Have an Innovative Food Waste Reduction Initiative? Tell WG About It!

October 1st, 2015

The upcoming October issue of the WG&S magazine includes an article on sustainable agriculture that features two WG members — The Nunes Company and Church Brothers — and what each is doing to sell edible fresh produce items that were previously discarded or not harvested. Their innovative approaches to reducing food waste are stories worth telling, especially since they have the added benefit of being eco-friendly. 

Although we regularly inform legislators, regulators and the general public about our members’ efforts to be more sustainable, Western Growers is taking an active interest in the topic of food waste. We want to tell more stories like these to showcase our member’s food waste initiatives and how those efforts are reducing the use of natural resources.     

Does your company have a food waste initiative you would like to share with us so we can feature it in a future article? If so, we would love to hear about it. Please contact Cory Lunde at (949) 885-2264 or Jeff Janas at (949) 885-2318 to pass it along!      

Nassif Headlines Bayer Horticulture Symposium

October 6th, 2015

On Wednesday, September 30th, Western Growers President and CEO Tom Nassif was a featured speaker at the Bayer Horticulture Symposium held in Puerto Vallarta, Mexico. Addressing a multinational audience, Nassif spoke on trends in fresh fruit and vegetable consumption and how the industry is responding to evolving demands from buyers and consumers.

Citing a recent survey from the Produce for Better Health Foundation, Nassif noted that while per capita consumption of produce has declined in recent years, there is a positive upward trend among younger demographics, which bodes well for the future. Even so, Nassif pointed out that Americans consume less than half of the daily recommended amount of fruits and vegetables, leading to substantial public health costs. By closing the consumption gap, the United States could save more than $60 billion per year in costs related to cancer, coronary heart disease, and stroke – not to mention countless lives. However, the federal government does not place a high enough priority on programs that encourage increased produce consumption, according to Nassif. Case in point: While U.S. dietary guidelines recommend that fruits and vegetables comprise more than 40 percent of our daily intake, USDA spending on programs related to this food group amount to less than 15 percent of its total budget.

Shifting to evolving buyer and consumer demands, Nassif articulated that agriculture is “facing increased scrutiny for our use of inputs and resources,” and that buyers and consumers are “becoming more sophisticated, more concerned about where and how their food is grown,” especially in light of the ongoing drought in the western United States. More and more, agriculture is being made to account for the environmental impacts of our operations, as evidence by the growing legislative, regulatory, and marketplace pressures being placed on the industry. But Nassif expressed optimism for the future, articulating that “the enduring characteristic of our industry is adaptability,” and despite the many challenges facing our industry, “somehow we manage to stay in business and continue feeding the world.”

Nassif spent the balance of his speech highlighting some of the innovations that will allow agriculture to thrive in the 21st century, including the development and adoption of technologies related to precision irrigation, mechanical (and, eventually, autonomous) harvesters, renewable energy, food waste, and vertical farming.

For more information, please contact Cory Lunde at (949) 885-2264.

Voluntary GMO-Free Labeling: The Law of Unintended Consequences

October 5th, 2015

The law of unintended consequences has been used by philosophers, economists and sociologists to describe unforeseen outcomes of well-meant action—generally referring to public policy enacted by the government.  A famous example of this “law” is the 18th Amendment, ratified in 1919, prohibiting the manufacturing or sale of alcohol in the United States.  One unintended consequence of Prohibition was to strengthen organized crime as bootlegging provided the financial resources to pursue other illicit activities.  Another was the loss of 14 percent in tax revenue that came from alcohol sales.  Finally, after more than a decade of weak enforcement and the onset of the Great Depression, the 21st Amendment ended the Noble Experiment in 1933.

Well-intended federal legislation addressing the labeling of genetically modified foods may have unintended consequences for a segment of the very industry it aims to help.  Passed by the House in July, a bill sponsored by Rep. Mike Pompeo [R-KS] would create a uniform national system governing the labeling of genetically modified foods, or GMOs.  Let me be clear.  No one is comparing this bill, the “Safe and Accurate Food Labeling Act of 2015,” to Prohibition.  In fact, elements of the Pompeo bill are vitally important.  To date, more than 70 bills have been introduced in more than 30 states to require mandatory GMO labeling.  Three states have already passed such statutes: Vermont, Connecticut and Maine.  This patchwork of state standards will increase costs for producers and result in both confusion and higher prices for consumers.  We strongly support the need for federal pre-emption of these state laws, which is the heart of the Pompeo bill.

