating the diseases.

“Richard has conducted important variety trials and led efforts in identifying the ‘top 10’ weed hosts for INSV and strategies to reduce the wintertime ‘green bridge’ for this virus,” Clarke said.  

Smith also has kept policymakers informed of the latest research. In 2021, he testified before the Assembly Committee on Agriculture about leafy green plant diseases. 

A legacy of practical advice, service to community

By serving on numerous grower and county committees and working directly with growers, Smith has built a reputation for understanding growers’ needs and developing practical solutions. He has found it rewarding to see his research results used. 

“The research that I have conducted with my collaborators has helped the water board to better fit their regulations to the reality of farming and to minimize the economic constraints,” Smith said.

Smith and his colleague Michael Cahn, UCCE irrigation and water resources advisor, also have become trusted and respected voices when discussing AgOrder 4.0 with the Central Coast Regional Water Quality Control Board, according to Clarke. AgOrder 4.0 calls for farmers to reduce the amount of fertilizer they apply to crops. 

Field trials conducted by Smith and Cahn showed growers they could use nitrogen from high nitrate wells toward meeting a crop’s nutritional needs. 

“Richard has also done important research to develop nitrogen removal coefficients for AgOrder 4.0,” Clarke said. “Recently he and Eric Brennan of USDA-ARS (Agricultural Research Service) looked at cover crops and identified a system to predict shoot biomass and allow for nitrogen scavenging credits. His work has been pivotal in helping growers comply with AgOrder 4.0 in a cost-effective and realistic manner.”  

Growers also use his research to manage cadmium, a heavy metal that is naturally present in soils. 

“He led the effort to help growers find a best management practice that reduces cadmium uptake in various crops,” Clarke said. “The Central Coast has areas of productive agricultural land where there are naturally occurring shale deposits. The ability to amend soil to reduce plant uptake of this heavy metal has allowed these important production areas to continue to farm nutritious vegetables.”

‘Never had a bad day as a farm advisor’

Growing up in Watsonville, Smith began working at a young age in agriculture for summer jobs.

“I was in 4-H and got to know ag advisors and was always impressed by them,” Smith said. “I was fortunate to be able to work as an advisor for my career. I never had a bad day as a farm advisor – it was very satisfying working with growers and helping them with their issues.” 

Smith joined UC Cooperative Extension as a farm advisor intern in San Diego County and San Joaquin County in 1985 after earning his master’s degree in agronomy from UC Davis. In 1986, he moved to the Central Valley to serve as an interim farm advisor for San Joaquin County, then became a vegetable crops farm advisor for Stanislaus County in 1987. 

In 1989, Smith moved to the Central Coast to serve as UCCE small farms advisor for San Benito, Monterey and Santa Cruz counties. In 1999, he transitioned to UCCE vegetable crops and weed science farm advisor for those three counties, where he served for the rest of his career.

Mentoring the next generation of scientists

“Richard was my mentor, principal investigator on my first collaborative study at ANR, speaker at several of my extension events, and a dear colleague,” said Surendra Dara, former UCCE entomology and biologicals advisor and now director of Oregon State University’s North Willamette Research & Extension Center and professor of horticulture. “He is very kind, friendly, and most importantly has a good sense of humor. He is well-regarded both by his peers and stakeholders.”

Smith has been active in professional organizations, regularly attending the annual meetings of the American Society for Horticulture Science and the American Society of Agronomy. He served as president of the California Chapter of the American Society of Agronomy in 2014 and served on the board of the California Weed Science Society, which granted him the Award of Excellence in 2005 and an honorary membership in 2020.

As a public service, Smith served on the board of the Agriculture and Land-Based Training Association, and taught classes and conducted outreach to their Spanish-speaking clientele. He was a regular guest speaker for vegetable crop and weed science classes at CSU Fresno, CSU Monterey Bay, Cal Poly San Luis Obispo, Hartnell Community College and Cabrillo Community College. 

As he winds down his career, Smith has been mentoring new UCCE farm advisors and scientists who have joined USDA-Agricultural Research Service in Salinas and California State University, Monterey Bay, acquainting them with local issues.

