Ag Leaders Discuss AB 1066 Consequences

Ag Leaders on AB 1066 Consequences

By Patrick Cavanaugh, Farm News Director and Brian German, Associate Broadcaster

California ag leaders hoped that Governor Brown would see how the AB 1066 overtime bill would actually hurt farmworkers and veto it. Now that the Governor has signed it, the following ag leaders weigh in on AB 1066 consequences: Norm Groot, executive director of the Monterey County Farm Bureau; Bryan Van Groningen, field manager for Van Groningen & Sons Farms; and Anthony Raimondo, a Fresno-based attorney who has been representing farmers and farm labor contractors for over 15 years, among them.

Norm Groot

Norm Groot anticipated, “The end result of AB 1066 is a big move to mechanized harvesting, which probably means a change in some of the crops that we’re growing here simply because currently we can’t harvest lettuce or strawberries or some of the other vegetable crops by mechanized means. Lawmakers are forcing the hand of the growers to move into crops that are less labor intensive and thus, save the [labor] cost,” said Groot.

Groot noted the inaccurate AB 1066 assumption—that an increase in overtime hours and pay will result from its passage. “We will probably see their hours cut back to the eight hours a day and forty hours per week,” he explained, as stipulated in the law. “Growers will adjust their planning schedules to the amount of laborers that they think they have available for harvest. It’s not an automatic given that we’re going to see all these paychecks increase, simply because we’re putting overtime at more than eight hours a day or after forty hours a week,” Groot said.

Groot added that farmworkers are not in favor of losing 33% of their income at this point. “I think overall, the unions have been supportive of this particular change, but the unions do not represent the majority of the laborers or field workers at this point,” he said.

“I think if you were to ask the average field worker whether he wants to work ten hours a day and sixty hours a week, he would probably say yes. Field workers want that income. They know they work in a seasonal business; they have to earn their income when they can,” he explained.

Bryan Van Groningen

Bryan Van Groningen
Bryan Van Groningen

“Our farmworkers, our employees, love to put in the extra hours because this is the time that they’re making wages. Our company is accustomed to paying overtime if that’s what it requires,” said Van Groningen, “and the majority of our workers are already satisfied with the existing compensation structure.”

But Van Groningen noted the problem lies in what is considered overtime. With a shorter workday, overtime compensation rates will kick in much earlier than in the past, which will end up being a tremendous cost to the employer. “That’s going to cause our farm to mechanize a little bit more to try to get through the harvest more bit quickly because [the cost] is going to become too big of a burden,” he said.

Growers want to help their employees as best they can, but Van Groningen predicts reduced hours may become a necessity. “It’s just smart business. We don’t want to cut hours, but if we’re forced to because our bottom line is starting to become an issue, that’s what we’ll have to seriously consider,” he said.

Anthony Raimondo
Anthony Raimondo

Anthony Raimondo

Anthony Raimondo foresaw the effects of AB 1066 could put California at a disadvantage in the global marketplace. “At the very least,” Raimondo said, “employers will be forced to evaluate where they can cut production costs.”

“The increased overtime in some industries is going to drive automation,” said Raimondo. “So you are going to lose jobs because now it’s worth it for people to do the research and development to have more automation, more machine-harvested crops and less labor.”

Raimondo also expects some employers to add more H-2A temporary agricultural guest workers to make sure hours stay low enough to prevent their costs from increasing. “In the end, this is really going to cost farmworkers in terms of their real wages and it creates a massive economic disadvantage for California’s agricultural industry,” he said.

Policies like AB 1066 become increasingly problematic as the global agricultural industry continues to become more competitive. “Increasingly, agriculture has become a global marketplace in which we compete against countries that do not maintain the same labor standards nor the same environmental standards that we maintain, so our agricultural industry continues to remain at an economic disadvantage with the rest of the world,” noted Raimondo.


Featured photo: Norm Groot, Monterey County Farm Bureau executive director

Salinas Valley SGMA Agency Progresses

Salinas Valley SGMA Agency Development Makes Headway

By Patrick Cavanaugh, Farm News Director

 

The Sustainable Groundwater Management Act (SGMA) empowers local agencies to adopt groundwater management plans that are customized to the resources and needs of their communities. All such designated groundwater sustainability agencies (GSAs) in the State’s high- and medium-priority groundwater basins and subbasins must be identified by June 30, 2017.

