New gas tax threatens to eliminate benefit of lower fuel costs to California farmers and consumers
In an effort to reduce greenhouse gas emissions to 1990 levels by the year 2020, California state legislators passed a gas tax law known as AB 32. Starting in 2015, the law’s penalty on carbon emissions will apply to all cars and trucks in the state, meaning that everyone who fills up will pay more. Exactly how much more? Nobody knows yet. It could be as high as 50 cents per gallon with at least a 15-cent increase, beginning in 2015.
Joel Nelsen, president of California Citrus Mutual, keeps a sharp eye on legislation that hurts agriculture. He commented, “It’s scheduled, unfortunately, to be implemented, but at what level we don’t know. Assembly member Jim Patterson (R-23rd District) and Senator Andy Vidak (R-Hanford) are going to initiate some additional publicity on it, and they are going to introduce legislation in January to carefully analyze the California Environmental Protection Agency’s Air Resources Board (ARB) is implementation of the gas tax.”
“Both Patterson and Vidak recognize, as do we all, that the additional dollars in everyone’s pocket relative to lower fuel prices, help the economy. People have more disposable income, whether they are purchasing fresh fruits and vegetables or something for the holidays; lower fuel costs make consumers’ expenditures higher because they have more dollars,” noted Nelsen. “By implementing this gas tax, you’re going to stifle this economic spurt that we typically see in the last few months of the calendar year. Jim and Andy, I think, are aware of that.”
“It’s an adverse tax in that it just goes to the general fund, with no redeeming value. You know, we already pay a tax that on gasoline that goes to roads and transportation. We pay a tax on cans and bottles that we buy at the supermarket that goes to recycling,” said Nelsen. “When we pay this gas tax, it’s just going to the general fund for a group of individuals to parse out–whether we reap any benefit or not. So this is not a healthy economic approach in my estimation, and this is why we’ll be supporting the Senator and Assemblyman in what they are doing.”
“The governor endorses it because it creates a larger fund for him to underwrite the high-speed rail program.The governor feels that high speed rail helps with cleaner air because it will take more cars off the road as more people ride the train,” Nelsen said. “The newly-generated gas tax dollars thus become a subsidy for high speed rail.”
Nelson said the the ARB has some leeway to decide the size of the gas tax.
“Here we are, all of the sudden we are reaping something positive, paying a whole heck of a lot less for our fuel, and the state wants to make it that much more expensive,” said Nelsen.
California Citrus Mutual Responds to Navel Orange Crop Estimate
California Citrus Mutual (CCM) President Joel Nelsen issued the following statement in response to the 2014-15 California Navel Orange Objective Measurement Report released today by the National Agricultural Statistics Service, Pacific Regional Field Office.
“Today’s release of the navel orange crop estimate by USDA is a necessary and mandated announcement that historically has provided an accurate assessment of California’s Navel Orange crop. Since California supplies 85% of the Nation’s fresh citrus this release is usually received with anticipation and fanfare.
“Generally speaking it sends signals to the consumer and to the markets around the country and world that California citrus growers are back. The number released is developed via a painstaking field assessment and formula that rely upon a bevy of statistics compiled over the years. This year that data base is being disrupted because of the drought and therefore the accuracy of the total number is suspect, in our view.
“The statistical team relies upon specific acreage for fruit-set and limb count which, over the years, establishes a record for the average number of fruit per tree. However, this year there is no way of knowing if that acreage has been affected by the drought, whether it has had a full complement of water, or if it has been removed. Additionally, the statisticians have no way of knowing how much of total acreage has been adversely affected.
“After canvasing a significant number of producers and shippers CCM believes the crop estimate is high. We know acreage has been removed from production but getting figures for a range has been difficult. We know the lack of water has affected fruit size during the growth stages but surveying 126,000 acres is almost impossible. We also agree there is more fruit on the tree as compared to last year, however fruit size is a concern. All of this effects the number of cartons ultimately packed.
“CCM believes that a ‘normal’ crop will materialize in the first four months of the season. The season will start early if we begin to have cooler nights and the fruit breaks into a bright orange color. It also appears that the hot temperatures during the summer has created a highly flavorful crop. Size structure through February will be positive for the consumer. Exterior quality is also excellent.