However, another component of the bill could backfire on the industry: Voluntary GMO-free labeling.  This provision would establish a USDA-accredited certification process for those who want to label their products as GMO-free.  Perhaps voluntary GMO-free labeling is intended to garner trust and goodwill among consumers concerned about the safety of GMO foods.  But this is where the legislation is short-sighted.  Right now, there are only eight genetically modified crops commercially produced in the United States.  Only three are fresh produce items—papayas, squash and sweet corn—with two more, the Arctic apple and Innate potato, approved by federal regulators.  With so few GMO fresh produce crops, what is the need or benefit of labeling fresh produce GMO-free?

Let’s take a logical look at how voluntary GMO-free labeling could play out.  Once the USDA-accredited certification process is in place, fresh produce companies will likely seek to capitalize on the marketing advantages of labeling their products GMO-free.  Public opinion research tells us that many consumers lack good information about GMO technology and have concerns about its presence in foods.  A GMO-free label in the fresh produce aisle does nothing to educate consumers about GMO technology, but it does tend to validate the unfounded fears perpetuated by GMO critics.

As consumers see more of these labels in the produce aisle, they will only become more alarmed about the safety of GMO foods everywhere in the store.  From a consumer perspective, seeing increased GMO-free labels on produce leads to two conclusions: 1) if companies are labeling their products GMO-free, then GMOs must have some negative health impacts, and 2) if a fresh produce item does not have a GMO-free label, then it must be GMO.  Consumers will be more likely to avoid products without the GMO-free label, which in turn will compel virtually all fresh produce companies to use the GMO-free label.  In effect, the voluntary GMO-free labeling provision will become a mandate.

The science tells us that genetically-modified foods are safe. There are potential benefits for farm practices and productivity, such as reduced water and pesticide use, increased yields using less land, and protection of crops from devastating diseases.  While there has been little GMO introduction in the produce industry, we want to be open-minded about the potential benefits, and we need consumers to be open-minded as well.  The confusion and increased distrust that would flow from a GMO-free labeling movement would make it harder to educate consumers about GM technology.  Any potential benefits of GMO technology in the fresh produce sector will remain elusive if companies marketing fresh produce are drawn into a GMO-free labeling regime that, however unintentionally, hardens consumers’ negative perceptions about the safety of the technology.

The Pompeo bill is now awaiting consideration in the Senate.  We hope the good provisions in the bill will advance without the voluntary GMO-free labeling provisions—and the unintended consequences that will follow.

Are You Considering Solar Power?

October 5th, 2015

In April 2014, Western Growers launched a Solar Energy Initiative (SEI) to periodically provide information that may be useful to WG members interested in solar power.  Here are some of the most recent developments related to the current tax credit for solar systems, as well as some of the considerations to determine if a solar system is the right fit for a particular business.

We hear more and more companies are considering installing a solar system.  According to Greentech Media Research, U.S. solar installations grew by 30 percent in 2014 and are forecast to maintain this strong growth trend though 2015.  Some believe the federal Investment Tax Credit (ITC)—which currently stands at 30 percent—has motivated a number of companies to pursue solar power options.  Unfortunately, the ITC is expected to expire by the end of 2016.  Congress may renew ITC prior to the deadline; however, if it does, the percentage of the tax credit is expected to be reduced.  In order to qualify for the current 30 percent federal tax credit for solar systems on commercial properties, solar systems must be placed in service before December 31, 2016.

Businesses can benefit from assessing their current energy consumption and system.  When determining if solar power is the right fit for a business, assessing reductions in energy bills, as well as the logistics of a system installation in a property, can make a difference.  Solar power may be the best long-term solution for businesses with high energy costs and with fixed ground mount systems as they offer the most flexibility and return on investment.

To learn more about this initiative, get periodic updates and to join our distribution list, contact WG’s Sonia Salas at [email protected] or by phone at 949-885-2251.

 

About the SEI: It is a process WG is utilizing to provide ongoing information about the solar energy industry and also to offer WG members access to information about financial options and solar providers.  The solar providers in this initiative have been vetted by the financial institutions also participating in this initiative.  Although WG is relying on this vetting process, Western Growers is not affiliated with, does not endorse and does not require the use of any particular financial institution or solar provider.  Western Growers members are solely responsible for selecting their financial institution or solar provider.

SUSTAINABLE AGRICULTURE: Using the ‘Whole Plant’ Gaining Traction

October 5th, 2015

The Nunes Company launched its Broccoleaf product more than a year ago as a way to utilize a part of the broccoli plant that was discarded.  The item has been well accepted and has received kudos from food writers across the country.

At the time, Matt Seeley, vice president of marketing for the firm, said it was akin to the meat industry’s “nose to tail” effort.  Proponents of that foodservice cooking movement strive to utilize the entire animal in food preparation, thus more efficiently utilizing the natural resources needed to raise that animal.

Seeley said The Nunes Company was researching other byproducts of its vegetable production that might also have utility, such as cauliflower leaves.  Recently, Church Brothers, another leading grower, processor and shipper of fresh vegetable from Salinas, Calif., launched a similar program championing the same concept.  The company is calling its play in this emerging food trend #ImperfectVeg, and claims it helps reduce food waste and water usage.