“Richard’s leadership and mentorship has been critical in the development of my career as a new researcher at USDA-ARS in Salinas,” said Daniel K. Hasegawa, research entomologist in USDA-ARS’s Crop Improvement and Protection Research Unit. “Richard has taught me so much about agricultural practices in the Salinas Valley and has connected me with growers and pest control advisers, which has enhanced the impact of my own research, which includes projects addressing thrips and INSV.” 

Smith, who has been granted emeritus status by UC Agriculture and Natural Resources, plans to complete nitrogen research projects that are underway.

2023-03-01T14:07:18-08:00March 1st, 2023|

Porse Named Director of California Institute for Water Resources

By Pam Kan-Rice, UCANR

Erik Porse joined the University of California Agriculture and Natural Resources on Jan. 11 as director of the California Institute for Water Resources.

Porse has built an outstanding career in water as a research engineer with the Office of Water Programs at California State University, Sacramento and an assistant adjunct professor with UCLA’s Institute of the Environment and Sustainability. His research focuses on urban and water resources management. He specializes in bringing together interdisciplinary teams to investigate complex environmental management questions.

Porse earned a Ph.D. in civil and environmental engineering (water resources) from UC Davis and a master’s degree in public policy (science and technology) from George Mason University. His professional experience includes international work and teaching in Mexico, Europe, Japan and East Africa. He has authored over 50 reports and peer-reviewed articles.

“UC ANR is fortunate to have a director with broad professional experience in science and policy at the United Nations, the U.S. government, private sector firms and research laboratories,” said Deanne Meyer, UC ANR interim associate vice president for programs and strategic initiatives. “Erik’s recent research has collaborated with scientists and projects addressing priority areas in the California Water Resilience Portfolio, including safe drinking water, efficient urban water use, sustainable groundwater management, water reuse, beneficial uses of stormwater, and environmental finance.”

The CIWR is the California hub of the national network of water research institutes supported by the federal Water Resources Research Act of 1964 and provides and communicates solutions to complex water issues and will serve a critical role to support applied water research that tackles large problems with systems approaches, including groundwater recharge, water rights, irrigation management, water finance, and drinking water access. The CIWR works with scientists throughout California as well as through the national network to bring defensible solutions and alternatives to California’s water management community.

“Water is a necessity for life and management of water is essential for California’s economy and prosperity,” Meyer said. “Porse’s leadership with multidisciplinary research teams, water policy research, and integrated systems modeling will serve the CIWR and ANR for years to come.”

Porse succeeds Doug Parker, who retired in 2022 after 11 years as CIWR director.

2023-01-11T14:22:57-08:00January 11th, 2023|

San Diego avocado growers look to Cooperative Extension experts to manage water costs

By Saoimanu Sope, UCANR

San Diego County used to be home to nearly 25,000 acres of avocado trees but today there are about 14,000. The drastic decrease is largely due to rising costs associated with avocado production, namely the cost of water.

On September 28, avocado growers gathered at the San Diego County Farm Bureau offices for an Avocado Irrigation Workshop facilitated by Ali Montazar, University of California Cooperative Extension irrigation and water management advisor for Imperial, Riverside and San Diego counties.

“All of our information being developed right now is focused on [irrigation] efficiency. Growers want to know how much water they need and what tools they should use to be more efficient,” explained Montazar.

Workshop attendee John Burr, who has been growing avocados for 15 years, confirmed that irrigation represents over half of his annual production costs and that meeting the needs of his trees is a constant challenge.

“The sophisticated research in avocado irrigation that Dr. Ali Montazar is conducting is the first of its kind that the University of California has carried out specifically in avocados. His presentation allowed us attendees the opportunity to see and learn about the technology he is employing – from soil moisture sensors to the California Irrigation Management Information System level equipped station.”

Burr is hopeful that Montazar’s research will help avocado growers accurately determine the evapotranspiration in an avocado grove or water use specific to avocados, critical parts of how growers select tools to determine irrigation runtimes.

“His presentation that showed his research finding of the avocado [crop coefficient or] Kc while very early into his project, was really interesting. It indicates the possibility that we may need to vary the Kc for different times in the growing season, but he is just beginning a two-to-three-year project that will hopefully deliver solid data on what the Kc for avocados is,” said Burr.