“Water costs have been obscenely high which will be reflected in sales prices in order for growers to offset the increased expense. The industry is mindful, however, of its obligation to move a quality product to the market at a reasonable price.
“CCM also believes that the amount of Mandarin varieties available to the consumer will be larger than in past seasons due to the increased number of trees now in production. Again, prices will reflect higher water costs.
Last year’s Navel Orange and Mandarin crop was adversely affected by the December freeze. The 2014-15 crop will have a higher number of Mandarins available than last year’s forecast, while Navel Oranges will be equal to or slightly less than last year’s forecast due to factors attributed to the drought.
“All of the above is predicated, of course, on a moderate winter without freeze related losses.”
Western Growers has praised a deal struck by California lawmakers that would see a US $7.5 billion package to bolster the state’s water supply and infrastructure.
California residents will now vote on the matter in November.
In a statement, Western Growers president and CEO Tom Nassif said he was delighted with the passage of legislation by the California Assembly and Senate, which includes US$2.7 billion for water storage.
“We are especially pleased that the storage portion of this legislation is a continuous appropriation preventing the legislature from withholding funding. Passage of this legislation is an essential first step in adding capacity to our state’s existing storage infrastructure,” Nassif said.
“This legislation replaces the existing bond slated for this November’s statewide ballot. Our Association will work diligently with Governor Jerry Brown to garner support for the initiative.”
California is currently facing one of the worst droughts in decades, and many in the industry have raised serious concerns over the unsustainable rate at which the water supplies are being depleted.
Nassif also commended members of both parties who came together to support compromise legislation he described as ‘critical’ not only for growers but for all of the state’s residents and water users.
“Western Growers particularly appreciates Governor Brown’s leadership on this issue. We look forward to his support of this measure as we work together to gain voter approval for the initiative this November,” he said.
California Citrus Mutual president Joel Nelsen added his praise to the legislation that he said met the needs of all the state’s regions.
“I believe we have turned a corner in our State in which we quit destroying the land and the people that provide the world food and fiber,” he said in a press release.
“I applaud the hard work and dedication of Assembly Members Connie Conway and Henry Perea and Senator Andy Vidak in leading the legislature in an effort to strengthen a bond proposal that we feel was previously incomplete.
“To the Governor’s credit he and his team listened to stakeholders and came a long way from the $2 Billion for storage that was included in his original proposal to a more comprehensive package that addresses our Valley and the state’s needs for a real solution.”
He added the state now had more money for storage, a path towards cross valley connectors, and funding for ground water cleanup in disadvantaged communities.
“The previous proposals contained less money, no pathway for the connector, and in reality made too few happy,” Nelsen said.
“This is a positive step forward and I believe the Speaker and the Governor when they say we will work together to achieve all our goals.”
CDFA filed a proposed emergency amendment TODAY to expand the ACP quarantine area in response to an “infestation” of the Asian citrus psyllid (ACP), Diaphorina citri, detected in the Farmersville/Visalia area (June 4, 2014), Tulare County. One adult female was found in the area. The proposed 14-mile expansion will include the Visalia area, and the state’s vast ACP quarantine will cover 46,544 sq. miles.
The regulation defines emergency as” a situation that calls for immediate action to avoid serious harm to the public peace, health, safety, or general welfare.” The government code provides,”if the emergency situation clearly poses such an immediate, serious harm that delaying action to allow public comment would be inconsistent with the public interest, an agency is not required to provide notice.”
CDFA Secretary Karen Ross believes that this emergency clearly poses such an immediate, serious harm that delaying action to give the notice would be inconsistent with the public interest. Therefore, Ross proposed that the CDFA Director may adopt reasonably necessary measures such as bypassing the mandatory notice five working days prior to emergency action in order to carry out emergency provisions. Additionally, she requested that the Director be permitted to establish, maintain, and enforce quarantine, eradication, and such other regulations necessary to circumscribe and exterminate or prevent the spread of any pest which is described in the code.
This comes after the California Citrus Industry’s recent backlash against the Executive Committee of the California Citrus Pest and Disease Prevention Committee’s proposed easing of the state’s ACP quarantine and eradication efforts.
