WORKING THE CAPITOL: WG Board & Members Present Ag’s View in DC

June 11th, 2015

Western Growers board members from Arizona and California, along with fellow ag leaders from Colorado and New Mexico, concluded meetings held this week in Washington, D.C., with several members of Congress and the Obama Administration.

Discussions touched every topic of concern to specialty crop producers and included the upcoming reauthorization of the Child Nutrition Act; possible solutions to trade agreement negotiations, West Coast port disruptions, and passage of the trade promotion authority bill; reform of the Endangered Species Act; GMO labeling; easing border crossings in Yuma and Imperial and APHIS inspections; immigration reform and streamlining the H-2A visa program; and western water issues including the Waters of the U.S. (WOTUS) and western water legislation.

Congressional representatives speaking with WG members included House Majority Leader Kevin McCarthy; Jim Costa, David Valadao, Darrell Issa, Jeff Denham, Doug LaMalfa, Juan Vargas, Zoe Lofgren, Xavier Becerra, Tony Cardenas and Sam Farr.  Board members also met with Representative Ruben Gallego from Arizona, Rodney Davis from Illinois, Collin Peterson from Minnesota, Frank Lucas from Oklahoma and House Ag Chairman Mike Conaway from Texas.  The Japanese Minister for Economic Affairs Kanji Yamaouchi met with the group at a dinner meeting Tuesday.

A number of administration officials also met with board members on Thursday to talk about specific federal regulatory concerns.  Alejandro Mayorkas, deputy secretary of the Dept. of Homeland Security, discussed drivers’ licenses in California for undocumented workers, and improvements that could be made to the H-2A visas program while comprehensive immigration reform is pending.  Tim Male, deputy associate director for wildlife for the Council on Environmental Quality, spoke to board members as well.  WG’s Matt McInerney and Robert Sakata from Sakata Farms in Colorado participated in a meeting on trade held at the White House.

See more at: http://www.wga.com/blog/2015/05/14/western-ag-concerns-taken-federal-leaders-wg-members#sthash.9yTJBSmU.dpuf

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Innovation & Technology Propelled by Western Growers

June 30th, 2015

“Innovation distinguishes between a leader and a follower.” Steve Jobs

How will you be farming and running your business 10 years from now?  Will you be paperless and using drones and sensors to monitor soil moisture and robots to harvest more of your crops?  What will other operations be doing and how will they be doing it?  Will technology ensure profitable business and better food by providing us tools to produce more fresh produce at higher qualities using fewer inputs and producing less waste?

The future is all about innovation and the work that can be accomplished through technology.  It is the way forward and that is why I am excited to announce that we will be opening the Western Growers Center for Innovation and Technology in Salinas later this summer and launching a series of activities to lead in the discovery and development of technologies to address critical issues facing agriculture.

A key consideration for me as we began to develop plans for how WG might lead in the technology arena has been the myriad opportunities that such an effort provides to engage our members substantively and actively in shaping the future.  The Center may be the physical hub for WG, but more important is our declaration of focus on technology, and the potential to work directly with our members to identify the priorities for innovation, to facilitate critical review, trial and feedback of new/novel offerings, and to communicate early and often about the types of technologies and innovation moving forward to address agricultural issues.

Technology and innovation is such an amorphous set of terms.  It can mean anything from the next generation of your cell phone to robots that vacuum your living room.  Ambiguity, confusion and lack of focus is now seeping into the agricultural arena as numerous players, hungry for the opportunity that agriculture presents, descend upon the sector to hawk their wares.  You know this, as these folks have been knocking on your door for an opportunity to present, pitch, pilot or sell their products.  Bringing focus and order to this chaos is a large part of what I hope to accomplish, and the larger Western Growers effort presents many occasions to work directly in concert with members.

First and foremost is the opportunity to set the agenda and priorities for innovators.  To do this we must know, understand and clearly develop a problem statement for solutions providers so that they focus on innovations that are targeted to the priorities and problems facing growers, shippers and handlers and will be useful to industry.  Perhaps one of the best questions you could ask yourself is what technology would I adopt and invest in if it was available right now?  That kind of information is the missing link in the quest for innovation and one we would like you to share with us.

Second and vitally important is the opportunity to be “hands on” during developmental stages to ensure that innovations are useful and meet both industry needs and specifications.  It is clear that on-site testing of cutting-edge technological tools that are intended to address an industry priority in a real world environment is key to a successful innovation effort.  Some technologies may look good on paper, hold promise in the garage or laboratory, but will fail in a real world agricultural setting.  There is no shortage of innovators who need hard, clear feedback from potential users/customers early and often to ensure offerings actually position growers, shippers and processors to advance their own strategic objectives.  As Steve Jobs said, “Sometimes when you innovate, you make mistakes.  It is best to admit them quickly, and get on with improving your other innovations.”

Direct involvement with WG members will be necessary to identify the priorities and agenda for innovation and also necessary to ensure that the solutions held up to address those priorities are useful to and provide return for growers, shippers and processors.  These are two clear areas where WG will use its strengths to facilitate active participation on the part of all members.

Agriculture has always had challenges and has often met and conquered them through better technology.  In the past we have relied on individual innovators within the industry to bring technology and advancement forward.  Today is different from the past.  We are moving faster than ever before and know we must do more with less in order to feed a rapidly-expanding population and market.  Now more than ever is the time to work together as an industry for the benefit of all of industry.  Western Growers is stepping up to coordinate this collaboration.  Using the Western Growers Center for Innovation and Technology as the standard bearer, we will engage our members to identify and perfect technology and businesses that create more efficient work processes, better productivity and performance, and ensure the viability of agriculture and ability to feed the world far into the future.

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TRADE OPPORTUNITIES: Elimination of Tariffs Should Enhance Export Shipments

June 30th, 2015

As the Trans-Pacific Partnership (TPP) negotiations near their conclusion, producers and exporters of a host of fruits, vegetables and nuts can start eyeing some of those markets—most notably Japan—with renewed vigor.

The countries engaged in the TPP negotiations represent nearly 40 percent of global GDP and are the destination for 44 percent of U.S. exports.  There are 12 countries participating in the Trans-Pacific Partnership (TPP): the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.  While some are covered by other trade agreements, several of these nations offer great opportunities.  Maybe none more than the potential export opportunities that exist for Japan.  And maybe even more important for the long term, this TPP negotiation could offer a framework for similar agreements with other partners on both sides of the Pacific Ocean with China lurking as the largest fish in that sea.

The elimination or reduction in tariffs plays a key role in the ability for the United States to gain market access.  At present, Japan imposes tariffs ranging from 3 to 9 percent on fresh vegetables, 6 to 17 percent on fruit and 10 percent on tree nuts.  Malaysia assesses tariffs ranging from 5 to 15 percent on U.S. exports of fresh fruit.  Gaining greater market access to Vietnam is hampered by tariffs of 12 to 20 percent for fresh vegetables, 10 to 40 percent for fruit and 15 to 30 percent for tree nuts.  Without tariff cuts, the United States could face a substantial competitive disadvantage preventing greater market access and possible market loss.

The United States currently has free trade agreements with Australia, Canada, Chile, Mexico, Peru, and Singapore.  Hence, in this TPP negotiation, the U.S. focus has been on Brunei, Japan, Malaysia, New Zealand, and Vietnam.  Japan, in particular, is of significant importance to the produce industry, representing the third largest market for U.S. vegetable exports.

While TPP is an all-encompassing trade agreement, WG members stand to benefit from increased trade opportunities for fresh vegetables, fruit, and tree nuts.  The goal for our industry is to, if not completely eliminate, at least minimize trade barriers including tariffs and non-tariff barriers, such as phytosanitary (SPS) measures.  Several of the TPP countries are major markets for U.S. horticultural commodities, and it is crucial for the U.S. to not only expand current market access, but to remain competitive with other regional free trade agreements currently in play.

In addition to reductions in tariffs, important areas for which WG members could benefit include the establishment of science-based SPS measures and the creation of a mechanism for improved communication.

Dennis Johnston of Johnston Farms, Edison, CA, looks forward to a time in the future when tariffs on U.S. citrus to Japan and other TPP countries are relaxed or eliminated.  He said Japan is a study of two different times during the year.  When tariffs are low, lots of U.S. citrus is exported there.  But when they are protecting their local citrus production with high tariffs, shipments are much more scarce.  “Frankly we have looked elsewhere in recent years,” he said.  “We do a lot more to New Zealand, some to Australia, Vietnam is increasing and we’ve done quite a bit to Malaysia.  And today I was in a conversation with China discussing the protocol there for citrus.”

Johnston said the reduction and/or elimination of tariffs is important, but equally important, if not more so, are the knocking down of non-tariff barriers.  “We have to jump through a lot of hoops to get into Australia.  It seems like when you knock down one barrier, they erect another.  We have to worry about red scale or brown rot or whatever barriers they throw up.”

Fred LoBue of LoBue Bros. Inc., Lindsay, Calif., agreed that any drop in tariffs will make U.S. product more attractive and should increase sales.  He said the company already does a good amount of business with Japan, “any additional relief will help.”

He noted that sales do drop off significantly when the tariff is increased and that often there is a run on orders right before the high tariff period.  That certainly indicates that there is year-round demand for California fruit.