Colorado River uncertainty looms

San Diego’s avocado production is primarily managed by small farms. According to Montazar, this adds a level of complexity to water management because there is a greater emphasis on irrigation tools and strategies being user-friendly and cost-efficient.

“We don’t know the future,” said Montazar. “But we need to be prepared for all consequences. The Colorado River is experiencing a significant water shortage, and this could impact the water supply source for San Diego County from the Imperial Irrigation District Transfer in the future. It is wise to consider enhancing irrigation efficiency as the most viable tool to manage limited water supplies in Southern California.”

Water has always been an issue. In the 1970s, California’s water program paved a way for an additional 98,000 acres of agricultural land.

According to a 1970 study analyzing the cost of avocado production in San Diego County, water costs “averaged 3½ acre feet per acre at $60 an acre foot,” which came with the assumption that water costs would remain relatively low and affordable for a long time.

Unfortunately, that is no longer the case. The county of San Diego gets the majority of its water from the Colorado River, which is concerning given five-year projections of the river reaching critically low reservoir levels by 2027.

In fact, beginning in 2023, the San Diego County Water Authority will be raising the rates for water, prompting growers to invest in more efficient irrigation practices (Table 1).

Table 1. Cost for untreated and treated water in San Diego County in 2022 and 2023.

2022 2023
Cost for untreated water

(per acre-foot)

$1,523 $1,579

($54 increase)

Cost for treated water

(per acre-foot)

$1,833 $1,929

($96 increase)

NOTE: An acre-foot is about 325,900 gallons of water.

Training growers on irrigation a top priority

There are no loopholes or short cuts when it comes to irrigation because irrigation is the key to tree health. Ben Faber, Cooperative Extension subtropical crops advisor for Ventura and Santa Barbara counties, points out that tree health is how growers stay in business.

“You can mess up your fertilization program, and you can mess up your pesticide program, but if you mess up your irrigation program, you’re out of business,” he said.

According to Faber, efficient irrigation requires a strong grasp on salt management.

“We import water that has a lot of salt in it. So, you’ve got to figure out how to put the right amount of water on the root zone without causing root health problems,” said Faber.

This process requires meticulous care, as anything that gets below the root zone can cause groundwater contamination – something growers do not want to be responsible for.

While the latest irrigation technology, such as smart controllers, could help growers, Faber said that training and educating farm managers should be the priority.

As Faber puts it, managing irrigation should be “like brushing your teeth” – something that growers do naturally and competently. Many growers are over-irrigating or wasting time trying to resuscitate dying trees. It’s important to learn the needs of the tree and, in some cases, it might be best to stop watering all together.

The first step to water efficiency is acquiring knowledge and identifying needs. Because an over-irrigated tree looks just like an under-irrigated tree, it’s crucial that growers learn to recognize the difference and plan accordingly.

This is where Cooperative Extension advisors and researchers come in. Opportunities like the Avocado Irrigation Workshop are ideal for growers looking for answers or support.

For more information and to learn about future workshops in San Diego County, visit https://cesandiego.ucanr.edu/.

2022-10-20T10:39:46-07:00October 20th, 2022|

New UC Study Helps Growers Estimate Cover Crop Costs and Potential Benefits

By Pam Kan-Rice, UCANR

Cover crops offer many potential benefits – including improving soil health – but not knowing the costs can be a barrier for growers who want to try this practice. To help growers calculate costs per acre, a new study on the costs and potential benefits of adding a winter cover crop in an annual rotation has been released by UC Agriculture and Natural Resources, UC Cooperative Extension and the UC Davis Department of Agricultural and Resource Economics.

Led by UC Cooperative Extension farm advisors Sarah Light and Margaret Lloyd, the cost study is modeled for a vegetable-field crop rotation planted on 60-inch beds in the lower Sacramento Valley of California. Depending on the operation, this rotation may include processing tomatoes, corn, sunflower, cotton, sorghum and dry beans, as well as other summer annual crops.

“This cost study can be used by growers who want to begin cover cropping to determine the potential costs per acre associated with this soil-health practice,” said Light, a study co-author and UC Cooperative Extension agronomy advisor for Sutter, Yuba and Colusa counties.