And, while CDFA uses the word, “infestation”, Joel Nelsen, President of California Citrus Mutual, commented at the recent United Fresh Convention in Chicago, “There were two more ACP finds found in the northeast part of Tulare County. They were individual finds. Intensive trapping and tapping on the trees, looking for the ACP, hasn’t found any more. So one would argue that we’ve got a population—given the finds in the last year—but we’re still talking single digits.” Nelsen believes this demonstrates the eradication programs are working. “We’re supposed to find the ACP before finds a commercial citrus industry, and we’re doing that.”
Nelsen said the Executive Committee’s recent proposal to significantly modify the program was, “based upon some subjective analysis by a team of scientists who in fact believe that there’s more out there than what we can find.”
“So,” he continued, “we’re obligated to prove a negative; and as long as we do the intensive trapping program, as long as we continue the mandated treatment program, as long as we’re aggressively looking for the Asian citrus psyllid—I don’t see how, and industry doesn’t buy into the fact, you have an endemic population. We’re not finding them in volume; everything is isolated.”
“So, when the industry first became aware of this possible change in the treatment zones of the quarantine mandates, the industry challenged CDFA.”
Now, not only does the ACP program remain intact, but TODAY, CDFA Secretary Ross proposed measures for an unhindered and immediate eradication response by CDFA to ACP discoveries.
Featured Photo Credit: Ted Batkin, Citrus Research Board, “Invasive Pests in California” 1/10.
California Citrus Mutual and Senators Fuller and Vidak to hold Press Conference June 6, 11:00 a.m.
Please join California Citrus Mutual, Senator Andy Vidak and Senator Jean Fuller for a press conference on the current water crisis and its devastating impact to the Central Valley’s $1.5 billion citrus industry and local communities.
The event is on Friday, June 6 at 11:00 a.m.in a Bakersfield citrus grove that is being pulled out of production due to zero surface water allocation [21662 Bena Rd., Bakersfield, CA]. The scene of removed groves is, unfortunately, becoming a familiar one throughout the Valley as citrus growers are faced with zero water allocation for the first time in the Central Valley Water Project’s history.
“The situation our industry is now faced with is not the result of a drought,” says CCM President Joel Nelsen. “It is the result of inaction and indifference by state and federal regulators who have time and again demonstrated that the production of food and fiber is not a priority.”
California Citrus Mutual estimates that nearly 50,000 acres of citrus will receive zero water allocation this year. “The loss of citrus production in the Central Valley will undoubtedly have a ripple effect that will be felt in many local communities,” continues Nelsen.
“Due to the zero water allocation, thousands of acres of citrus trees have already been destroyed resulting in higher food prices and lost jobs,” says Senator Fuller. “Now is the time for regulators to act on behalf of the farmers and residents of the Valley, get the water moving to where it is needed most, and stop the planned removal of thousands of more acres of citrus.”
“The citrus industry is an economic driver in the Central Valley,” says Senator Vidak. “The loss of prime citrus production as a result of zero water allocation will have a lasting and devastating impact on jobs and our communities. This is not simply an agricultural problem; the impact will be felt by each and every one of us if water is not made available to our Valley.”
Speaking at the press conference will be CCM President Joel Nelsen, Senator Andy Vidak, and Senator Jean Fuller along with Valley citrus growers who have been directly impacted by this water crisis.
Citrus Industry is Fired Up Over Softened ACP Control Policy
By Patrick Cavanaugh
It seems that CDFA officials are giving up on controlling the Asian Citrus Psyllid (ACP) in Central California citrus growing areas! It sure looks like it.
Ever since the May 12 ACP trappings in the Lindsay area of Tulare County, there has been a major back-step in what has been an aggressive mandatory spray program to control any possible live psyllids within an 800-meter radius around the trap.
Now CDFA is suggesting that the spray programs should be voluntary and only 400 feet around the trap find.
According to Joel Nelsen, president of the Exeter-based California Citrus Mutual, “The conversation relative to the change in eradicating or treating for the ACP came about with a discussion between a few members of the scientific community and the department.”
“Frankly, the industry was unaware of this possible change in the program. When it was first released to the AG commissioner, it shocked everybody–is my understanding,” Nelsen said.