Just like the Broccoleaf, the idea is to sell edible fresh produce items that were previously discarded or not harvested.  Church Brothers is concentrating not on brand new items but products that were not sold because they were below industry standards for cosmetic attributes.  The company launched its new product line in July, introducing it at the Produce Marketing Association Foodservice Conference in Monterey, Calif., as the items are targeted to that sector of the industry.

“The trend is going viral in the foodservice sector due to the Compass Group helping tell the #IDP story and build awareness with restaurant operators, chefs and consumers,” said Vince Ballesteros, Church Brothers vice president of business development, in a press release touting the idea.  “We are seeing more support and requests for these edible and nutritious fresh produce items and we’re working with our distribution partners to make the introduction and implementation of these products successful.”

The company launched the concept with a handful of items including romaine leaves, cauliflower, broccoli floret bits, a cascade mix, and a second crop kale blend, baby chard blend, and clipped spinach product.

In that company press release in July, Kori Tuggle, vice president of marketing for the firm, said this emerging trend is a gift to the produce industry and its growers.  “Ideally, if we are able to educate chefs on what they are receiving, the #ImperfectVeg could be more acceptable with the foodservice sector as consumers choose off a menu description; compared to at retail where shoppers buy with their eyes.”

Reached in mid-September, a couple of months into the program, Tuggle said:  “Our customers are still working on educating operators and chefs about the product, its advantages and the sustainability story behind each item that they have the opportunity to share on their menus.”

She said that while expanding the product line is always top-of-mind, currently, the company is concentrating on establishing the initial releases and soliciting feedback from chefs, as well as helping them tell the story to their restaurant patrons.  The value proposition for chefs, she said, is the ability to tout the sustainability story to their customers.  Foodservice operators are interested in telling that story and consumers are drawn to items that have a good story behind them.  Tuggle called it the “halo” effect, creating good will for a menu item.

The initial lineup of items consists of:

Romaine Leaves

14 pound box with liner – not washed.

The harvest practice of “peeling down” a full head of Romaine until it reaches expected size, color and has no cosmetic flaws creates a vast amount of byproduct.

 

Cauliflower

20 pounds – not washed.

This eco-friendly product is various shapes, sizes and color and sold by weight compared to the traditional count.  Standard product specification for traditional cauliflower is a crisp-white colored head with no cosmetic blemishes.

 

Broccoli Floret Bits

4 three pound bags – washed three times

These are the smaller pieces of broccoli that fall through the sizer and do not make standard, market size specification as a full broccoli floret.

 

Cascade Mix

5 Pounds – washed three times

The cascade blend is the byproduct of the company’s whole leaf production line; it is the center, small leaves of a head of Romaine that do not make “whole leaf” size specifications.

 

Second Crop – Kale Blend, Baby Chard Blend, Clipped Spinach

7 pounds – Not Washed

The standard version of these three crops starts from seed and can take 45 to 65 days to grow a first crop, depending upon time of year (summer vs. winter).  Because this crop starts from seed, the highest point of water usage in the crop cycle is from the point of seed to germination when it establishes a shallow root system.  Once the crop is harvested the first time, the left over plant system is typically rotated back into the soil.

With its eco-friendly program, Church Brothers grow a second crop with the same established root system; it takes only 14 to 21 days for the plants to produce a second crop and uses half the water.  The difference between the first and second crop is that approximately 10 percent of the leaves harvested will be “out of standard specification.”

 

Tuggle said the story rather than the price differential is the value proposition.  She said you cannot compare the price with standard packs because they are different in some material way in each case.  For example, she said the romaine leaves are a byproduct of the firm’s romaine heart harvest.  The pack does not exist in a standard form.

EL NIÑO: WATER YEAR 2016 Will it Live Up to the Hype?

October 5th, 2015

By Tim Linden

 

You can hardly pick up a newspaper or check out the internet without someone mentioning the Great El Niño lurking in the Pacific Ocean that will soon be peppering California with a series of strong storms.

“El Niño is on track to become one of the most powerful on record, strongly suggesting California could face heavy rainfall this winter, climate scientists say,” was the first sentence of a story in the Los Angeles Times in early September.

“Coming to the West Coast Soon!  A Mega El Niño!” screamed a headline for the September 11 edition of Newsweek, which is now an online publication.

These stories all talk about the current temperature and atmospheric conditions in the Pacific Ocean, noting that the pattern is there for a large El Niño event, which historically has meant well above-average rainfall in California…particularly Southern California.  In early September, the latest government El Niño forecast, issued by the National Weather Service’s Climate Prediction Center, said that computer models unanimously favor a strong El Niño.  Furthermore, the agency observed there is a 95 percent chance that El Niño will continue through the winter, which is when California would typically see its share of the rainfall caused by this environmental condition.