“Based on interviews with growers who currently cover crop on their farms, this cost study models a management scenario that is common for the Sacramento Valley. In addition, growers who want to use cover crops can gain insight as to what standard field management practices will be from planting to termination.”

At the hypothetical farm, the cover crop is seeded into dry soil using a grain drill, then dependent on rainfall for germination and growth.
“Given the frequency of drier winters, we included the cost to irrigate one out of three years,” said Lloyd.

A mix of 30% bell bean, 30% field pea, 20% vetch and 20% oats is sown in the fall. Depending on winter rainfall, soil moisture and the following cash crop, the cover crop is terminated in mid to late spring. The cover crop is flail mowed and disced to incorporate the residue into the soil.

The study includes detailed information on the potential benefits and the drawbacks of cover cropping.

Another consideration for growers is that multiple programs such as CDFA’s Healthy Soils Program, various USDA-funded programs (EQUIP, the Climate-Smart Commodities, etc.), and Seeds for Bees by Project Apis m. offer financial incentives for growers to implement conservation practices, such as cover crops.

“This study can provide growers with a baseline to estimate their own costs of using winter cover crops as a practice. This can be useful to calculate more precise estimates when applying for some of these programs and/or weigh the costs per acre with expected benefits in terms of soil health, crop insurance premium discounts or other benefits provided by the cover crops,” said Brittney Goodrich, UC Cooperative Extension agricultural and resource economics specialist and study co-author.

“Last year, the USDA’s Pandemic Cover Crop Program gave up to a $5/acre discount on crop insurance premiums for growers who planted a cover crop, and there is potential this will get extended going forward,” Goodrich said.

A list of links to resources that focus specifically on cover crops is included in the study. Five tables show the individual costs of each cultural operation from ground preparation through planting and residue incorporation.

The new study, “2022 – Estimated Costs and Potential Benefits for a Winter Cover Crop in an Annual Crop Rotation – Lower Sacramento Valley,” can be downloaded from the UC Davis Department of Agricultural and Resource Economics website at coststudies.ucdavis.edu. Sample cost of production studies for many other commodities are also available on the website.
This cost and returns study is funded by the UC Davis Department of Agricultural and Resource Economics.

For an explanation of calculations used in the study, refer to the section titled “Assumptions.” For more information, contact Don Stewart in the Department of Agricultural and Resource Economics at destewart@ucdavis.edu, Light at selight@ucanr.edu, or Lloyd at mglloyd@ucanr.edu.

2022-10-06T08:30:49-07:00October 6th, 2022|

Farmers Invited to Tour Cover Crops in Sacramento Valley March 3

Farmers and ranchers are invited on a tour to learn how to use cover crops to build soil health. A full-day tour of several cover crop sites in orchards and annual crop fields in the Sacramento Valley is being offered on March 3 by the Western Cover Crop Council’s Southwest Region Committee.

“The goal of this tour is to demonstrate ways to use cover crops effectively in annual crops and orchards in the Sacramento Valley,” said tour organizer Sarah Light, UC Cooperative Extension agronomy advisor.

“This tour will cover a range of topics, including cover crop selection, equipment needed to manage cover crops, considerations for cover cropping in the region, and the importance of building soil health,” said Light, who is also chair of the Western Cover Crop Council’s Southwest Region Committee and a board member of the Western Cover Crop Council.

Cover crop species, cultivars and mixes including legumes, grasses and brassicas will be showcased in Colusa County, with farmers, UC Cooperative Extension specialists and researchers giving presentations.

The tour bus will depart from the Colusa County Cooperative Extension Office at 100 Sunrise Blvd., Suite E, Colusa, CA 95932 at 8 a.m. and return at 7:30 p.m.

Priority registration is limited to farmers and ranchers until Feb. 1. Other interested people may join after Feb. 1. ​The $50 registration fee includes morning refreshments, transportation, lunch and dinner. To register or to see the agenda, visit https://surveys.ucanr.edu/survey.cfm?surveynumber=36190.

Source: UCANR

2022-01-25T08:28:47-08:00January 25th, 2022|

California Marijuana Growers Can’t Take Much to the Bank

Study analyzes tension between legal cannabis, financial industry

Legalization of marijuana in California has helped some financial institutions in the state increase their assets. At the same time, many banks, feeling stifled by federal regulations, deny services to licensed growers, manufacturers and retailers, a new study shows.

