Friday, January 11, 2008

New Year, New Challenges

On Monday legislators returned to Sacramento for the second year of the 2007-2008 Session. As they commence their work, there are a couple of deadlines that immediately come into play. The first is January 31, which represents the last day that any bill introduced in 2007 must pass its house of origin in order to stay alive in the legislative process. The other date is February 22, which is the deadline for introducing new legislation. Of course, given the state’s unresolved $14 billion budget deficit, any legislation that imposes additional state General Fund costs (unless paid for through special fees and taxes) has little likelihood of passing.

With regard to holdover bills that must meet the January 31 deadline, AB 541 (Huffman) is of most immediate interest to agriculture. It creates a strict liability to the manufacturer of genetically engineered crops by giving farmers and landowners the right to compensation for economic losses due to genetic contamination of their crops. The bill also protects farmers whose crops are unknowingly contaminated by patented, genetically engineered crops from being sued for their use. This controversial measure is opposed by agricultural groups. The bill didn’t have the sufficient support to pass the Assembly Agriculture Committee last year, but the author is giving it one last shot. It’s set for hearing in the committee on January 16 at which time we anticipate amendments that will remove the opposition.

Governor’s Budget

On Thursday the Governor declared a fiscal emergency and released his 2008-2009 Proposed Budget containing nearly $11 billion in expenditure cuts spread over the current fiscal year and 2008-2009. With few exceptions all agencies and programs in state and local governments are impacted by the proposed cuts. With K-12 and Higher Education absorbing almost half of the reductions, legislative negotiations could get extremely difficult. As the weeks go on, I’ll provide more detail on programs of importance to agriculture. However, with respect to the Department of Food & Agriculture, the Governor proposed the following:

Program Increase
Increases funding for Border Inspection Stations by $7.5 million ($407,000 General Fund and $7.1 million Motor Vehicle Account Fund) and 117.5 positions to operate all stations on a full time basis, inspecting all vehicles, commercial and private, entering California.

Program Reductions
The Budget includes General Fund reductions of $500,000 in 2007-08 and $8.6 million and 23 positions in 2008-09. These include:

• A decrease of $500,000 for Agricultural Services and General Agricultural activities which will impact oversight, training, and coordination of County Weights & Measurements officials and testing of commercial weighting and monitoring devices.
• The Agricultural Security and Emergency Preparedness Response Program will be limited to the evacuation of pets and livestock during emergencies.
• A decrease of $4.9 million for survey and eradication activities for the Red Imported Fire Ant and the Diaprepres programs. Activities in the Pierce's Disease Control Program will also be limited.
• A decrease of $1.3 million and 11 positions for Animal Health/Food Safety which will eliminate various programs including health monitoring and reporting, Johne's Disease research, the Animal Care program, pet food inspections, rendering inspections, and field investigations.
• A decrease of $1.5 million and 4 positions for General Agricultural Activities which will close the Microscopy Sections at the University of California Davis and the Fresno laboratories and the Avian Virology section at the Fresno laboratory. It will also limit the activities of the Agricultural Security and Emergency Preparedness Response Program to only evacuation of pets and livestock during emergencies.
• A decrease of $664,000 and 8 positions for Executive and Administrative Services impacting analytical services, financial reporting, support training functions, and services to staff in management reporting and personnel services.

Water Bond

The impact of the State’s fiscal problems manifested itself on the proposed water bond issue. The Capitol Alert reported on Monday that Assembly Republican leader Mike Villines said that he does not expect the Legislature to place a massive water bond measure on this year's ballot. Villines, commenting at a news conference before the Assembly's first meeting of 2008, said that protecting and increasing the state's water storage and drinking supplies are vitally important. However, Californians are not likely to pass a massive water bond, and the state needs to focus first on fixing its structural budget deficit.

"I'm open to the discussion," Villines said of a water bond. "There are members that feel strong about it. I feel strong about the need for water storage in California, and better water policy. But in terms of where we're at, that cannot be the priority. We have to get our house in order and we have to get fundamentally financially secure. I think that's something we've got to do first."

The Capitol Alert also reported that Senate President Pro Tem, Don Perata, responded to Villines' comments by saying that, "until we have a really good idea of what we're faced with this budget, and what the forecast is this year, we probably just want to hold on tight and wait until we know the answer to that. Anything we do right now would just be cocktail talk."

Although it’s still too early in the ballgame to totally write-off the water bond, the politics associated with the State’s fiscal problems make what is already a difficult challenge, even more so.

Coping with Climate Change Workshop

The Ag Council (along with the California League of Food Processors, the Wine Institute, the Manufacturers Council of the Central Valley and Camp Dresser McKee) is sponsoring a special workshop designed for food processors focusing on the regulation of greenhouse gas emissions. It will cover compliance with AB 32 regulations and how to operate in a low carbon business environment. The workshop is scheduled for January 15, 2008 from 8:30 AM to Noon at the Stockton Grand Hotel, 2323 Grand Canal Boulevard, Stockton, CA. A number of speakers will be covering topics including:

• Summary of AB 32 objectives and timelines
• Greenhouse gas reporting and verification requirements
• How the Air Resources Board sets emissions targets
• Strategies that could be used by food processors and wineries to cope with the new low-carbon world
• California wine community greenhouse gas accounting tool
• Programs to assist food processors to improve energy efficiency and reduce greenhouse gas emissions

Space is limited but there’s still time to RSVP by contacting me at 916-443-4887 or gordon@agcouncil.org. There is no registration charge.

Bin Location Program

A Web-based tracking system to report located produce bins is up and running. A joint project of the California Farm Bureau Federation and the California League of Food Processors, this system allows those involved in the processing of specialty crops a simple way to communicate with one another and keep track of bin inventory.

“Each year hundreds of bins from dozens of different owners can accumulate at a packing facility. Short of calling each individual owner based on the brand information found on the bin, there is no simple method for an individual to communicate with the rightful property owner so they may retrieve their property,” said Danielle Rau, CFBF director of rural crime prevention. “In many cases, bin theft has been suspected. This first step in creating an inventory tracking system will help members of the agriculture industry as well as those in law enforcement in their quest to secure property.”

This online system allows members of the agriculture community to enter a report and view a spreadsheet of located bins reported from around the region. In its beginning phase, well over 1,000 located bins have already been reported. Reports can be made and the list of located bins can be viewed at www.cfbf.com/bins. For questions related to this program please contact Rau at drau@cfbf.com or (916) 561-5598.

Annual Meeting Reminder

The Agricultural Council’s 89th Annual Meeting is scheduled at the Silverado Resort in Napa on March 3rd through 5th, 2008. Attendees can look forward to great sleeping accommodations, terrific golf and recreational activities, wonderful cuisine, and an outstanding meeting program.

The theme of this year’s meeting is California - In Need of a Fix. Our goal is to address and discuss issues relating to water, transportation, budget and other concerns that are important to the future success of California’s agricultural economy. We promise a provocative and informative general session with a stimulating panel of speakers.

In conjunction with the Agricultural Council’s meeting, CoBank is also holding its 2008 Customer Meeting beginning on afternoon of March 4th and continuing through the morning of March 5th. CoBank’s program will include reports from management along with several prominent speakers, who will cover international economics, leadership development, and future business trends.

We encourage directors, management, and allied members to attend both meetings. For more information and registration materials please visit our website at http://www.agcouncil.org. Room reservations should be made directly with the Silverado Resort. 

We look forward to seeing you!