“And as a result, last Friday afternoon, the executive committee members from our pest and disease management committee had a very direct conversation with senior leadership of the CDFA. I understand that the conversation was extremely candid, somewhat emotional; if the industry to is going to be supporting a program to the tune of 15 million dollars, they want a say in how the program is run. And evidently, the Department of Agriculture is making some subjective decisions that we don’t believe are appropriate.”
“From my perspective, there were mistakes made at the onset of this program that we had to learn from; and if we don’t take seriously—psyllid control, psyllid control, psyllid control!—we’re going to end up in the same type of quandary that our colleagues in Florida, Texas, Mexico and even Brazil are in.
Too many psyllids, an endemic population, some of which will contract citrus greening disease and eventually contaminate citrus trees, could devastate central California’s $2 Billion industry. “If we even allow one psyllid to continue to foster a population, then we have failed at our effort. And so from the perspective of Citrus Mutual, we are in an eradication mode,” Nelsen said.
“We are in a position in which we can find isolated psyllids and treat, and we are in position where continuous trapping and tapping (with bats and trays in searching for psyllids) and intensive trapping is not finding an endemic population. So for the department to argue that the population is endemic, its a ‘what if’ scenario that we don’t think is appropriate.”
Nelsen said that the pushback by his pest and disease management committee might have made a difference. “I haven’t received anything, but I think that conversation last Friday afternoon yielded some intended results. There’s a reconsideration, and I give a lot of credit to the industry members who stood up the department; but until it happens, its not real,” he said.
The report issued today by the California Department of Food & Agriculture and the University of California, Davis presents an accurate water crisis picture of the reality resulting from federal decisions that will reduce the production of food and fiber, according to California Citrus Mutual.
Unfortunately, this picture is not complete. The report indicates the losses which have been incurred to-date, but does not and cannot begin to predict future impacts as permanent crops continue to be ripped out of production as we enter into the hottest months with zero access to surface water,” says CCM President Joel Nelsen.
“The report is a compilation of what the authors know is happening as a result of April calculations. Since then, the Bureau of Reclamation has challenged the Administration’s focus on obesity prevention, school lunch programs, and other campaigns focused on healthy eating by holding water that could otherwise be used for the production of food and fiber.
As such, growers are being forced to make difficult farming decisions that have and will continue to result in reduced plantings of annual crops and the removal of permanent crops.
“If there is a flaw in the report, it is the assumption that ground water supplies are available to offset surface water loss, which may be true in some production areas but certainly not all.
The authors do fairly acknowledge that the impacts to the Friant service area in particular are not yet calculated into this water crisis report.
“The report demonstrates the costs associated with the inability of the Central Valley to produce a viable crop due to zero or minimal water allocation.
As the actions of the shortsighted agencies manifest themselves into reality, the cost will be borne for years to come until permanent crop plantings are replaced and production is regained. Production, revenue, and jobs are in abeyance for several years to come.”
Image courtesy of TeddyBear[Picnic]/FreeDigitalPhotos.net
They tie themselves up in knots relative to “what if” scenarios while trying to convey a desire to create a solution when in fact their solution has been and continues to be zero.
Over a million acre feet of water was added to storage since the Armageddon announcement earlier this year and yet not one drop can be made available to senior water right holders thereby forcing the Eastside of the San Joaquin Valley to go dry?
As managers they are woefully inadequate to be a positive influence inasmuch they have repeatedly allowed water to be released or not captured in the past several months that could have lessened the extensive nature of this drought.
They made the decisions to lose water; they made the decisions to keep water; and they made the decisions that negatively impact thousands of people all the while occupying an office hundreds or thousands of miles away from the impact center.
Ronald Reagan was right: “Government is the problem.” Now will the state and the Brown Administration allow the federal government to create a food, fiber, and economic disaster in this state and thus follow the leadership model perfected by two federal agencies?
Or will they and our elected officials not allow bureaucracies to do nothing and subsequently provide a solution path that undoes this unprecedented decision?
Former President Dwight Eisenhower was also correct when he stated it is real easy to farm when you are thousands of miles away from the property which for a bureaucrat is piece of paper and their plow is a pencil.
“This has to be one of the more ridiculous statements and decision ever made by any administration.”
Late last week, the California Department of Water Resources (DWR) announced that rain and snow storms in February and March have allowed an increase of water contract allocations for State Water Project deliveries from zero to five percent.