Joe LoBue of the same firm said LoBue Bros. exports 35-50 percent of its citrus volume each year, emphasizing just how import export sales are to the firm.  He said all of the countries that are the focus of these TPP talks are important trading partners to one degree or another.  He said a reduction in tariff is very important as it lowers to ultimate cost to the foreign consumer.  But LoBue repeated the comments of others in stating that the reduction of non-tariff trade barriers is equally important.

Dottie Massey, who is in sales with the International Produce Group LLC, Salinas, Calif., said opportunities will come out of the woodwork when tariffs are relaxed.  “Producers know better than I what items can’t be exported because of high tariffs.  We work a lot of different commodities, but we are working the ones that can get in.”

She noted that the relaxation of tariffs for South Korea resulted in a lot of new business.  “The phone was ringing off the hook for items that they were looking for.  I suspect the same thing will happen.”

IPG’s top fresh produce shipments to TPP countries are grapes, citrus and many different fresh vegetables.  Massey looks forward to expanding that list.

But she said of equal importance are other very important trading factors, such as the strength of the dollar against foreign currencies.  “A year ago, the yen was around 80 (to the dollar), then 115 and now it’s 125.  That makes it very expensive for them.”

As the dollar strengthens and the yen weakens, U.S. products go up in price and can become unaffordable.  On the other hand, Japanese car makers are finding a robust market for their cars in the United States.  Joe LoBue agreed that the decrease in value of the yen against the dollar has had somewhat of a chilling effect on sales.  It has declined more than 40 percent in the past year.  He said compare that to Korea where that currency has only experienced about a 10 percent decline in value against the dollar.

The TPP process began in 2005, initially known as the Trans-Pacific Strategic Economic Partnership Agreement consisting of Brunei, Chile, New Zealand, and Singapore.  The United States joined negotiations in 2008.  The plan was to complete the agreement by 2012, however, with new countries joining the proposed agreement, and with participating countries far apart on many issues, negotiations have continued.  One major hurdle for the United States in successfully completing an agreement is the need to pass fast track or Trade Promotion Authority, which expired in 2007.

As indicated in the accompanying chart, for calendar year 2014, the U.S. export value to the various TPP countries was in excess of $7 billion.

While the produce sector experiences an overall trade deficit, $15 billion in U.S. exports of fresh produce commodities compared to nearly $19 billion in imports, the expansion of foreign markets through agreements such as the TPP is critical to opening and expanding markets for the fresh produce industry.

 

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TRADE NEGOTIATIONS: Ambassador Vetter Handles Key Assignment with Aplomb

June 30th, 2015

Darci Vetter serves as Chief Agricultural Negotiator with the rank of Ambassador at the Office of the U.S. Trade Representative.  She is responsible for bilateral and multilateral negotiations and policy coordination regarding agricultural trade.  Recently she answered several questions from Western Grower & Shipper concerning her career and the current negotiations.

 

Q: Where were you born and raised?

A: I grew up on a small family farm in Nebraska.  My father farmed and ran a family grain processing business with my uncle and my grandfather.  It was mostly a grain operation, but we did have a garden where we grew our own fruits and vegetables.  Today, my uncle runs the farm, and my father and brother run the processing operation.

 

Q: We know that your role as Chief Agriculture Negotiator at USTR is critical in terms of agriculture trade policy, what have you done prior to this role?

A: I was always interested in international and natural resources issues.  In fact, I went to grad school at Princeton and majored in international affairs and environmental policy.  In between my undergraduate and graduate degrees, I did Rural Development work at USDA, and after grad school I went to work for the State Department and then held positions at USTR (including as Director of Agricultural Affairs) before working as an international trade advisor for the U.S. Senate.  Most recently, I was the Deputy Under Secretary for Farm and Foreign Agricultural Services at USDA.  So in a way, this current position (as Ag Ambassador) is coming back full circle.

 

Q: Why is trade important to the agricultural industry?

A: International trade represents about 20–30 percent of U.S. farm income so it is very important to the farm economy.  I also believe there is a huge opportunity to increase our trade in agricultural products.  The United States offers superior and consistent quality in many different agriculture commodities so I believe we are very well-positioned for further growth in this area.

We are witnessing a rapid rise in the middle class in developing countries, and as consumers reach the middle class, they change the way they eat.  An increased demand for proteins tends to be the first item that those new to the middle class want.  That includes, meat, dairy and nuts.  But we also see an increase in consumption of fresh fruits and vegetables, as people pay more attention to nutrition and desire more fresh product as their income rises.

 

Q: Specifically tell us how trade negotiations occur when a foreign trade agreement is being discussed?

A: Every negotiation is different, but we really have two types of negotiations, market access (tariff) negotiations, and negotiations about trade rules.  In the market access negotiations, there are typically 1800–2000 separate agricultural items/products that have to be addressed.  We truly go line by line as we try to reduce or eliminate tariffs for every agricultural product.

 

Q: How do you deal with non-tariff trade barriers?

A: This is where the rules negotiations come in.  It is a fact that as tariffs have gone down, we have seen non-tariff trade barriers go up.  We are working to make sure that when countries put phytosanitary (SPS) measures in place, they are based on science, and that the measures address a specific plant pest risk.  We are also working to ensure that our trading partners apply SPS measures in a transparent manner, so producers are informed of current standards, and know what testing and other procedures their product will face at the border.

 

Q: Specifically where are you in terms of the current negotiations underway?

A: The TPP (Trans-Pacific Partnership) negotiations are nearing their conclusion.  There are very few issues left to be resolved.  We expect to complete the process in the coming weeks, and will get back to the negotiating table as soon as Congress finds a path forward to adopt Trade Promotion Authority.

With regard to the European TTIP (Transatlantic Trade & Investment Partnership), we are much earlier in the process.  The goal is to reduce and eliminate tariffs, and address longstanding SPS barriers.  We are still in the earlier stages of this negotiation.

 

Q: What can the agricultural community do to help you do your job?

A: Call us!  Seriously pick up the phone and call us if you notice that it is more difficult to complete a trade because a new barrier has been erected or a chemical that wasn’t a problem before is now a problem.  We work very closely at USTR with the FAS (Foreign Agricultural Service) at USDA.  We are very happy to hear from growers and grower groups.  If a reliable market has become problematic, we want to know about it.

This is my plea for data.  We can’t fix a problem if we don’t know about it.  Growers can be our eyes and ears.  If you start to see a trade barrier, let us know at USTR, tell the FAS ag attaché in the country where you face a problem, or notify your trade association.  Go through Western Growers.  We work very closely with your representatives.

You can also go to the USTR or FAS websites.  There you will find contact information for our team in Washington, and for ag attaches all over the world.

 

Q: Are there more trade barriers today than there were years ago?  Is free trade trending in the right direction?

A: Barriers are not new and they tend to run the gamut.  While there seem to be more barriers today, the volume and variety of agricultural goods moving around the globe has also increased exponentially in recent years, so some of that is to be expected.  There are a number of legitimate pest or food safety measures, but there are also measures that appear to address legitimate health issues, but are really disguised to keep trade out.  These barriers make it harder than necessary to participate in trade, and we try to remove them wherever possible.

 

Q: In general how do you see trade opportunities for growers in the United States?

A: There is an increased demand for the U.S. brand, and a great opportunity for the increased trade of our products.

 

Q: In the past we have heard criticism of U.S. companies that do not tailor their products to the export market, but rather just sell the same items they sell to the U.S. customers.  Is that still a problem?

A: I see that changing, and it comes with experience.  For example, foreign consumers may have smaller kitchens and smaller refrigerators and may prefer to shop for food every day.  They want different container sizes than we might want in the United States.  I see a lot more companies specifically creating products for foreign consumption.  Many companies are doing a good job of meeting the specific demands of foreign customers, including by working through the USDA Market Access Program to promote their products.

 

Q: What tools do you use in your ag negotiations for protecting the U.S. producers?  Are there pressures to restrict trade into the United States?

A: Agricultural negotiations tend to be more sensitive than others.  It is a prime area for imports and there are some commodity groups against trade and trying to protect their industry.  We do use many different tactics to help industries adjust, such as quotas and the phasing out of tariffs.

 

Q: China is a growing economic power.  Do you expect it to be a net importer as time moves on?

A: China is already a very big customer for many U.S. products such as corn and soybeans.  It will be interesting to see what will happen with regard to fruits and vegetables.  Right now we are all seeing what is happening in the western United States with regard to the drought and how that will impact future production and exports.  China faces similar questions; it is a water-poor country and it will have to prioritize what it will produce and what it will import.  U.S. products do have a certain cache among upper class Chinese citizens.  It is considered a status symbol to serve food, particularly dried fruits and nuts, that comes from the United States.  I believe demand for U.S. products in China will continue to increase.

 

Q: Finally, our members produce some of the best fruits and vegetables in the world, are you a user of our fresh produce and nuts?

A: I am.  I might not get my 5 a Day every day, but I try.  Right now I have a fresh nectarine on my desk.  This is my favorite time of year when there are so many great fruits and vegetables in season.

Growing up we had one-third of an acre devoted to fruits and vegetables and we used to grow lots of our food.  Now, in my yard I have a little garden where I grow a few things.