While the computer model generating the 95 percent probability is no doubt based on sound mathematical science, it is a bit misleading because the sample size is so small.  There have not been thousands or hundreds or even tens of similar conditions to draw upon.

Mike Anderson, the official climatologist for the state of California, said there have been exactly six El Niño events in California since 1958, and they each have been different.  Some brought above average rain to the entire state; others did not.  “The sample size is small,” he told WG&S on September 11.  “The one constant is that in each case, the south coastal regions did get above average rainfall.”

If he would predict anything, and he is clearly reluctant to do so, it would be that the coastal regions in Southern California will get above-average rain for water year 2016, which began on July 1, 2015 and extends until June 30, 2016.

In studying the six previous El Niño events, Anderson said they each shared warmer-than-usual Pacific Ocean temperatures, but they did not result in the same precipitation falling in the same regions.  “That suggests there is more to the story than just warm ocean temperatures,” Anderson said.

He said climatologists are currently studying the atmospheric conditions that have occurred during those El Niño events to create more data points and come up with a better predictive model.  In fact, Anderson said that during the second week of November, the Scripps Institution of Oceanography near San Diego is bringing together some of the best climatologists in the country to discuss this year’s El Niño and try to better estimate its eventual impact.  Anderson is specifically interested in the findings of Klaus Wolter, who works for the National Oceanic & Atmospheric Administration in Boulder, Colo.  Wolter is highly regarded and decorated for his predictive work on the El Niño conditions.  Anderson noted that he is currently analyzing atmospheric conditions during those El Niño years searching for potential patterns or “signposts” that can be used to create more accurate predictive models.  “It is very complex,” said Anderson, when asked why this is still a relatively new science.  And he repeated that the sample size is very small.

As the graphic with this story reveals, the six strong El Niños in the last 57 years occurred in Water Year 1958 (July of ’57 through June of ’58), Water Year 1966, Water Year 1973, Water Year 1983, Water Year 1992 and Water Year 1998.  Water years ’58, ’83 and ’98 resulted in above-average rainfall throughout the state, with the last of those three (1998) delivering a huge amount of water.  The other three produced varying amounts of rainfall throughout the state.  In each instance, Sothern California was above average but parts or all of Northern California remained dry.  In fact, in both Water Year ’66 and Water Year ’92, the state as a whole received less than normal precipitation, despite being in El Niño conditions.  That means two of the six El Niño’s in the last 60 years did not deliver rivers of rain.

Many scientists are noting that this year’s El Niño looks more like the strong one in Water Year ’98 that any other.  But there is still work to be done if it is to mirror that year.

In the Los Angeles Times article mentioned above, Stanford University Climate Scientist Daniel Swain said: “The present El Niño is already one of the strongest on record and is expected to strengthen further through the late fall or early winter months.  At this juncture, the likeliest outcome for California is a wetter-than-average winter.”

Some of the effects of the El Niño have already been felt as Southern California has experienced several strong storms this summer, which is very rare.  But for this El Niño to reach the precipitation levels reached during Water Year ’98, some experts say the east-to-west trade winds of the Pacific Ocean along the equator need to collapse, which would allow the sea near Peru to warm up even further.

California’s climatologist, Anderson, said the fact is that scientists do not know exactly why one El Niño has been different than another.  This year’s situation will certainly add more information that can be used down the road.

He said for California, the best situation is an El Niño that gives steady rain over the length of the season to maximize precipitation and storage capacity, and minimize flooding.  However, he said above-average rainfall in any area will be beneficial.  While the state as a whole could use lots of rain in Northern California to fill Oro and Shasta and our larger northern reservoirs, there are lots of smaller coastal reservoirs up and down the state that will greatly benefit from any rain that’s above average.  And in many instances, Anderson said the watershed can go a long way to filling a small reservoir even if El Niño delivers a series of a short-lived intense storms.  He added that if atmospheric conditions do let the entire state benefit from this phenomenon—as it has done three of the six most recent El Niños—there can be quite bit of recovery, even in just one year.

Again, he said it is a complex situation that needs to factor in the location of each reservoir and its water rights situation to determine its ability to fill itself.  He said some reservoirs must pass the inflow from creeks and rivers to below-dam users, and can’t just use that water to fill up a low reservoir.

In summing up just how this year’s El Niño will impact California’s four-year route, Anderson’s first comment when contacted was probably the most telling: “It depends!”

It depends on how strong the El Niño remains, where the water falls, when it falls, if it brings snow and the water rights of each reservoir.  But he still allowed that, at the current time, the signs are very good.