Although this appears to have been positive news for agricultural interests in the San Joaquin Valley, it is far from it. The DWR announcement went on to state that the precipitation from these recent storms eliminates the need for rock barriers to be constructed in the Delta. This means that the increase in water deliveries will be flushed into the ocean in order to protect fish species and prevent saltwater intrusion in the Delta. San Joaquin Valley agriculture remains at zero percent allocation.
Approximately 75% of the California citrus crop is produced in Tulare, Kern, and Fresno Counties. A majority of this acreage relies on surface water from the Friant-Kern Canal. DWR’s delivery increase does nothing to reduce the pressure on the Friant from exchange contractors who would otherwise receive their water via the State Water Project.
Earlier this month, the DWR and State Water Resources Control Board (SWRCB) released a 168-page document they refer to as the “plan.” However, the plan does not refer once to the people or the economy that will be impacted by zero water allocation to agriculture. The word “farmer”, or “agriculture”, appears once. The word “fish” is stated 328 times.
“Friday’s announcement was made with much fanfare and yet the decision completely ignores the East side of the San Joaquin Valley, and even stipulates that we are not important,” says CCM President Joel Nelsen.
The photo above depicts “petal fall” and the first life stages of an orange, when the blooms have fallen. It is at this critical point of the growing season, when we enter into the hottest months of the year, that sufficient water is available for the cultivation of the crop.
California is the Nation’s number one supplier of fresh citrus. “Our Valley is the number supplier of fresh fruits and vegetables and yet that does not enter into the equation for water needs,” continues Nelsen. “What ever happened to the goal of providing a bountiful array of fresh produce at affordable prices?”
The Friant-Kern Canal needs at least 200,000 acre-feet to remain functioning. The decision not to release sufficient water to the State Water Project guarantees that exchange contractors will call upon their first rights to water supplies in Millerton Lake and reduce the amount that would otherwise flow to the Friant-Kern Canal. This decision is forcing growers to make their own decision – between pushing out trees and holding out for water that may come too late, or not at all. Over 50,000 acres of citrus in the San Joaquin Valley is at risk. But, it is not just trees that will be pushed if Friant does not receive water – jobs will be pushed, people will be pushed, and the economy will surely suffer.
“I continue to be mystified by the announcement last Friday and the inconsistencies it presents,” says Nelsen. “The announcement on Friday and previous announcements all state that the public should strive to conserve at least 20% of their normal water use. Yet the producers I represent, and for that matter all producers on the Eastside of the San Joaquin Valley, are being told to give up 100% of their water. In fact, those in the Friant Service area are the only contractors being asked to give up 100% of their water.”
This situation is real and devastating for many family citrus farmers. Here are a just a few growers who are facing zero water allocations.
These growers, and others, will be available for interviews tomorrow, April 23rd at 2:00 p.m. at the Lamp Liter Inn in Visalia. Please provide advanced notice to Alyssa Houtby, 559-737-8899 if you plan to attend.
Andrew Brown, a fourth generation citrus grower in the Orange Cove, Orosi/Cutler area works alongside his father and brothers on his family’s farm. Andrew has known since college he would follow in his father’s footsteps and return to faming because it is a rewarding business mentally, spiritually, financially. Now he has his own ranch where, one day, his two young children want to be second generation farmers.
Gus Carranza grew up picking oranges in the San Joaquin Valley alongside his parents. He worked through school as a truck driver for a farming operation. His career in the citrus industry eventually led him to work for a major citrus grower-shipper operation. He now manages their field department.
In 2000, he started farming his own acreage in Terra Bella with his brothers. What began as a 10-acre operation has now expanded to 130 acres. Carranza has received zero surface water this year. Unless something changes, he will watch his trees die, and watch his investment of $30,000 per acre die with them.
Maribel Nenna works for a packing house in Southern California as the operation’s field advisor in the Central Valley. Ten years ago, she and her brother took their passion for the citrus industry and purchased 10 acres of citrus. Today, they farm 40 acres – all have received zero water allocation. In two weeks those trees, approximately 135 trees per acre, will lose their crop if they do not receive water.