“Licensed cannabis businesses need to bank their cash and take out loans to build their businesses, but many banks worry that by doing business with the cannabis industry, they’ll be flouting federal laws,” said co-author Keith Taylor, University of California Cooperative Extension community development specialist. “Banks that won’t accept legal cannabis cash deposits and don’t provide loans, aren’t monetizing their deposits. Marginalized cannabis communities are missing out on capital.”

Of the banks and credit unions contacted by researchers at The Ohio State University and University of California for the study, most were not knowingly involved in the cannabis industry.

Combining data on bank holdings and interviews with growers and bankers, the research –published online in the journal Agricultural Finance Review – paints an initial picture of how the marijuana and financial industries co-exist in California now, and suggests regulatory changes could create new opportunities for both.

The data analysis did make one thing clear: Legalization of the estimated $16 billion marijuana industry in California has been a boon to financial institutions. But restricted access to banking, from checking accounts to loans, perpetuates inequities for those participating in the legal production of cannabis – while unlicensed, illegal growing and exporting continues as an enormous cash-based sector of the industry.

“We need a better understanding of the economics of this industry and all of the questions and implications related to it so the impacts of policy choices are intentional,” said lead study author Zoë Plakias, assistant professor of agricultural, environmental and development economics at The Ohio State University.

“If we want to have a more equitable society and allow communities to keep more of the value of this crop, how do we do that? We first need to characterize what happens in communities when you legalize cannabis.”

Plakias and Margaret Jodlowski, assistant professor of agricultural, environmental and development economics at Ohio State, conducted the study with researchers Taylor, Parisa Kavousi and Taylor Giamo at the University of California, Davis.

“The tensions we are observing in the cannabis banking space comes about in part due to the inequity felt between large cannabis and small and legacy operators,” Taylor said. “The ‘big guys’ are able to absorb a great deal more than ‘Ma and Pa.’”

Legalization benefited financial institutions indirectly

Marijuana is listed as a Schedule 1 drug under the federal Controlled Substances Act. Even in states that have legalized recreational and medicinal use of cannabis, it is still a federal crime to possess, buy or sell marijuana. California legalized recreational cannabis for adults in 2016, and the industry is overseen by the Department of Cannabis Control.

Data used by the researchers for this study included bank and credit union call data for the years 2015-2020. The analysis showed that assets held by financial institutions in counties that legalized marijuana had increased in that period by almost $750 million and loan activity rose by about $500 million.

These benefits are presumed to be spillover effects of better overall economic health that followed cannabis legalization in specific counties, Jodlowski said, because the interviews with financial institutions indicated there has been little appetite among banks to associate with the marijuana industry.

“It’s important to remember when talking about loans that it’s not possible to identify whether they were for cannabis operations, and they’re probably not based on what we heard from stakeholders,” she said. “It’s more of a general relationship. The bank is doing better, and they’re able to lend out more in general and earn more interest from loans.”

When they narrowed the analysis to banks that operate only in California, the researchers found that for each single new manufacturing or retail license, bank assets and loan capacity grew by tens of thousands of dollars. Cannabis cultivation licenses, on the other hand, had no impact on California banks’ holdings.

“This suggests that a lot of the economic benefits of legalization come from other stages of the supply chain – and it’s not a foregone conclusion that farmers benefit from legalization,” Plakias said. “There’s a need to think about how farmers who are producing cannabis in the legal market, often operating in rural environments with a weaker economic base to start with, can be supported in the context of economic development.”

The team also interviewed marijuana farmers and representatives from banks and credit unions in Humboldt, Trinity and Mendocino counties – the “Emerald Triangle” region known historically in California and nationally for the quantity and quality of marijuana produced there.

Cannabis growers face obstacles, risk-adverse bankers

On the financial side, bankers reported being hamstrung by ambiguous federal guidelines that pose a real risk to financing cannabis, largely because banks are required to report suspicious transactions to the federal government. They might be seen as players in a criminal enterprise even by providing banking services to employees who work for licensed members of the cannabis industry, or they could lose big on lending if cannabis-related assets backing a loan were seized by federal agents.