2015 WG ANNUAL MEETING: Set Sail for San Diego

October 5th, 2015

The Grand Del Mar in San Diego will serve as the elegant backdrop for the 90th Annual Meeting of the Western Growers Association.

Geographically, the association has not moved that far since its first meeting back in 1926, which was held about 100 miles east as the crow flies in Brawley, Calif., at the Planters Hotels.  But in every other way, the organization has moved significantly since those 26 companies came together to form the Western Growers Protective Association.

During this 90th anniversary of that mid-1920s event, hundreds of people will come together to celebrate agriculture’s progress, to network with potential customers and clients, to learn about a plethora of fascinating topics from some of the best minds in agriculture and economics, and to break bread and enjoy social events with friends and colleagues.  The three-day event will be held November 8–11, and promises to have something for everyone.

“Overall, the 90th Annual Meeting is a great opportunity to have fun, strengthen our bonds and address the critical issues and opportunities facing our industry,” said WG Chairman Vic Smith in a letter he penned to the association membership.  “Thanks for your continued support of Western Growers and the agricultural industry.  We look forward to seeing you in San Diego!”

 

Top Notch Speakers

Noted Fox News personality Stuart Varney is expected to get the Annual Meeting started off in a big way as the featured speaker during the Monday, Nov. 9, Political Action Committee luncheon.  Varney is an economist by trade and a media personality somewhat by accident who believes there will be a dramatic jump in the American economy over the next several years, as the Republicans take control of the White House.

“I think we are about to see 4-5 percent growth on an annual basis,” he said in mid-August.  “We are going to see a change in policy as the Obama (economic) model is cast aside and a more Reaganite philosophy is adopted with smaller government and lower tax rates.”

The host of the Varney & Co. show that airs every weekday from 9 am to noon (Eastern time) on the Fox Business Network predicts the Republicans will win the presidential election in November of 2016.  He is confident that will happen and believes the stock market will rally in 2016 in anticipation of that election result.

Varney said it makes no difference which Republican wins the nomination, and eventually the White House, as each of them has a plan for economic growth that is far better than the doldrums he believes we are in.  Specifically, he expects the elimination or significant reduction in taxes on foreign profits by American corporations will drive the economic growth that he is forecasting.  He said American companies have billions of dollars in profits parked overseas waiting to be re-invested in the United States.  When the tax rates on these profits are reduced or eliminated, he believes a significant portion of that money will come home and spur our economy.

Varney’s 40-year career as an economic journalist got started quite by chance.  After graduating from the London School of Economics, the British-born Varney hitchhiked around the world ending up in Hong Kong.  He lucked into a job as an economic reporter and repeated that path a few years later in San Francisco when he landed a spot on the first American business show.  He subsequently joined CNN and then left in 2001 to host CNBC’s Wall Street Journal Editorial Board with Stuart Varney.  In 2004, he joined Fox News as a business reporter and has appeared on many different shows besides his own.

Varney does have some connection to his audience as he is a tree farmer in the Catskills of New York where he grows hardwood timber used for high end furniture, such as black cherry and red oak trees.

Futurist David Evans, formerly of Cisco, is the keynote speaker for the Major Luncheon that will be held on Tuesday, Nov. 10.  He boldly predicts that within two decades there will not be a single human harvesting fruits and vegetables in the United States.  He sees a world where robotics will be widely used to conquer the laborious tasks, such as picking fruits and vegetables.

Since his departure from Cisco, Evans has been working on technology to connect all the machines in your home.  Wouldn’t it be great, he said, if when you drove into your garage that action alerted the heater to turn on, the doors to unlock, the music to play and the oven to preheat.  And the reverse happened when you pulled out of your garage in the morning and closed the garage door….your house would automatically go into shut-down mode.

His startup company is called Stringify and, as the name suggests, endeavors to string everything together within your house.

Titled “Thought for Food,” his speech will analyze the challenges facing the agricultural industry and discuss the major advances that are coming down the pike to solve those challenges.  Evans believes a technological revolution is lurking around the corner for the fruit and vegetable industry.

Evans has a history of accurate predictions.  More than 20 years ago, he identified the World Wide Web as a place that would profoundly change commerce.  He foresaw the Internet facilitating online shopping, and was one of the first, if not the first, to coin the phrase the Internet of Things (IoT).  That basically refers to the practice of placing computer chips in everything—your car, your refrigerator, your light switches, your medicine cabinet—so that all of these inputs can interconnect for the betterment of humankind.

Evans said the Internet of Things, which he has since updated to the Internet of Everything, will have a profound impact on agriculture. He said this “technological tsunami” will completely change how agriculture produces its products and conducts business.  He believes vertical factory farming is on the horizon.

During that same luncheon Chairman Smith of J.V. Smith Companies, Yuma, Ariz., will take a look back at his year at the helm of WG and comment on many of the issues confronting the fresh produce industry.