I love to cook.  Right now I like everything with balsamic vinegar.  I like to roast Brussels sprouts and drizzle balsamic vinegar and olive oil over them.  I also love fresh strawberries with balsamic vinegar.  They’re delicious.

(Editor’s Note: The questions and answers have been edited and paraphrased for clarity and brevity.)

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Why does Trade Promotion Authority Matter?

June 30th, 2015

Over the past month, there has been a very public and heated debate over the future of trade policy in the United States.

On the one hand, you have those who see an increasingly globalized economy and want to see the United States engaged in negotiating the future of international trade rules and the elimination of tariff and non-tariff barriers that currently block or hinder exports of American products into many markets.  The produce sector is especially sensitive to non-tariff barriers, such as sanitary and phytosanitary measures a country may employ at various points, without any warning and without scientific basis.

On the other hand, you have those who respond to this increasingly globalized economy and use opposition to trade as a proxy for supporting labor unions, environmentalist objections, and increased isolation from the global economy.

 

Brief History of Trade Promotion Authority

The United States has played an integral role in shaping and forming the global trading system and its various rules ever since World War II. One of the key tools that has allowed for this leadership is the concept of Trade Promotion Authority (TPA) or “fast track authority” as it is often called.

The exchange and balance of constitutional authorities between the legislative and executive branches over negotiation and implementation of trade-related measures goes back 150 plus years.  Congress began granting some special authority for trade negotiations to the executive branch in the 1930s during the administration of Franklin Roosevelt.

Fast Track authority, as it is understood today, was first granted to the president by Congress in the Trade Act of 1974 and was subsequently renewed a number of times without any major lapses through the 1990s.  TPA expired in 1994 after the North American Free Trade Agreement was implemented and was not renewed again until 2002.

TPA expired again in 2007 and has not been renewed for nearly eight years, which is approaching the longest period this authority has been lapsed since its original inception. Further, to-date, President Obama is the first president since Richard Nixon to have not yet had this authority available to his administration.

 

Why Is It Important?

The express intent of this authority was clearly stated in report language accompanying the 1974 Trade Act, “Our negotiators cannot be expected to accomplish the negotiating goals…if there are no reasonable assurances that the negotiated agreements would be voted up-or-down on their merits.  Our trading partners have expressed an unwillingness to negotiate without some assurances that the Congress will consider the agreements within a definite time-frame.”

The rationale for why Trade Promotion Authority remains so critical is the same today.  The executive branch has constitutional authority to conduct foreign policy, including negotiating trade agreements, but the Congress maintains the authority to change the associated laws (primarily tariff rates) needed to implement these agreements.  Anyone who has purchased a home or car knows that conducting a negotiation with every supplier or subcontractor would be an almost impossible and highly inefficient way to get to a final price.

Likewise, there would be no way to achieve comprehensive and robust market opening agreements if the 535 members of the House and Senate could effectively re-negotiate every provision of potential agreements, because each of these individuals would only support what is in the best interest of their particular district, state or constituent interest.

While TPA requires that Congress can only take an up-or-down vote on legislation to implement a trade agreement (no amendments can be accepted), it also puts in place a number of negotiating objectives and significant consultation requirements that the executive branch must follow before an agreement can be sent to the Congress.

 

What We Can Expect Going Forward

In May, the Senate passed legislation on a bi-partisan vote of 62-37 that would renew TPA along with provisions to renew Trade Adjustment Assistance (TAA).  The House considered this legislation on June 12th and was able to pass one of the two components of what the Senate passed [see June 11th and 16th Spotlights that provide further detail on what occurred].

If Congress is able to complete consideration of TPA and renew this authority of the administration, there is optimism that we will see the conclusion of the Trans Pacific Partnership (TPP).  However, opponents of TPP are attempting to delay TPA to such a degree that conclusion of TPP before this administration finishes will not be possible  If TPA is not renewed before September, it will become very difficult for that agreement to be finalized and all consultation and legal requirements to be met prior to the beginning of the presidential primaries.

The fresh produce industry stands to benefit significantly from trade agreements that bring down barriers to exports in key foreign markets, and more robust mechanisms to enforce unfounded sanitary and phytosanitary measures that are erected in other countries.  We can only achieve these kind of results if TPA is renewed.

 

NOTE: When this column went to print, the House had not yet finished consideration of Trade Promotion Authority legislation.

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A Primer on WG’s Innovation Efforts

June 30th, 2015

Over the next month or so, as the Western Growers Center for Innovation and Technology takes shape on the ground floor of the new Taylor Farms building in Salinas, so will the association’s effort with regard to innovation.

Previously, our President and CEO Tom Nassif elegantly articulated the need and the opportunity for the association as an entity to exhibit leadership in the area of agricultural technology by seeking out and fostering the development of new technologies to address the challenges production agriculture faces.  Our membership has embraced the concept, but there continues to be some questions surrounding how Western Growers will be involved.  What will our involvement look like?

The WG Innovation Center adds both physical and philosophical structure to what we are going to be doing.  As the concept for increased involvement in innovation technology was being developed, the WG board and staff itemized what might be necessary to launch a successful initiative to accelerate innovation.  It was determined that there were several key functions that would be necessary, including:

1.  Identifying and prioritizing the needs of the industry that were ripe for technology solutions

2.  identifying, developing or spurring the development of technologies that could address those needs

3.  proving the technologies worked by facilitating, fostering and when necessary, refining their deployment in a commercial setting; and

4.  providing the capital necessary to bring technologies to market

Western Growers evaluated our resources and expertise, and found that we had strengths in several of these areas, but that strategic alliances with other experts and ongoing initiatives would take this initiative farther faster.  Earlier this year, we aligned with the Silicon Valley Global Partners (SVG Partners), an established group of experts that have a long history of identifying and bringing technology to market.  Based in San Jose, they are embedded in the heart of Silicon Valley and are highly visible to technology startups, and well known amongst the investment community.  SVG Partners’ strengths in the technology sector coupled with Western Growers’ strengths in the agricultural sector provide the nucleus for a robust and successful innovation initiative that connects these communities.  We will engage with them for the next three years and expect our collaborative effort to yield a strong community of innovators housed in the Western Growers Center for Innovation and Technology in downtown Salinas.

Our collaboration with SVG also includes involvement in two programs currently ongoing: Thrive Accelerator and the “Forbes Reinventing America: The AgTech Summit.”  Thrive Accelerator is a highly selective mentorship and investment program for technology-enabled startups in the precision agriculture space.  Ten of the best startup companies are selected annually for an eight week program that helps give them skills and develop networks to succeed.  The results of the 2014/15 Thrive Accelerator class will be on display at the 2015 Forbes “AgTech Summit” which will be held July 8 and 9 in Salinas.

This annual event will help to showcase technology and agriculture and how it is evolving to help feed more people, using fewer resources and reducing any negative impacts on people and the planet.  In each of these programs, Western Growers is providing financial support as well as engaging with expertise and leadership to help shape the content and ensure utility to the agricultural industry.

Western Growers has also committed funding from our for-profit companies to invest directly in technologies that hold promise for the future of agriculture.  This commitment is part of a larger pool of funds (including investments from individual WG member companies) that is being developed to provide venture capital for promising startup companies.  This technology fund will provide seed money to startups in exchange for equity in the company.  Western Growers’ primary goal in investing is to accelerate the availability of technology to members, but the fund may yield returns that can help sustain our technology investment efforts.

Moving forward, the WG Center for Innovation and Technology in Salinas will serve as the hub for our innovation efforts and quite possibly a template for similar activities in other areas.  The space will include staffing by WG employees, but, more importantly, it will offer a place for innovation to matriculate.  Companies participating in the Thrive Accelerator or otherwise identified as worthy occupants can, on some type of temporary basis, operate out of this facility.  It is being designed like other technology centers as an open space in an effort to stimulate the exchange of ideas and connections within the Center.

WG members, executives and others in the industry will have access to this space as they analyze and mentor technology companies.  A very significant part of high tech innovation revolves around real-world industry connection so that ideas on paper can be vetted and tested so that the solution matches the problem and works in a real industry setting.

The Center will offer a great opportunity to bring innovator and end user together.

We cannot seek the best technology without a clear line of sight to member priorities and issues.  We understand that issues like reliable, affordable water, labor, and crop protection tools are top priorities, but members need to tell us specifically “What technology would you invest in if it was available tomorrow?”  Western Growers encourages industry thoughts on these topics and will be contacting industry members for input.

In fact, we need member companies to volunteer to test drive technology and provide candid feedback to startups.  Lots of technologies may hold promise in the garage or laboratory but fail in a real world setting.  They may be inappropriately priced, may not be fast enough to keep pace with your business, may not be rugged enough to work in your environment or have a number of problems or concerns that can only be surfaced—and resolved—in concert with industry. If you are willing to test technologies—particularly those that are priorities for your company, please volunteer.

As the next Thrive Accelerator begins, it is our expectation that Western Growers Center for Innovation and Technology will be utilized as a hub that will provide more visibility to the industry and offer tangible evidence of the work being done and the progress being made.