“What’s consistent across all financial institutions is that it’s very costly, and does involve taking on some risk, to be in compliance with all of the guidelines – the risk being that even if you follow all guidelines to the letter, there’s no assurance that you can’t still get in trouble,” Plakias said.

Cannabis growers they interviewed reported paying fees ranging from $200 to $3,000 per month for bank accounts, which they found to be cost prohibitive. These limitations leave most licensed marijuana producers and retailers in the lurch, forcing them to rely on nontraditional financing arrangements – maybe investing in friends’ endeavors – or risk running cash operations.

“There is a lot of evidence that cash can be better for a local economy because cash tends to stay local – but we are now a credit-based economy,” Jodlowski said. “In this day and age it’s incredibly harmful for local economic development to have an entire sector that’s denied access to credit, because so much of developing as a household, or individual, or industry requires credit and requires demonstration of credit-worthiness.

“That’s a fundamental harm of these sorts of restrictions.”

This research is part of a larger project on cannabis and community economic development in California supported by a grant from the UC Davis Cannabis and Hemp Research Center. As part of this project, the California authors on this paper recently published a review of the opportunities and challenges marijuana legalization poses for localities in which the crop is cultivated and sold.

“It’s clear we need policies making cannabis banking and finance more equitable,” Taylor said. “It’s also clear that ‘Ma and Pa’ enterprises need to associate together in formal organizations so they can achieve economies of scale and harness their political power to endure the transition to legal.”

Despite the stigma attached to marijuana, even when legal, its status as California’s most valuable crop – estimated to be worth more than almonds and dairy combined – attracts outsiders who are better-equipped to come up with funding to get their operations started and compete with legacy growers who have lived and worked in California for generations.

This trend necessitates development of evidence-based policies that take all participants into consideration, the Ohio State researchers say.

“Our findings speak to confusion around existing policies and the need for streamlining, clarifying and having a more unified approach to regulating this industry,” Jodlowski said.

2022-01-20T13:14:22-08:00January 20th, 2022|

UC Scientists Receive Big Climate-Smart Grant

UC ANR Scientists Receive $1.5M NIFA Grant For Climate-Smart Agriculture

By Pam Kan-Rice, UCANR Assistant Director, News and Information Outreach

To help California farmers and ranchers adjust to uncertain weather and climate events, the USDA National Institute for Food and Agriculture has awarded $1.5 million to a team of scientists led by UC Agriculture and Natural Resources. The project is one of six projects funded by USDA NIFA’s $9 million investment to expand adoption of climate-smart practices.

“The Cooperative Extension system and the USDA Climate Hubs have unmatched capacity to reach agricultural, Tribal and underserved communities, as well as educators and students, and our nation’s farmers directly,” said Agriculture Secretary Tom Vilsack in a statement announcing the grant recipients. “This partnership will strengthen climate research efforts and accelerate the development, adoption and application of science-based, climate-smart practices that benefit everyone.”

California has the largest and the most diverse agricultural economy in the nation, with revenue exceeding $50 billion, which is larger than the revenues of the other 10 Western states combined. Despite its size, the state is highly vulnerable to climate change.

“California farmers and ranchers need locally relevant climate information and adaptation resources,” said Tapan Pathak, UC Cooperative Extension specialist based at UC Merced and principal investigator for the grant. “Similarly, technical service providers are often ill-equipped to assist farmers and ranchers when asked questions about climate change, weather variability and local implications to implement those decisions.”

To train the next generation of workers to be climate-ready, colleges expose students to climate science and agricultural science separately, but often lack opportunities for the students to learn about the nexus of climate and agriculture.

Pathak plans to provide classes – along with opportunities for practical learning experiences – to farmers, ranchers, agricultural service providers and students.

“An overarching goal of this project is to develop robust multifaceted pathways to climate-smart agriculture by integrating Extension and participatory education program development and delivery to enhance agricultural resilience to climate change,” he said.

“To tackle this ambitious goal, we have a large team of multidisciplinary leading scientists and experts from local, state and federal agencies, the California Climate Hub and the University of California ready to work with diverse stakeholder groups.”