 

Fascinating Workshops

The knowledge and information the attendees garner from the featured speakers will only be enhanced by their participation at the workshops.

 

TOP CHEF DEMONSTRATION

Chef Shirley Chung, who is the chef owner of Twenty Eight Modern Chinese Cuisine restaurant in Irvine, Calif., will be the featured presenter at a cooking demonstration that will be held Monday morning, Nov. 9.

Born and raised in Beijing, China, Chef Shirley, as she is called, came to the United States at age 17, graduated from college with a business degree and began working in the Silicon Valley in the business world.  In her late 20s, she decided to become a chef.  After being trained in both French and Italian cuisine, she started her cooking career in the Napa Valley under Thomas Keller at The French Laundry, perhaps the finest restaurant in Northern California.  She has since worked and opened restaurants for renowned chefs such as Keller, Guy Savoy, Jose Andres and Mario Batali.  In fact, she open Keller’s Boudin restaurant in Las Vegas about five years ago.  She was a finalist for season 11 Top Chef New Orleans and Top Chef Duel.  Before Top Chef, she was the executive chef for China Poblano.  Under her guidance, China Poblano was nominated for the Best New Restaurant Award by James Beard in 2011.

Last year she opened Twenty Eight Restaurant as the first operation she can call her own.  She calls her style “modern American cuisine with a Chinese soul” and said it is very heavily oriented toward vegetables.  “I love vegetables so much,” she said.  “They are sexier than protein.  There are so many textures and varieties and so versatile.”

She likes to use fresh produce, concentrating on its seasonal aspect, noting that there is no seasonal component for protein.

 

GMO – WHAT’S ON YOUR LABEL?

Expert panelists will discuss the increasing calls to require “GMO-free” labels on fresh produce and the implications in the marketplace.  The panel was still being assembled at press time but for a preview of the topics that will be under discussion, check out Tom Nassif’s President’s Notes on page 4 of this issue.

 

STEP INTO THE INNOVATION ARENA

This Shark Tank-like workshop will allow entrepreneurs to pitch their offerings to a team of judges as well as the audience to determine the top AgTech innovations.  Our team of judges will be comprised of Robby Barkley of Barkley Ag Enterprises, Steve Barnard of Mission Produce, Neill Callis of Turlock Fruit Company, Edwin Camp of DM Camp and Sons, Dave Petrocco Sr. of Petrocco Farms and Bridget Rotticci of Bengard Ranch.

 

UNDER ATTACK: WATER RIGHTS, WATER USE

In California, legal and political conflict over water rights and allocations has erupted as the ongoing drought tests the state’s complex system of laws and water districts.  In Arizona, water managers have started planning for historic reductions from the Colorado River even as the state’s political leaders must plan for the water demands of continued urban growth.  A roundtable of water experts will discuss water rights and how the drought is bringing unprecedented public scrutiny to what many farmers consider an iron-clad right.  The panel was still being assembled at press time.

 

Entertainment, Fun & Award of Honor

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’ Event on Monday, Nov. 9.

 

Award Dinner

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.  Earlier this year, you were able to catch him in the Chris Rock film Top Five and 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.

 

AWARD OF HONOR to BOB GRAY

Bob Gray will be honored by Western Growers for his many years of service to the organization and the fresh produce industry.  Currently, he is president of the California Agricultural Leadership Foundation, after having had a distinguished career with Duda Family Farms.

After studying English literature in his college days, including a Marshall Scholarship for graduate work at the University of Edinburgh, Gray expected that he would pursue a career in higher education.  “Get my masters, my Ph.D. and then teach college.”

But life has a way of interrupting the best laid plans, and instead, Gray has devoted himself to agricultural endeavors for the past 40-plus years.  He grew up in Yuma, Ariz., and so was always around the fresh produce industry, including summer job work.  Gray received a dual major in English and philosophy from the University of Arizona in 1971, and then went off to Great Britain to continue his studies.  Following the completion of his Master’s degree work, Gray was accepted into the doctoral program at Colombia University in New York, but couldn’t afford it at the time, so deferred acceptance so that he could recharge his bank account through employment in the industry he knew best.

In the mid-1970s, 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.  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.  He stayed with the firm for almost 30 years, rising to the level of CEO of Duda Farm Fresh Foods.

During that time he was a valued member of the Western Growers Board of Directors for many years, serving as chairman of the board in 2008.

Shortly after departing Duda in 2009, Gray transitioned to his current position in the Ag Leadership role.  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 give the Ag Leadership Foundation plenty of time to find a successor.  Gray is very proud of the work he has done at the Foundation.  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.

WATER RIGHTS Discussion About Overhaul Moving into Public Arena

October 5th, 2015

The granting of water rights in California is a very complex system that has remained largely out of the public eye for a century.