Finally, it should be reiterated that Western Growers embarked on this plan because our end goals are a bit different than others seeking an expansion of technology in the agricultural space.  Most want to see a more efficient use of our resources.  Of course, that in itself is a worthwhile goal and may foster the development of investment-worthy technology that we will applaud.  But we also plan to steer technology development in a more targeted fashion so that today’s problems are addressed and near-term solutions found.  We are working toward the survival of today’s agriculturalists.  We want the farmers working the land today to survive and thrive.

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California Assemblyman Jim Cooper (D-Elk Grove) represents the 9th District, which includes parts of Sacramento, Elk Grove, Galt and Lodi.

June 30th, 2015

Assemblyman Jim Cooper was elected to the California Assembly in 2014.  He serves on the agriculture committee, among others, and was formerly the mayor of Elk Grove while serving as a captain in the Sacramento County Sheriff’s Department.

 

What experiences in life brought you into the political arena?

I worked in law enforcement for 30 years and several of those were as a departmental captain.  During the course of my career I also served the department as the sheriff’s spokesperson.  Obviously, working for an elected sheriff, I kind-of cut my teeth in politics, so I dealt with many locally-elected officials like school board members, members of the board of supervisors and city council members.  Some of those were pretty critical and serious situations. I saw some things that were going on, and quite frankly, thought I could do a better job.  It was when Elk Grove became a city in 2000 that I first ran for office.  I was the top vote getter among about 36 candidates and became Elk Grove’s first mayor. I spent 14 years on the city council.  I was doing two jobs:  one at the sheriff’s department and one on the city council. Five of those years I was undercover buying drugs at night.  So I developed an expertise and spoke about drug and gang prevention and awareness.  I did a lot of teaching about it around the state to educators, law enforcement professionals, students and parents.

 

When you ran for the first time, did you have a “signature” issue?

My main issue was public safety and education.  I have branched out since then.  When I first started my professional career 30 years ago, I worked very hard to clean up poor neighborhoods struggling with crime and drugs and underperforming schools.  Where I lived in Elk Grove, the kids had a lot of sports and other outlets which was not the case in these other areas.  In my city of Elk Grove, we had 15,000 kids playing youth sports.  We had the largest youth soccer registration in the country—5,000 kids playing youth soccer!  And, we had and the biggest Cal Ripken baseball league west of the Mississippi River.  It was the youth sports mecca in the Sacramento region.  But just a couple of miles away in poor neighborhoods, it was very different.  I thought if they had the same opportunity, things might be different.  Their lives might be better.

 

You serve on the Assembly Agriculture Committee; what is your opinion about the California ag industry?

Not every member knows about ag.  My fellow assemblyman from Napa, Bill Dodd, always boasts about the wine there.  But I remind him every day that most of those Napa wines are made with Lodi grapes!  Lodi produces more wine grapes than Napa.  I’ve been on dozens of farm tours throughout my political career: dairy farms, fish farms, turkey farms, and I’ve seen the harvesting and packaging of cherries.  It’s very impressive to see what goes on and it has helped me become more knowledgeable about agriculture.  When I first joined the Assembly, I was asked for a list of committees I’d like to be on.  I specifically asked for ag.  The farm tours helped me during some of the hearings because I can talk knowledgably about some of the ag issues.  Sometimes I rebut those folks that are against the industry.  Everything we eat and wear is the result of ag.

The number one issue right now with the ag committee is water.  It is so important to make sure we get farmers enough water.  I think it’s an educational process with those who don’t understand that.  Growers should not be told what to grow because of how much water a crop needs.  It’s their choice and the market dictates that.  I think we need to do as much as we can to make it easier for farmers.  In the past, others have made it very tough on business and don’t understand it’s a struggle.  A lot of folks in the ag industry have been here for generations and passed farms on from one generation to another.  They’ve done a great job and we need to let them grow because that creates more jobs and economic development—the entire state benefits from it.

 

You spent many years in criminal justice.  How did that experience influence your decision to run for office?

Those 30 years of law enforcement work helped me become a very understanding person.  I remember one Christmas morning at a hospital here in Sacramento looking at a dead 18-month-old on a gurney who had been beaten to death.  I was away from my family on Christmas morning dealing with a tragedy.  It was the job I needed to do and Christmas morning was when I needed to do it.  I was out on calls on many holidays, birthdays and anniversaries.  We always drove two cars when we went out in case I got called out and had to leave. My family is also very understanding.  I have four daughters—between the ages of 14 and 24.  I know how lucky I am.

 

What is in your political future?

Right now I just want to do the best job I can for the people of California.  In law enforcement I’ve always had to deal with two sides of the story.  I’ve had to come into a situation and figure it out.  Some folks don’t have real common sense.  I’ve met some very educated people, but we must also ask, “What is good for the average person?”  Sometimes people forget that.

 

Our members produce the finest fruits, vegetables and nuts in the world, and you have ag in your district.  Are you a consumer of our products?

Yes, I am.  Right now it’s cherry season and I love cherries.  I love fruits, vegetables, and almonds and I should eat more—I’m a little round around the waist right now, (more than I should be).  So I hope to be going on a diet soon, and that diet would include lots of fruits and vegetables produced here and grown locally.

 

 

Assemblymember Jim Cooper’s message to the members of Western Growers:

My job is to be your champion and to and educate the public about ag (and other issues of course), and really make people aware of what goes on.  Most people don’t think about where food or fiber comes from or what it takes to grow that food.   We are ground zero here in California for food production.  We feed California and we feed the nation.

 

(Editor’s Notes:  The questions and answers have been paraphrased for brevity and clarity.)

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Posted in WG&S Magazine, July 2015 Issue | No Comments »

Dealing with Affiliated Companies Under ACA

June 30th, 2015

Dear Jon

 

We have a large farm that operates in Salinas, California, and Yuma, Arizona.  We have employees working for us during part of the year in Salinas from May through October and in Yuma from November through April.  The Salinas and Yuma operations are different companies, but they are owned by the same small group of individuals.  How does this affect our health benefit plan requirements and our IRS reporting requirements?  We currently offer a health benefit plan to all full-time employees.

 

Going Loco about Separate Locations in Yuma and Salinas

 

Dear Going Loco,

 

Controlled Group or Affiliated Service Group

Your first step will be to identify whether the two different companies are considered a controlled group or affiliated service group under the Internal Revenue Code (“IRC” or “Code”).  I recommend you obtain assistance from a tax attorney or a certified public accountant regarding this issue to get a definitive answer; the following is a brief summary (non-exhaustive) of the controlled and affiliated service group rules.

There are three types of control group relationships under Code § 414:

1.  Parent-Subsidiary: Parent corporation owns 80 percent of each subsidiary or subsidiaries.

2.  Brother-Sister:  A group of two or more corporations with five or fewer common owners that own directly or indirectly a “controlling interest” of the group and have “effective control.”

a.  Controlling interest generally means 80 percent or more of the stock of each corporation;

b.  Effective control generally means more than 50 percent of the stock of each corporation;

3.  Combination of the above.

Please note, even where a controlled group does not exist an “affiliated service group” may exist under Code Section 414(m).  Affiliated service group rules are quite complex and in general apply to two or more entities connected by the provision of management or other services.  The affiliated service group rules may cause entities that are not members of the same controlled group to be combined for health plan purposes.  For more on controlled group and affiliated service group rules and examples, see http://bit.ly/irscontrolledgrouprules.

 

Large Employer Mandate & Penalties

If your entities are part of a controlled group they must aggregate the number of full-time employees and full-time equivalents working for the entire group to determine the employer size of the controlled group.  If the controlled group has 50 or more full-time employees and equivalents in the prior calendar year, it is a large employer.

Large employers with 100 or more full-time employees and equivalents were required to comply with the large employer mandate in 2015.  Large employers with 50-99 full-time employees and equivalents caught a break—they must comply with the large employer mandate starting in 2016.

Each member of the controlled group has an obligation to offer qualifying health benefits coverage or it may be subject to tax penalty.  Remember tax penalties are not automatic; rather they are triggered when a full-time employee obtains subsidized health insurance coverage at a health insurance exchange.

If a controlled group is a large employer and subject to penalty for failing to offer coverage (or offering coverage that is either unaffordable or does not meet minimum value) each member has its own obligation to offer (as explained above) and each is also subject to penalty individually (one member won’t be subject to penalty for another’s failure).

 

Nondiscrimination Across the Group

The nondiscrimination regulations and rules relating to fully-insured plans have not been finalized and are not yet in effect.  Self-insured plans—on the other hand—must comply with IRC Section 105(h) relating to nondiscrimination.  These nondiscrimination rules apply across controlled groups.  If a controlled groups operates a self-insured plan, it must comply with the nondiscrimination requirements of § 105(h) across its entities.  Generally, self-insured plans must be nondiscriminatory (not favor highly compensated employees) with respect to the benefits offered, eligibility requirements and waiting periods (note, some employees are excludable from a 105(h) nondiscrimination analysis).

 

Identifying Full-time Employees

As explained above, under the large employer mandate paragraph, hours of service performed by full-time employees and equivalents are combined.  That is, the hours of service for one member of a controlled group is treated as an hour of service for another member of the controlled group for whom the individual is also an employee.