UC Cooperative Extension specialists Leslie Roche, Vikram Koundinya and Daniele Zaccaria at UC Davis; Mark Cooper, UC Davis professor; and Steven Ostoja of the USDA California Climate Hub, are co-principal investigators with Pathak.

They will begin with a needs assessment for all of their stakeholders, including socially disadvantaged farmers and ranchers. Through three components, the project team will work to understand growers’ perception of climate change-related threats, build capacity for technical assistance providers to advance climate-smart agriculture research and delivery of science-based information, and educate community college and undergraduate university students.

Engaging with farmers and ranchers

With the help of community partners including the Community Alliance of Family Farmers and the California Association of Resource Conservation Districts, the team will reach out to socially disadvantaged and limited-resource producers, including beginning and first-generation farmers and ranchers to attend regional workshops, led by instructors who are fluent in Spanish and Hmong.

Workshop content will address a broad range of topics including climate change trends and local impacts, drought planning strategies, optimization of agricultural productivity with limited resources and farm and ranch economic sustainability.

“California has so much diversity in terms of scale, crops, geography, micro-climates, market conditions and natural resource considerations that a one-size-fits-all approach will not work,” wrote Renata Brillinger, CalCAN executive director, in her letter supporting the project. “We support your plans to address the needs of producers though region-specific workshops.”

Five county-based UC Cooperative Extension academics will serve as regional leads for the farming workshops across broad geographic regions:

  • Andre Biscaro, UCCE irrigation and water resources advisor serving Ventura County
  • Ruth Dahlquist-Willard, UCCE small farms advisor for Fresno and Tulare counties
  • Surendra Dara, UCCE entomology and biologicals advisor serving San Luis Obispo and Ventura counties
  • Jairo Diaz, director of the UC Desert Research and Extension Center in Southern California
  • Jhalendra Rijal, UCCE integrated pest management advisor serving San Joaquin and Merced counties

Workshops for ranchers and rangeland managers will be coordinated by UCCE rangeland and livestock advisors in their respective regions:

  • Dan Macon, UCCE livestock and natural resources advisor for Plumas, Nevada, Sutter and Yuba counties, will organize workshops for the Sierra Nevada mountains and foothill region
  • Grace Woodmansee, UCCE livestock and natural resources advisor for Siskiyou County, will organize workshops in Northern California
  • Rebecca Ozeran, UCCE livestock and natural resources advisor for Fresno and Madera counties, will organize workshops in Central California
  • Devii Rao, UCCE livestock and natural resources advisor for Monterey, San Benito and Santa Cruz counties, will organize workshops in the coastal region
  • Brooke Latack, UCCE livestock advisor for Imperial, Riverside and San Bernardino counties, will organize workshops in Southern California

Training technical service providers

The team will offer climate-smart agriculture trainings for technical service providers on how to prepare for key stressors in California agriculture such as floods, droughts, wildfires and heatwaves; effective climate communications; invasive pests and disease management under future climate; and weather and climate resources and decision support tools for managing risks.

One of the aims of this component is to encourage more coordinated efforts among different agencies to deliver climate change resources to their respective stakeholders, Pathak said.

California Cattlemen’s Association has expressed its support for the project.

“Given ranchers’ strong relationships with and reliance upon technical services providers – particularly those housed within the USDA and University of California – CCA also sees great value in the project’s goal of building capacity within those organizations to assist ranchers in addressing the challenges of climate change,” wrote Kirk Wilbur, CCA vice president of government affairs.

Nurturing future generations

For college students, there will be the UC Merced Summer Institute on Climate and Agriculture certificate course organized by Karina Diaz Rios, UC Cooperative Extension specialist based at UC Merced; the UC Davis credit-based course “Science and Society: Climate Change and Agriculture;” and a certificate course for community college students, which will be overseen by the Bay Area Community College Consortium of 28 colleges.

“We will join you in this exciting work and shared vision towards inclusive education in climate resilient agriculture,” wrote Nancy Gutierrez, statewide director of the Agriculture, Water, Environmental Tech sector of the California Community College System.

Students from the three courses will be selected for paid summer internships to engage in Cooperative Extension projects.

“Through climate-smart agriculture education, the workforce will be prepared to advance climate science and research efforts for future generations,” Pathak said.

2022-01-18T08:08:21-08:00January 18th, 2022|
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