The first laws codifying those rights were enacted in 1914 creating that year as an important one in the discussion.  With the current four year drought creating headaches for water districts, municipalities, businesses and homeowners alike, the discussion about who gets what and why is surfacing in town hall meetings, coffee shop chatter and around dinner tables throughout the state.  The media is often noting that rights are either pre-1914 or post-1914—meaning they were either in place when those laws were enacted or granted after that action date.  In fact, the pre-1914 water rights go back 75 years earlier when Gold Rush times first established the need for a water priority system.

In this current year, virtually any one with post-1914 rights might as well have just kissed their allotment goodbye.  For years, those early water rights have gained somewhat of a sacred place in law.  But now they are starting to be questioned.  Why, some are asking, should legislation and rights established 100 or more years ago be sacred.  Why shouldn’t water rights be granted in some other fashion based on need or a priority system not entirely determined by the date the right was established.

The proponents to change saw their viewpoints highlighted quite publicly in the September 13 edition of the San Francisco Chronicle.  A two-page spread in the Chronicle introduced the concept of altering the water rights system by articulating the problems of Mountain House, a 15,000-resident community near Tracy in San Joaquin County.   When first proposed in the early 1990s, this planned community was expected to be built over a 30-year period and eventually have about 15,000 households and 40,000 residents.  It is within a hours or so (no traffic) of Silicon Valley and other Bay Area population centers.  It is a feeder community for Bay Area businesses.  The first foundation was poured in 2003 and the first school opened a year later.

This summer, the water agency serving Mountain House had to turn off the water flow because the rights to supply a city only 10 years old were junior to the historic rights owned by so many others.  City leaders were able to find an alternate source but not until the media made the concern front page news.

Now many are wondering why an almond grower down the road or a community in Southern California should automatically have superior rights to that water just because it was granted that right a century or longer before.

Though historians question whether Mark Twain actually said it (“Whiskey is for drinking; water is for fighting over.”), the sentiment of his famous quote will surely be accurate if the California Legislature starts tweaking 150-year old water rights.  Lawyers all over the state are sharpening their pencils, and opening up wealth management accounts, in anticipation of the battle.

The Chronicle article outlined five possible fixes for the state’s current water shortage problems and water rights issues, but the one that is garnering the most debate is number five.  They are reprinted here in abbreviated form:

 

1. Start with better information

Little is known about how much water many rights holders actually use—which makes it difficult, if not impossible, for regulators to limit big and illegal draws, and preserve supplies when they’re scarce.

Last year, when levels of freshwater declined in the Sacramento-San Joaquin River Delta, the biggest users there blamed each other for illegally taking water.  State water regulators were ill-equipped to act.

On one side were the U.S. Bureau of Reclamation and the California Department of Water Resources, which move water through the delta to farms and communities farther south. On the other were hundreds of local farmers, growing crops like corn, alfalfa and asparagus.

To figure out who was in the wrong, the State Water Resources Control Board had to do something astonishing—begin collecting basic records on who had water rights and how much they were drawing.  The matter remains unresolved.

Better accounting of water rights, stricter reporting of water use, more measuring gauges on rivers and creeks and increased monitoring would give regulators a better grasp of the water situation.  In turn, that could lead to more efficient water allocation.

 

2. Ensure reasonable water use

California’s Constitution mandates that people use water reasonably and beneficially. Many suggest using this legal doctrine to clamp down on less efficient uses of water, especially among senior rights holders who have been virtually free of regulation.

State officials have done this before.  For example, they’ve limited draws on rivers after findings that wildlife habitat took priority over crop production.  They once stopped a water agency from wasting supplies by flushing out gopher holes.  But such restrictions have been limited, and many say they should be expanded during dry times.

“I think an argument could be made that if you’re a senior water right user using 4 acre-feet of water on a crop and they could be grown with 3 acre-feet of water, that extra foot may not be being used reasonably or beneficially,” said Peter Gleick, president of the Pacific Institute in Oakland, which advocates for sustainable water policy.

 

3. Allow easier water transfers

Transfers allow parties that don’t get enough water under the rights system to purchase it from those who do.  Economists argue that with a well-functioning market, water inherently moves to the best uses.

Although some farms, businesses and public agencies have exchanged water under the current system, they face too many obstacles, experts say.  They range from the inability to measure what’s bought and sold to a cumbersome patchwork of local, state and federal regulation.

 

4. Regulate groundwater

Water shortages in California’s rivers and streams have prompted farmers and others to pump a lot more groundwater—a water source the state does not currently regulate.  Not only has over-pumping begun to deplete aquifers, it’s sucking water out of rivers and creeks above the aquifers, interfering with surface water rights.