Matt Leider is a 5th generation citrus producer. He grew up working on his mother’s ranch in Southern California before going to college. His involvement in the citrus industry is now two-fold. He works on his uncle’s citrus ranch in Porterville, and manages a successful mechanical pruning business that services citrus growers throughout the Valley. He needs one acre-foot of water per acre just to keep his family’s citrus acreage alive, but he doesn’t have it.
Carlos Gutierrez came to Lindsay when he was four years old. In 1999 he started a portable restroom business servicing citrus harvest crews. He then bought 12 acres of citrus on his own in 2001. Now, he manages harvesting crews for a packing house and owns over 100 acres on his own. He has a little water, but not enough to keep all of his acreage alive.
Jesus Ramos farms 86 acres in Terra Bella and another 50 acres in Strathmore. He put down a deposit of $600 per acre-foot for water, and now hopes to find water at $1,200 an acre-foot. But, he can’t find any because none is available. He hopes to save his best acreage because he knows he can’t save everything.
The California citrus industry is dominated by family farmers. “Everybody talks about protecting the family farmer, but by denying surface water to the Friant service area the state’s water agencies are aiding in their demise,” concludes Nelsen.
The 2014 California Citrus Showcase in Visalia, hosted by the Exeter based California Citrus Mutual, brought a record crowd.
“It was the largest event we have had in our 15 years,” said Joel Nelson, President of the California Citrus Mutual, the organization that hosts the annual event. “We had about 100 exhibitors and about 650 people for lunch, and roughly 1,000 growers who meandered though the entire show throughout the course of the day,” Nelson said.
There were also six workshops that focused on the Asian Citrus Psyllid, the vector of the fatal HLB disease, water quality and even GMO research to help find HLB resistant citrus stock.
“What we wanted to do was give our growers a bit of optimism,” said Nelson. “Our citrus industry has been hit with so many challenges, not withstanding the ACP/HLB issue, the disease that is ravaging Florida; the freeze in December and now the drought conditions.”
“We wanted the industry to be aware that there are opportunities to fix these problems that are facing our industry, and I think that the growers left here much more positive than when they came in,” said Nelson.
Some of the highlights of the half-day event included:
The keynote speaker for the inaugural Citrus Showcase Breakfast was Felicia Marcus, Chair of the State Water Resources Control Board. “This is a scary and uncertain drought, and it is going to be painful,” Marcus said.
“There is no question that we would not be where we are today if we had more storage,” Marcus said. “We are concerned with climate change when we could be facing the regular loss of half of our storage…snow in the mountains.”
She also said that nitrates in the ground water are a legacy issue.
Another big topic centered on what can be done to suppress the ACP, which will help prevent HLB infected trees.
The San Joaquin Valley Citrus Industry has been discussing area-wide treatment of orchards, on top of the mandated treatments when a psyllid is found.
“As it stands right now, there would be logical areas where geographically it would make sense to have that as a treatment zone,” said Kevin Severns, a grower and the new Chairman of California Citrus Mutual.
“There will be area captains in each of the zones, such as a grower or other person well-known in the area. They would work with an area-wide coordinator, and the state-wide coordinator will be responsible for coordinating treatment,” Severns said.
The spray timing would be when new growth flushes occur on citrus trees, a time when the ACP is attracted too.
Attendees also heard from Mike Sparks, President of the Florida Citrus Mutual, who painted a grim picture of what has happened to the Florida citrus industry and described its uncertain future.
“The losses due to HLB over the last seven years have been more than $70 million, said Sparks. “Before HLB disease hit us, the Florida Citrus industry was at 815,000 acres. Today the acreage is at 525,000. And we are losing orange juice processing plant infrastructure due to the low volume, pegged at only 115 million boxes, down from 133 million boxes last season.”
“Every orchard in the state is infected and growers are doing every thing they can to reduce ACP numbers and remove HLB-infected trees,” said Sparks.
There is particular concern for orchards that have been abandoned.
“The cost of production in order to fight ACP with sprays continues to go up, while production goes down. We know this is not sustainable,” said Sparks.
“Over the years, Florida citrus growers have had to deal with freezes, citrus canker, and even powerful hurricanes that have wiped out orchards. At least those orchards could be replanted and production would resume. HLB, is a far different threat. It has put growers to their knees,” Sparks said.