 

A GSA is responsible for developing and implementing a groundwater sustainability plan (GSP) to meet the sustainability goal of the basin to ensure that it is operated within its sustainable yield, without causing undesirable results. The GSP Emergency Regulations for evaluating GSPs, the implementation of GSPs, and coordination agreements were adopted by DWR and approved by the California Water Commission on May 18, 2016.

 

“We’re coming down to the wire pretty quickly,” commented Norm Groot, executive director of the Monterey County Farm Bureau in Salinas. “We’re moving forward with our SGMA implementation and moving closer to a proposal for our groundwater sustainability agency. We hope to have something presentable to the public entities sometime this fall.”

 

“We are meeting with stakeholders in the Valley and hopefully we can move forward with some of the solidification of the proposals and get into the nitty-gritty details of how to work that particular agency through the process,” Groot continued. “We have options to either take an agency that we have here in our county and rework it legislatively, or perhaps create a brand new agency. It just depends on the complexities of that particular issue based on the proposal that we come up with,” said Groot.

 

Groot noted local agricultural leaders have proposals on the table and various different options are under consideration. “The complexity of reworking an existing agency through a legislative process is rather daunting,” explained Groot. “The complexity of creating a new agency from the scratch is also very daunting and probably very expensive.”

 

Certainly any of these proposals under scrutiny will not be approved overnight. “It’s going to take some thought; some time, effort, and energy; and definitely some money to do,” said Groot.


Resources:

Access to water proves key factor in farmland value

Source: Kate Campbell; Ag Alert

With drought adding new constraints on the state’s water supplies and farmers and ranchers increasingly turning to groundwater to sustain food production, lawmakers now are contemplating bills requiring changes to how groundwater basins are managed. If adopted, opponents said, the bills have the potential to undermine food production, reduce agricultural land values and hamper the overall economy.

Two pieces of legislation were each amended twice last week and now have identical language, requiring assessment of impacts on local ecosystems from groundwater pumping. The measures will be heard in their respective Appropriations Committees this week. The California Farm Bureau Federation and other agricultural and water organizations oppose both measures.

Jack Rice, CFBF associate counsel, warned of unintended consequences from laws that are hastily passed and implemented.

“Figuring out how to improve groundwater management in California requires figuring out the best possible solution for a highly complex problem,” Rice said. “That doesn’t mean throwing legislation together and passing it before people even have a chance to understand the implications of how a new groundwater management framework will operate. Poorly conceived and executed changes to groundwater management would be very disruptive.”

Among the issues hanging in the balance, he said, are farm and ranch land values, which depend on property rights for access to groundwater supplies, particularly when surface water supplies are unreliable due to drought, plus regulatory and water-system constraints.

In summarizing current farm and ranch real estate trends, the California Chapter of the American Society of Farm Managers and Rural Appraisers concluded in its 2014 trends assessment that acute drought threatens many growers this year, and long-term water policy will have long-term ramifications on the farm and ranch sector.

In a presentation to agricultural land appraisers this spring, the association said “property in areas with threatened ground and surface water is at risk, but property in areas with good water will continue to be attractive.”

Rice said discussions about potential changes to groundwater management raise questions about the ability of affected property to sustain anticipated cash flow.

“Those kinds of uncertainties can have an impact on the value of underlying assets, such as land values, property improvements and equipment,” he said.

The Salinas Valley, which produces much of the nation’s fresh produce, is in a unique situation, according to Monterey County Farm Bureau Executive Director Norm Groot.

“We’ve been working for the past 60 years to manage our water resources—addressing everything from groundwater management and saltwater intrusion to surface supplies and flood control,” he said.

Because landowners have been engaged on many issues at the local level, Groot said, “we think another layer of regulation from the state will only hinder what we’re doing. It’s a hindrance we don’t need.”

Tony Toso, a Mariposa County rancher and professional farm and ranch land appraiser, said land appraisal values are based “on what has occurred in the rearview mirror,” but that how well water is managed at the local level has an impact on values.

“The market is going to start telling me as an appraiser what’s happening to land values in specific irrigation districts and groundwater basins based on reliability and quality of water supplies,” said Toso, who is a CFBF director.

“We do know groundwater is essential to ensuring a consistent agricultural land value,” he said. “Everyone knows that land without water isn’t worth much.”

Overall, appraisers said California farm and ranch land prices have held steady. However, rangeland without access to water has seen a decline in recent years.

Experts warned that not getting groundwater regulation right has the potential to strip some of California’s best farmland of its productive use and set off a decline in asset values.