Additional complexity comes into play this year (2015) because large employers (those with 50 or more full-time employees and equivalents) will be required to track employee hours of service and report information to the IRS and furnish similar reports to full-time employees about whether or not an offer of coverage was made to full-time employees and any covered dependents.

 

IRS Reporting

Large employers (and self-insured employers of all sizes) will be required to file reports with IRS annually beginning in early 2016.  The information collected is from data year 2015.  Each employer that is a member of a controlled group that has 50 or more full-time employees and equivalents (or is self-insured) will have an independent obligation to file.  Each member of a large controlled group is liable for its own reporting requirements, but is not liable for the information reporting requirements of any other entity in the controlled group.

If you are interested in learning more about the Affordable Care Act, I recommend downloading the Ag Employer’s Guide to Health Care Reform available to all WGA members through our store.  You can find it here:  www.bitly.com/aghcrguide.  For more information about this article or if you have other questions about health care reform contact our Health Care Reform team today at [email protected] or 800-333-4WGA.  Write to Dear Jon at [email protected].  For more information and resources on Health Care Reform, visit www.wgat.com/health-care-reform.

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Posted in WG&S Magazine, July 2015 Issue | No Comments »

Industry Challenges Piece-Rate Compensation Decisions

June 30th, 2015

In the summer of 2013, after the California Supreme Court declined to review the Appellate Court decisions in Gonzalez v. Downtown L.A. Motors and Bluford v. Safeway Stores—the two key cases that declared that piece rate employees must be separately paid for non-productive time and break periods—the flood gates have opened.  Over the past two years, dozens of California agricultural employers have been sued in employee class action lawsuits seeking ruinous penalties for paying piece rate employees in a manner that everyone understood at the time was perfectly legal.

Those who have adjusted their compensation plans in an effort to ensure compliance going forward have gotten twisted up by conflicting legal and regulatory interpretations that have only resulted in confusion and uncertainty.

Efforts to fix the problem politically and legislatively have stalled. Now, Western Growers, its industry partners, and some embattled members are going on the offensive.  Below are two examples of cases pending before the courts that could offer some relief to agricultural employers.

 

VCAA v. Julie Su

Following the decision in the Bluford case, many agricultural employers began paying their employees, in addition to their piece rate earnings, wages of no less than the legal minimum wage or contractual hourly rate for their Industrial Welfare Commission wage order rest periods consistent with the holding in that case.  However, shortly after the state Supreme Court declined to review the Bluford decision, the Labor Commissioner issued a memo to DLSE staff containing the subject line “The Minimum Wage and Rest Period Obligations of Employers in the Context of Piece Rate Employment.”  The memo discusses the holding in Bluford, and reiterates the requirement of Section 12 of IWC wage order 14-2001.

That section requires every employer to “authorize and permit all employees to take rest periods….  The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10); minutes net rest time per four (4) hours or major fraction thereof…. Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages.”(Italics added).  The memo goes on to proclaim, “the hourly rate payable to piece rate employees during rest periods is the hourly piece rate wage calculated by dividing the total weekly piece rate earnings by the total hours of piece rate work performed in the week.”  In other words, the memo purports to require that a piece rate employee be paid for wage order mandated rest periods at the employee’s average hourly piece-earning rate for the workweek in which the rest periods occurred.  The memo concludes with the Labor Commissioner’s edict to DLSE staff: “Employee compensation programs involving piece rate workers should be examined to [ensure] that these obligations are being complied with.”

We believe the Labor Commissioner’s interpretation is an unlawful regulation since it does not meet the rulemaking requirements of the Administrative Procedure Act.  In addition, the Labor Commissioner’s interpretation runs counter to Bluford’s holding that rest periods must be paid at the minimum wage or contracted hourly rate.  This unlawful regulation has caused great confusion within the industry, with most associations and practitioners advising their members and clients to follow the holding in Bluford, and others counseling their clients to take the more conservative route and pay break periods at the average piece rate per the Labor Commissioner’s interpretation.  Labor contractors are also charging their clients for rest periods in a variety of inconsistent ways as a result of the confusion set upon the industry by the Labor Commissioner.

On April 6, 2015, Western Growers, Ventura County Agricultural Association, Grower-Shipper Vegetable Association of Central California, and Nisei Farmers League filed a Petition for Writ of Mandate in Sacramento Superior Court against Julie Ann Su as Labor Commissioner and Chief of the Division of Labor Standards Enforcement (DLSE) and DLSE.  The petition seeks a court order declaring the Labor Commissioner’s interpretation as unlawful and an injunction preventing DLSE from enforcing to that standard.  We are hopeful that the court will rule in our favor and prevent the Labor Commissioner from enforcing her interpretation of the law and prevent her from compelling employers to pay average piece rate going forward as a condition of settling piece rate compensation based wage claims.

 

JAL Berry Farms v. Superior Court (Valdez)

JAL Berry Farms, LLC, is a grower of strawberries and raspberries in and around Monterey County.  The company was sued for allegedly failing to pay harvest workers separately for rest periods. (Carlos Valadez v. JAL Berry Farms, LLC, Monterey County Superior Court Case Number M127425 filed April 10, 2014).  JAL uses an incentive-based mixed hourly/piece rate compensation system such that each harvester is paid an hourly rate and an additional amount per piece (box) harvested.  To ensure payment of no less than the minimum wage of $9.00, JAL took the total compensation earned for each day and divided it by the number of hours worked.  Any harvester earning less than $9.00 per hour would have their compensation increased to meet that minimum wage.  JAL guaranteed its employees were paid for all hours worked at more than California’s minimum wage and the company does not average wages for any purpose.

JAL filed a Motion for Summary Adjudication asking the trial judge to rule that its compensation system satisfies California’s minimum wage law by arguing that Bluford does not apply to the agricultural industry.  JAL argued that agriculture is covered by a separate wage order and the history that led to adoption of the rest period provisions and this dictates a different result.  Based on the peculiar facts in Bluford (which involved Safeway truck drivers paid primarily on miles driven), the attorneys for JAL argued that Bluford should be distinguished and not applied to agricultural employers.

The trial court judge found that JAL made “very good and logical arguments,” but felt constrained by the Court of Appeal’s decision in Bluford and denied the motion for summary adjudication on that basis.

JAL has now filed a petition for writ of mandate asking the Sixth District Court of Appeal (which covers the Central Coast) to rule on the issue of whether the holding in Bluford applies to Wage Order 14 rest periods.  Western Growers, several industry partners, and a number of farming companies have written letters urging the Court of Appeal to issue the writ in this case.  A positive outcome in this case could have valuable and widespread implications benefiting agriculture as a whole.

 

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Posted in WG&S Magazine, July 2015 Issue | No Comments »

Credit Cards: Free Insurance You Need to Know About

June 30th, 2015

Recently, a client experienced a very costly claim that reminded us that sometimes we have insurance coverage that we don’t even think about.

The typical consumer spends upwards of 10 percent of their income on insurance.  Considering the cost of health, auto, homeowners, life and business insurance, that’s not surprising.  Insurance is there to cover major losses and not really for everyday types of incidents.  But when you do experience a loss covered by an insurance policy, you should use the coverage to pay for your loss.  What we don’t realize is that sometimes we have coverage that we aren’t aware of.

This client I mentioned has a large number of covered trucks as they transport employees and equipment throughout their region.  In order to fuel their trucks, they provide the drivers with credit cards.

When one of the trucks was recently stolen, the credit card was located in the glove box.  Within a few hours, thieves had duplicated and distributed the cards to a number of people throughout the state.  Within a couple of days, the thieves and their accomplices had run up a gas bill of more than $10,000.  The fuel company expected payment on the bill, even though the credit card had been stolen and the fuel bill was a result of theft.

The client submitted the claim to their insurance carrier for payment.  Unfortunately, credit cards are typically not covered under business policies.  There is relief in knowing that federal law limits exposure on credit cards to $50, and the business may only be liable for that amount.  In essence, credit card providers are responsible for losses from their credit cards and secure coverage for that exposure.

This is not the only “insurance” available from credit cards.  In fact, most credit cards provide several types of insurance coverage at no charge to their owners.  The cost of this coverage is embedded in the charges for the cards, but the charges are minimal.  This “free” insurance is offered as a benefit for the credit card user.  Although more prestigious cards have many insurance benefits, some of the lower tier cards have coverage as well.  In order to determine what coverage is available for a particular card, you must read the card benefit description.  Some of the more significant coverages include:

•   Purchase protection: This provides coverage for items that are purchased with the credit card.  If the items are stolen, lost or broken, the credit card company will pay to replace the item if the incident occurs within 90 days of the date of purchase.  There often is a maximum limit of $1,000.  There are a number of exclusions including loss due to war, riots, natural disasters, fraud and a number of other limitations.  Certain items are not covered including travelers’ checks, gift cards, animals, motorized vehicles, aircraft and numerous other items.  In order to understand the exclusions, each contract needs to be reviewed.  But it’s a nice coverage to have if you accidentally drop that $1,000 camera and break it a few weeks after you buy it.

•   Car Rental Loss and Damage Insurance: When you rent a car, the rental car agency will ask you to purchase damage coverage for the vehicle.  If you don’t buy the coverage, the rental contract obligates the renter to be responsible for any damage to the vehicle that might occur.  Your personal or business auto insurance coverage may provide coverage for any damage to the vehicle while you are renting it, but if you use the credit card, it automatically provides coverage for damage to the vehicle.  This coverage may be collectible only when your personal or business coverage does not apply, but there may be multiple situations where this might happen.  Using the credit card coverage can save you $10–$20 a day in lieu of buying coverage from the rental car agency.

•   Travel Accident Insurance: By using the credit card, you can get free accidental death and dismemberment coverage for traveling on a Common Carrier.  Some card companies provide up to $100,000 of coverage under this benefit.

•   Extended Warranty: If you use the credit card to buy an item with a warranty, the card company will extend the warranty for an additional period equal to the original manufacturer’s warranty period or up to one year beyond a five-year warranty.

Other benefits also may be available, but each card company is different.  Review of the card benefits is necessary to determine what may be available from a particular card.  What is important to remember is that this coverage is available to card users as a benefit of their card use, and it may provide protection from losses and avoid having to turn a claim into your personal or business insurance carrier.

Western Growers Insurance Services is a full lines insurance brokerage.  If you would like assistance with your insurance programs or just would like advice on any type of insurance need, please contact Greg Nelson.

 

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Posted in WG&S Magazine, July 2015 Issue | No Comments »

Bringing the School to the Farm

June 30th, 2015

What’s the difference between conventional and organic?  How do you handle pests on organic farms?  What are you doing to conserve water during the drought?

These are some of the questions posed during a recent field trip to Deardorff Family Farms in Oxnard, CA.  Deardorff hosted a group of 10th graders from Bell Gardens High School enrolled in the GREEN (Globally Responsible Environmental Education Network) Pathway program, and their science teacher, Jan Barber-Doyle.

The GREEN Pathway’s mission is to raise community awareness of the practices of good stewardship of the earth, help students build a vision for the emerging industries surrounding green technologies, and to promote careers in such fields.  Bell Gardens High School is also a recent recipient of one of Western Growers Foundation’s school garden grants.

Upon arrival at Deardorff Family Farms, we were greeted by Co-Owner Scott Deardorff and Marketing Manager Christine Smith.  After the students had a chance to stretch their legs a bit, we hopped back on the bus and headed over to one of their organic ranches.  We stepped off the bus to see a field of mixed greens and kale as far as the eye could see.  Across the street was a conventional celery ranch.  Scott explained to the students that Deardorff grows both organic and conventional produce, and he discussed both methods.  He then introduced us to their organic production manager, Richard Martinez, who was accompanied by his son, Alec Martinez, who also works at Deardorff as their data analyst.

As laborers harvested kale in the background, Richard pointed out that nearly every row had a different variety planted at different stages of growth.  He explained that this method of planting allows them to harvest continuously and keep up with market demand.

After Richard discussed their methods for planting and harvesting, Jan inquired about how they handle pests on an organic ranch.  Richard explained that they utilize many tools on their organic fields to remedy pests.  One way is through planting of sweet alyssum in the midst of their crops.  The sweet smelling plant is known for attracting beneficial insects like ladybugs and lacewings that eat other destructive pests like aphids.  Another way in which they combat pests is through the use of natural pesticides like fish emulsion.

In addition to pest control, the group also discussed the current drought and how that is affecting their operations.  Richard showed the group the drip irrigation system in place, which helps conserve water, and Jan mentioned that they had a similar drip irrigation system in their school gardens.

Following the trip through the organic ranch, the group headed back to the Deardorff headquarters to tour their impressive LEED certified facility.  Scott led the tour of their cooling, packing and shipping operations.  Students got to walk through the coolers and see boxes of fresh produce stacked up two stories high.  Scott described their efforts in building this green facility as a gift to their future generations.  All of the decisions they made, from the kind of carpet they installed to the light bulbs used throughout the facility, had the environment in mind.

Although a large production farm and school garden may seem worlds apart, they found a common ground in their love and stewardship of the land.

 

Posted in July 2015 Issue | Comments Closed

E pluribus unum

June 11th, 2015

Our nation was born almost 250 years ago when 13 disparate colonies realized they were getting a raw deal from “mother” England across the ocean.  They couldn’t hope to change the status quo individually, and as Benjamin Franklin famously declared, “If we do not hang together, we shall surely hang separately.”

Despite their rivalries and myriad differences, the 13 banded together as one voice and did the impossible — gaining freedom and independence from the most powerful empire on earth.  Their action ensured their survival and guaranteed their own prosperity, as well as ours today.

As individual business owners and operators, you are following that American example by banding together as Western Growers members to ensure you do not get a raw deal from the powers-that-be: from one voice to many voices — e pluribus unum.  That is the motto of the United States of America and that’s a motto Western Growers has also followed for almost 90 years.  Didn’t we start as the Western Growers Protective Association to join forces against the railroads that were overcharging us and providing poor service?

As I write this, I have just returned from Washington, D.C., where I was with the members of your board of directors and senior staff, all of whom have many years of experience articulating your worries, concerns and suggestions that affect your bottom line to members of our government.  It is not the most pleasant or easiest of tasks.  Getting the attention and understanding of important leaders living far across the continent is competitive and calculated work.  But if we don’t do that constantly and deliberately we will regret it and pay for it.

When fewer than 2 percent of Americans work in agriculture, it’s not easy to cut through the political cacophony and be heard.  You are busy with your time and minds spent on running your operations and living your lives.  That’s why you belong to Western Growers.  We are ready and able to do this for you.  If you need just one reason to renew your membership in Western Growers, make this the main one.  If you need more reasons than that, turn to page 8/9 where you can find a list of many more reasons and member benefits.

It’s not very expensive to be a member of one of the oldest and most influential trade associations for specialty crop producers in America, and we have not raised dues in 14 years and only once in the last 30 years!  We are your “go to” trade association.  Make it even stronger.

Our members represent half the conventionally-grown fresh produce grown in America and almost half of the organically-grown fresh vegetables and fruit.  Today, this organization is comprised of a passionate team of highly skilled and experienced professionals dedicated to helping you succeed and thrive.  Stay on the team and take part in the fight.  Renew your membership.  Western Growers needs you and I thank you for your membership!

Posted in June 2015 Issue | Comments Closed

Renew Your Western Growers Membership

June 11th, 2015

Western Growers is your connection to success.  From government affairs to water issues and from health care to innovation, we are here to support your needs.

We are on the front line in Sacramento, Phoenix and Washington, D.C., fighting on your behalf.  We are by your side in trade practice issues and here every step of the way with legal guidance, human resources training, logistics programs and more.  Our focused innovations in science and technology keep you on the leading edge of food-safety concerns.  No matter what part of your business is involved, Western Growers never stops working to make sure you have what you need to produce the best medicine in the world.

Here are five of the many reasons to renew your membership.  If you have questions, contact Randy Hause at 949.885.2265 or [email protected].

 

5 Reasons to Renew Your Western Growers Membership Today

1.            To make sure your voice is heard. Western Growers’ lobbying efforts in federal and state government address the water, immigration, environment and food safety issues that affect your bottom line.  Plus, through our Science & Technology team’s engagement with the FDA, your top concerns get the attention they deserve.

2.            To access ag-specific HR and legal training, compensation data and more.  Our expert training staff comes to you to provide training built especially for the needs of specialty ag companies.  Our Legal Hotline gives you one-on-one access to top-notch legal and regulatory advice, and the Personnel Procedures Manual guides you through the processes your company needs to be compliant.  Plus, the annual HR Practices and Compensation Surveys provide data for only specialty ag in California and Arizona—data you can apply to find and keep top talent.

3.            To get health benefits built for ag employees and business insurance to protect your company.  Western Growers Insurance Services (WGIS) is a full-service risk-management agency for the ag community.  Through WGIS, you have access to members-only health benefits—the Western Growers Assurance Trust—designed for your workers’ unique needs where and when they need it at a price that works for your company and employees.  WGIS also can help you protect your business with property and casualty coverage, crop insurance, automobile policies and more.

4.            To stay on the leading edge of ag innovation.  Through our Science & Technology team, you have access to commodity-specific food safety guidelines, scientific consultations for your company’s needs and monthly Lunch and Learn webinars to keep you updated about the latest technology.  You also are part of what’s driving research to address food-safety hazards and leading innovation in the industry through the SVG Thrive Accelerator program.

5.            To inspire the next generation of farmers—and consumers.  Through Western Growers Foundation, you support our mission to plant and sustain a fruit and vegetable garden in every willing Arizona and California school.  Children and their parents both eat more fruits and vegetables when the children have the chance to farm their own food.  So school gardens affect your company’s revenues now and in the future.

Renew your membership today at www.wga.com/renewals.

Posted in June 2015 Issue | Comments Closed

A “Date” with Destiny

June 30th, 2015

Albert P. Keck II

President

Hadley Date Gardens

Thermal, CA

 

Member Since 2005

Director since May 2015

Family Ties: Albert P. Keck II was named after his grandfather, who was responsible for bringing the Keck family to the Coachella Valley and introducing the business of agriculture into the family tree.  “My grandfather was an attorney in Los Angeles (graduated from USC School of Law early in the 20th century), who moved to the Coachella Valley sometime during the middle of his career when he was in his 40s.”