“It’s hard to prove something that could happen in the future,” Toso said, “but if you don’t analyze water supply problems right, if regulations aren’t implemented right, if it’s turned into an emotional issue, then asset values could start heading for zero.”

Changes to groundwater management regulations could have a “huge” effect on local economies, said Tod Kimmelshue, a senior lender with Northern California Farm Credit, who explained that agricultural lenders always take into account water quantity and reliability for farm operations.

The question lenders need to determine, he said, is what is the highest and best use of a piece of land.

“Farmers need to be heavily involved in deciding who determines beneficial use,” said Kimmelshue, who is a past CFBF director. “It’s important for groundwater users to start monitoring how much water they’re using so they can document how much water they need for beneficial use.”

He said lenders are requiring increasingly more information on a property’s wells and access to groundwater, adding, “It’s a huge part of the collateral we consider when making individual lending decisions. But the impact of poorly designed groundwater management regulations could extend beyond affecting agricultural land values; there could be a ripple effect that moves through local economies from reduced property and business tax revenue and local jobs.”

EIR Approved to Clear Brush From Salinas River

 

By Patrick Cavanaugh, Editor

Norm Groot, Monterey County Farm Bureau Executive Director, commented recently on the completion of the Environmental Impact Report (EIR) that allows the Salinas River to be unclogged of brush and other plant material. “It’s been a over a three-year process to get the environmental impact report completed and certified, and the Board of Supervisors took action to certify it, so that is the first big step in moving forward to getting the resource agencies to issue permits.

Norm Groot
Monterey County Farm Bureau Executive Director, Norm Groot.

“It’s not perfect at this point, but we feel it’s a good start, and maybe as a short-term project moving into some sort of long-term river management project. Ultimately, this could be a first good step,” said Groot.

“We’re hoping that now that we have this certified EIR, the permits for the Nature Conservancy projects will go forward, and they will be able to hopefully start their maintenance work in October of this fall and complete that work before it starts raining—and we are hoping for rain. It also clears the way for other landowners, or as we’re calling them, River Management Units, to start working on filing for applications and moving their individual projects forward, hopefully, for next year.”

Groot said, This is all in case of flooding that could result from winter rains and cause a lot of damage to the adjacent fields.”

“It’s due to concerns about food safety  and flooded fields being out of production for a lot longer than they were during the last floods in 1995 and 1998,” said Groot. “Things have changed considerably since then, and we do have the potential for having a pretty epic flood here.

“So we’re a little concerned that if we don’t get something done in the riverbed this year and next year, some much larger problems could impact the economy as well as the industry,” said Groot.

 

Featured Photo credit: Salinas River, San Ardo Oilfield View, Wikipedia.

PROPOSED DESALINATION PLANT IN SALINAS VALLEY

Salinas Valley Worried about Desal Plans

 
California American Water could threaten the ground water supply of the Salinas Valley where up to 60 percent of the vegetables and leafy greens are grown for the nation.

The water company, which serves about 100,000 people on the Monterey Peninsula, was ordered 20 years ago to reduce using their source of water from the Carmel River by 60 percent by 2016.
 
Norm Groot, executive director of the Monterey County Farm Bureau, commented, “They’re searching frantically to find an alternative source. Unfortunately, they have had twenty years to do that and the voters haven’t really been necessarily sympathetic and voted for their particular projects when proposed.”
“So, now we are to the point of looking at a desalination plant that is supposedly going to replace all that water from the Carmel River,” Groot said. “There are a number of issues there as well—not only the cost—but the energy footprint and a number of other things that really have some of the people here quite concerned right now.”
 
“The test well for the proposed desal plant may be fairy close to the shoreline,” Groot said, “but any water taken from that well could impact the Salinas Valley. I think our biggest concern is what is that cone of depression, which is a scientific term for the influence that a source water intake has in a particular area. And because of the confluence between the lower aquifer, the Salinas Valley Basin, and the shallow aquifer from which they propose to take the water, we really don’t know how large a cone of influence is going to be felt. And since the actual aquifer goes offshore quite a distance, there is potential for some sort of impact there.”
 
“We’ve been involved in the whole CPUC process for the Public Utilities Commission trying to insert our particular viewpoints into the process” Groot explained, “so that everyone is fully aware of the ramifications of placing the source water intakes over the aquifer. And what if pumping is determined to cause harm to source water that includes Salinas Valley, either brackish or fresh water?”