It’s not quite clear how, but he got in the date business and carried on both careers.  “My grandfather got us involved in dates, but I credit my dad as the builder of the business.”

After graduating from the University of Arizona with a degree in ag business, John Keck returned to the family farm when his father passed away.  “He jumped in with both feet and dedicated his life to a career in agriculture,” said his son.  “He boot strapped himself into a success taking us through recessions and periods of high interest rates to build a successful company.”

 

The Grandson’s Path to Ag:  After growing up in the Coachella Valley, Albert P. Keck II took a deliberate path out of the area to Stanford University, which isn’t an ag school and didn’t offer an ag degree.  After deciding a computer science career wasn’t for him, Keck was drawn to economics as an undergraduate degree and eventually matriculated to the food research department for his graduate work.  It was the closest thing to ag economics that Stanford offered.  Somewhere along the line his love of the land and agriculture was re-ignited.  “I spoke the language; it resonated with me,” he said of the food-related course work.

Keck readily admits that it was late in the 1980s and the United States was in a pretty big recession.  Jobs were hard to find which is one reason he went to grad school.

 

Picking A Career:  When Keck was in college, his father had the opportunity to buy the Hadley Date Company, which included the iconic retail store in the desert on Interstate 10.  But the elder Keck only was willing to make the purchase if the younger one was going to come home to the family business and run the operation.  “We had land and ranches in Arizona and New Mexico and my dad wanted to move a bit east and slow down.”

Albert Keck II agreed and 25 years later, he is in the midst of a revival in the date industry.

 

A Growing Business: Today, the family enterprises include operations in California, Arizona and New Mexico and comprise dates, pecans, alfalfa, and cattle.  Albert currently is president of Hadley Date Gardens, Inc. and chairman of the California Date Administrative Committee and the California Date Commission.

Several years back, the Hadley retail business was separated from the date growing business and sold.  The Keck family of companies no longer includes the familiar Hadley Fruit Orchard store.  Keck admits that running a retail store offered an entirely different set of challenges, and was not compatible with the family’s other agricultural businesses.

 

A Date Industry in Revival: The company’s number one business is growing, packing, processing, wholesaling and distributing dates all across America.  During the housing boom in the 1990s and 2000s, the date palm tree became a favorite landscape feature for upscale homeowners.  Consequently many acres of commercial date trees were sold for the trees themselves.  That led to a strong market for dates and re-investment in plantings over the past decade.  Right now the industry is thriving with the new trees bearing more fruit every year.  “We expect our volume to double over the next decade,” Keck said.

 

WG Connection:  Keck is very good friends with John Powell, who has been active in Western Growers for many, many years, including a stint as chairman of the board.  “I always admired the organization from afar but did not really consider it in my realm.  I thought of it as more of a vegetable organization, and believed, as a date company, we were different.  John encouraged me to join and get involved.  And we did so about 10 years ago.  Over the years, I did notice that Western Growers has breadth that I wasn’t aware of and it does seem to have expanded more into specialty crops such as nuts and dates.  In fact, Western Growers is a strong advocate for specialty crops.”

 

At the End of the Day: Albert lives in Bermuda Dunes with his wife, Caroline.  They have four children: two daughters and two sons.  “It seems like all of our spare time is taken up by raising our kids.  One friend called it the ‘spin cycle of life,’ but I love being a dad and all that goes with it.”

The Keck kids range from 15–22, with the third going off to college in the fall.  So far, none of the kids has plotted a career in the family business, but Keck says it is not beyond the realm of reality.  His oldest daughter is married and living in Wyoming, but he has a 20-year old daughter at Pepperdine University studying communications and marketing, which he said definitely has utility in the family business.  And his two sons, 18 and 15, have shown an affinity toward working the land and growing up as the typical children of a farming family.  Time will tell if any join the family operation.

 

 

Posted in July 2015 Issue | Comments Closed

2015 WG ANNUAL MEETING: Register now for 90th Annual Meeting in San Diego

June 11th, 2015

Come to The Grand Del Mar for networking, education and some of the best minds in agriculture, economics and entertainment.  Mark your calendar now to join Western Growers in San Diego November 8 – 11, 2015 for our Annual Meeting.  On top of the world-class networking opportunities, educational workshops and industry updates you’ve come to expect from the Annual Meeting, you will have the chance to enjoy the following:

The Pink Flamingos: A Party in the Paddock

If you’ve been to Annual Meeting in San Diego before, you may remember the energetic, creative performances of The Pink Flamingos.  If you haven’t seen this troupe perform, get ready for a creative, once in a lifetime performance you won’t want to miss.  You can catch The Pink Flamingos at the Suppliers’ Party.

Laugh with Comedian Tom Papa at the Award Dinner

With more than 20 years in stand-up comedy, Tom Papa has been successful in film, TV and radio as well as on stage.  You may have heard his hour-long stand-up special Tom Papa: Freaked Out, which was named one of the 10 Best Comedy Albums of 2013 by Laughspin.com.  Or you may have seen in on The New Adventures of Old Christine, Come to Papa or The Knick.  Or maybe you caught him in the Chris Rock film Top Five or are looking forward to seeing him as the host of the new Fox game show Boom!  He’s a regular on most major late-night shows, too.  Come hear his unique brand of humor in person at the Award Dinner.

See Stuart Varney at this year’s PAC Lunch

For more than three decades, journalist, economist and news anchor Stuart Varney has been a stalwart in economic news.  From his business news work at CNN to Wall Street Journal Editorial Board with Stuart Varney on CNBC to his decade-plus engagement with Fox News and then Fox Business Network, Varney has charmed and educated his audiences.  He is an authority on the economy, national and global news and more.  Support the Western Growers PAC while hearing from one of the foremost authorities on economic issues today.

Award of Honoree Announced: Bob Gray

Please join us in celebrating Award of Honoree Bob Gray. Bob has spent more than three decades in the agriculture industry, including 29 years with the Duda Company where he led Duda Farm Fresh Foods as CEO. Bob has served the ag community as part of numerous civic and industry organizations, including, of course, chairman of Western Growers in 2007 – 2008. We are excited to pay homage to our longtime colleague and friend.

Register today for the Annual Meeting by visiting www.wga.com. If you have questions, contact Randy Hause at 949.885.2265 or [email protected].

Posted in June 2015 Issue | Comments Closed

2015 WG ANNUAL MEETING: Bob Gray Chosen as Award of Honor Recipient

June 30th, 2015

Bob Gray, who will be honored by Western Growers in the fall for his body of work and accomplishments over the 40-year career in agriculture.  He is clearly enjoying the current chapter in his life which has him in a teaching role as he helps develop leaders in the agricultural realm in his position as president of the California Agricultural Leadership Foundation.

After all, it is a position probably much closer to what he anticipated doing in life when he was studying English Literature in his college days.  “I thought I would pursue a career in higher education,” he said.  “Get my masters, my Ph.D. and then teach college.”

Life has a way of interrupting the best laid plans, and instead, Gray has devoted himself to agricultural endeavors for the past four decades.

He grew up in Yuma, AZ., and in fact, his father was a successful buying broker, whose career was chronicled in The Packer in a 1950 edition that Gray currently has.  Evidently, he was a far better produce man than father as he left the family when Bob was five and was never much of a factor in his life, and didn’t directly influence Gray’s decision to go into the produce industry.

Gray received a dual major in English and Philosophy from the University of Arizona in 1971, and was awarded the highly-competitive British Marshall Scholarship that allowed him the opportunity to begin his postgraduate work at the University of Edinburgh in Scotland.  “It seemed like the U.K. (United Kingdom) was the best place to study English Literature,” he quipped.

Following the completion of his Master’s degree, Gray was accepted into the doctoral program at Colombia University in New York.  “I couldn’t afford it at the time so I deferred acceptance so that I could recharge my bank account.”

During his high school and college years, Bob did work in Yuma’s number one industry in several low paying jobs.  He remembers being at the very bottom of the pay scale as a high school student in a local cantaloupe shed.  “I was classified as ‘miscellaneous floor help’. ”  When he came back from Scotland, he worked for several different grower-shippers in less than management positions to raise money for his continued education.  With a single mom in a non-professional job, money was tight in the Gray household and so getting family financial help for his educational pursuit was out of the question.

It was around 1977 that Paul Couture offered him an office job during the short San Joaquin Valley melon deal.  Gray said his work was called “running the sheet,” which was basically keeping track of inventory manually by logging in sales and balancing them against the day’s harvest.  “Basically I was a human computer.  Today we would probably call that job a sales coordinator.”

It was a five- to six-week job that Gray kept for several years even as he moved on with his career.  Soon he landed an entry level management position with Ed Senini at his Yuma lettuce company.  For several years, his vacation from that position was spent “running the sheet” at Couture Farms.

It was somewhere along this time that Gray stopped deferring his acceptance into Columbia’s doctoral program and realized a career in the fresh produce industry was his calling.  In 1980, he joined a startup operation in the Salinas Valley begun by the Florida-based Duda Company.  The firm was expanding west, and wanted a vegetable operation in the so-called Salad Bowl.  Completely understating his distinguished career with Duda, Gray said, “I held a variety of positions with Duda over the next 29 years, which culminated in being the CEO of Duda Farm Fresh Foods.”

During that time he participated in, helped build and helped run a very successful vegetable growing, packing, processing and packing operation.  He was a well-known industry leader and a valued member of the Western Growers Board of Directors, serving as chairman of the board in 2008.

Shortly after departing Duda in 2009, Gray transitioned to his current position in the non-profit world.  He calls it “quite an adjustment.”  With no hint of boasting, he said in his years of management at Duda, he never had to go to the post office or deposit a company check in a bank.  There were other people who did that work.  “I went from having hundreds of employees in a very large for-profit business to managing a very small staff in a small nonprofit.  It was quite different, and a big learning curve.”

In fact, he counts managing that transition and succeeding in both entities as one of the top achievements in his career.  He explained that the many collaborators in the nonprofit endeavor—from funders to educators—are participating at their own will.  They have no obligation to the program and the CEO cannot order them to do anything.  “The success of the program depends on persuasion, influence and good will.”  He said it is an odd fit for a business executive who is used to giving orders in the for-profit world.  In the nonprofit world you “cannot dictate; you can only lead.”

It is this leadership role that has given Gray so much satisfaction over the past six years.  He is planning to step down from the position in the middle of 2016, which gives the Ag Leadership Foundation plenty of time to find a successor.  Bob is very proud of the work he has done at the Foundation.  Initially he launched a program review that resulted in both a renewal of the efforts and evolution of its mission.  The success of that effort, he said has been borne out by increased applications for participation and additional funding from industry.  Applications for the latest California Ag Leadership class are at a 14-year high.  And, he said the permanent endowment has grown by a factor of five.  Gray said the Ag Leadership Program is designed for mid-career executives who have held positions of responsibility.  The average age of the participant is about 35 and Gray said the curriculum is geared toward millennials rather than occupants of previous generations.

While this longtime agricultural executive is stepping away from this current position, he still believes he has value to impart and expects to work in some type of consulting role moving forward, especially in the area of governance for family businesses.

He is humble in his inclusion in the list of WG Award of Honor recipients.  “I was stunned when Tom (Nassif) called and told me that I had been selected.  Never in my imagination did I consider that I would ever even make a short list.  I feel like a pine tree in a forest of redwoods.”

However, he said he is following the advice he learned many years ago with regard to learning how to graciously accept a compliment.  “I am taking this as a compliment and I am honored.”

 

Posted in July 2015 Issue | Comments Closed

A Blast from the Past

June 11th, 2015

from WG&S December 1999

What Does the Future Hold?

(Editor’s Note: As 1999 and the 20th Century were coming to a close, WG&S asked several industry leaders to look down the road and predict the future.  This is an abridged version of that article that appeared in the December 1999 edition of WG&S)

 

WG&S: What is the future of production agriculture in California and Arizona in the 21st Century?  Will most crops survive or only the most profitable?  Where do you see fruits and vegetables coming from 10, 20, 50 years from now?  How will marketing and retailing change?  Will the Internet play a role?

 

Stephen Barnard, Mission Produce Inc.

“California agriculture will focus on high value crops.  Land, water and regulations are too tight to deal with low-value commodities that can be grown anywhere.  Fruits and vegetables will continue to be imported at a higher rate.  California will survive, but it will only be a portion of the pie, not the whole pie…

“The grower/shipper will provide a complete service that will include delivery, inventory control, pricing etc.  The difference in the next 25 years will be contracted pricing at retail, guaranteed profit to the retailer – (i.e. so much return on a specified space in the store.)  This direction will be positive for the proactive with opportunistic attitudes, and a final chapter for those resisting change.  This will all be done via the Internet.  Sales people can leave their personalities at home.”

 

Robert L. Meyer, Meyer Tomatoes LLC

“More greenhouse and glasshouse production will occur in California and Arizona with more emphasis on intensive farming techniques costing more per acre and less per package.  Vegetable production will come from central Mexico, the United States and part of Canada.  Greenhouse production will expand faster than organic production because of increased yields and quality making greenhouse product less expensive per unit produced.  Greenhouse production will also extend farming into the high desert.”

 

Gary Pasquinelli, Pasquinelli Produce

“Eventually there will be 100 percent bulk mechanized harvesting of vegetables.  Most crops will survive as we can compete with anybody in the world.  Perishables will continue to be produced from the traditional areas where they are now produced…

“More and more produce will be sold under contract.  Contract periods will extend six months to 12 months into the future.”

 

Sig Christierson, Major Farms Inc.

“The traditional areas will survive with changes, but there will be more competition from more places as crops are adapted through technology to other growing areas worldwide.”

 

John Powell Jr., Peter Rabbit Farms

“California and Arizona will continue to dominate.  The Internet will play a role.  More produce will be sold direct; there will be fewer brokers/middlemen, larger shippers and larger retailers.”

 

A.G. Kawamura, Orange County Produce LLC

“The demand for fruits and vegetables will increase with increased consumption driven by nutritional advances… Pressure for higher production at competitive production costs will force many to look at new greenhouse/factory production methods, displacement of major crop areas with intensive row crop production methods, and relocation to less expensive production areas….

“There will be many parallel systems of marketing and retailing.  Greenhousing will allow chain stores to enter into investment partnerships with producers.  “Local Grown” driven marketing plans will expand.  Internet technology will also continue to expand into wholesale and retail direct marketing, on both large and small scales.  The Internet will be the tool that re-introduces ‘agriculture’ back to the consumer.”

 

Posted in June 2015 Issue | Comments Closed

Sign Up for Sexual Harassment Prevention Training Workshops in Modesto, CA

June 19th, 2015

Friday, June 19, 9 – 11 am PDT (English) >> Register

If you own or do business in California and your company has 50 or more employees, anyone who acts as a supervisor at your company must, by law, take sexual harassment prevention training. Even if you don’t have 50 employees or operate your business in California, training is strongly recommended to protect your business and employees – every company needs supervisors who know the law.

We understand many sexual harassment courses are expensive and tailored to suit the needs of supervisors based in an office environment. They may not understand what managers in your industry go through. We do.

That’s why we’re offering Sexual Harassment Prevention training courses in Modesto. As the leading partner in the growing and shipping industries, we at Western Growers know the unique challenges your managers face.

Send your managers to our in person, interactive, two-hour, AB-1825 and AB-2053 compliant workshop to

  • learn the legal definitions of sexual harassment and employment discrimination
  • practice how to address issues
  • discuss legal obligations managers have to their employees
  • study the consequences of sexual harassment on individuals and your company
  • learn about abusive conduct in the workplace and why you need to address it

We offer courses in English and Spanish for a minimal cost:

  • Western Growers members: $50/attendee
  • Non-members: $70/attendee

If you have questions, please contact Adriana Robles at [email protected].

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Western Growers Financial Services Business Continuity Planning

June 2nd, 2015

Western Growers Financial Services has developed a Business Continuity Plan illustrating how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we must be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information on our business continuity plan.

Contacting Us – If after a significant business disruption you cannot contact us as you usually do at 1-888-737-8483, you should call our alternative number at 949-885-2343 or go to our website at http://www.wgfs.net where you will be provided with further contact information if applicable. If you cannot access us through either of those means, you should contact our clearing firm, Pershing LLC, at 1-800-635-9881 or go to its website at http://www.pershing.com for instructions on how Pershing LLC may assist you by providing prompt access to your funds and securities as well as entering orders and processing other trade-related, cash and security transfer transactions for your account(s).

 

Our Business Continuity Plan – We plan to quickly recover and resume business operations after a significant business disruption and respond by safeguarding our employees and property, making a financial and operational assessment, protecting the firm’s books and records, and allowing our customers to transact business. In short, our business continuity plan is designed to permit our firm to resume operations as quickly as possible, given the scope and severity of the disruption.

Our business continuity plan addresses: data back-up and recovery; all mission critical systems; financial and operational assessments; alternative communications with customers, employees, and regulators; alternate physical location of employees; critical supplier, contractor, bank and counter-party impact; regulatory reporting; and assuring our customers prompt access to their funds and securities if we are unable to continue our business.

Our clearing firm, Pershing LLC, backs up our important records in a geographically separate area. While every emergency situation poses unique problems based on external factors such as time of day and the severity of the disruption, we have been advised by our clearing firm that its objective is to restore its own operations to complete existing transactions and accept new transactions and payments within four hours. Your orders and requests for funds and securities could be delayed during this period.

Varying Disruptions – Significant business disruptions can vary in scope, affecting only our firm, a single building housing our firm, the business district where our firm is located, the city where we are located or the entire region. Within each of these areas, the severity of the disruption can also vary. In a disruption to only our firm or a building housing our firm, we will transfer our operations to a local site when needed and expect to recover and resume business within four hours. In a disruption affecting our business district, city or region, we will transfer our operations to a site outside the affected area and recover and resume business within four to six hours. In either situation, we plan to continue in business and notify you of updated contact information through our website at http://www.wgfs.net or our customer emergency number at 1-888-737-8483. If the significant business disruption is so severe that it prevents us from remaining in business, we will assure our customer’s prompt access to their funds and securities.

For more information – If you have questions about our business continuity planning, you can contact us at 1-888-737-8483 or [email protected].

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