California lawmakers last year approved first-ever groundwater regulation designed to keep the state’s aquifers from drying up.  However, the legislation doesn’t require restrictions for at least five years and won’t have much effect for a decade or two.

Some are calling for quicker action in light of a NASA report this summer that showed spots of the Central Valley floor dropping nearly 2 inches a month because of over pumping.

 

5. Consider system overhaul

Some say the drought, by exposing problems with how California allocates water, represents the perfect opportunity to throw out the water rights system.

“It would make a lot more sense if we could just start from scratch,” said Richard Frank, director of the California Environmental Law and Policy Center at UC Davis. “I hope and expect that we could come up with a system that would bring far more reasonable water use.”

Frank is among several critics who say regulators have the power—and duty—to reshuffle the deck of water rights so that those serving the greatest good get priority.

“At a time of unprecedented shortage, are you saying that growing alfalfa and rice is a higher or better use than serving urban customers up and down the state?” Frank asked.

Even Gov. Jerry Brown has suggested the system’s priorities may need to be re-examined if the drought continues.  The administration, though, has conceded this is a last resort.

More than 100 years’ worth of investment hangs on the water rights system, and many have a lot to lose with any restructuring.

Take Bernie Dietz.  The 75-year-old chemical engineer, who has dabbled in farming his entire life, sank his retirement into a plot of land outside Tracy instead of the stock market.  Before buying his 85 acres and planting about $1 million worth of almond trees, he made sure the parcel was served by a water agency with senior rights.  Dietz, like countless others, made calculations based on existing water rights.  Irrigation districts built canals.  Cities constructed dams.

To limit investment losses, those in favor of overhauling the system suggest California use public funds to buy out longtime water rights holders.  Others recommend that the state phase out water rights slowly, to reduce the pain, or transition the rights to fixed terms.

 

California’s Water Rights

(Reprinted from the San Francisco Chronicle)

Riparian right: Those who own land along a river or creek are entitled to tap the waterway.  These are the most senior water users.  Riparian rights have been in place since California adopted English common law upon statehood.  They don’t allow users to store water, just divert it to meet immediate needs.

Pre-1914 appropriative rights: Since most people don’t own land along a waterway, the state allows people to acquire water rights on rivers and creeks, then pipe the water off.  Rights staked before 1914, when California began requiring permits for draws, are generally free of regulation and allow rights holders to divert and store water in the amounts originally claimed.

The system follows a principle known as “first in time, first in right.”  The right was determined by actual use—and maintained by continuing use.

Post-1914 appropriative rights: Since 1914, the right to draw water requires approval from the state.  Post-1914 permit holders, also known as junior water rights holders, are the first to be restricted in dry times.

What is the Future of GMOs?

October 5th, 2015

Genetically Modified Organisms (GMOs) have become a hot topic in recent years as more media and anti-GMO groups have raised awareness about their existence.  During a recent webinar hosted by Western Growers, Dr. Peggy Lemaux with the University of California, Berkeley, provided a great overview of the current status on GMOs.  I was not surprised to hear that scientists view issues differently than the general public.

New Pew Research Center surveys of citizens and members of the American Association for the Advancement of Science (AAAS) revealed that while 88 percent of the scientists believe it’s generally safe to eat GMOs; only 37 percent of the public have the same belief.  But what does this really mean and what is the future of GMOs?

Genetic Modification (GM), Genetic Engineering (GE), GMOs and biotechnology are terms sometimes used interchangeably.  However, it is important to recognize that while GE, GMOs and biotechnology are equivalent terms, GM is not the same.  Genetic Modification is limited by the traits available in the same species and includes different ways of breeding: natural breeding (traditionally influenced by insects/humans), classical breeding (done by scientists since the 1930s) as well as marker assistance selection (the newest technique utilized by scientists to speed the breeding process).  On the other hand, GMOs are the result of GE or biotechnology, which are tools in genetics that allow a more wide-ranging use of traits from different species.

Earlier this year, I read an article in The Packer titled, “GMO food needs image rehab, but it may take time.”  This article illustrated clearly how consumers have a preference for “natural,” regardless of what their understanding of natural is, and how this has influenced public perception on GMO food.  It is still to be determined if consumers will eventually associate GMOs with health or societal benefits if other traits are brought to the market (for example drought resistant crops, crops that offer protection against inflammation, cancer and cardiovascular disease, and crops that utilize less fertilizer).  The author was optimistic and concluded that current active resistance against GMO food will fade into history.

According to the USDA, in 2014 the percentage of GMO commercial acreage in the United States was mainly distributed among six crops: sugarbeet (98%), cotton (96%), soybean (94%), corn (93%), canola (93%) and alfalfa (25%).  These crops have been mainly engineered to be pest-tolerant crops (BT crops) and/or herbicide tolerant and most of them are currently used in about 75 percent of processed food as food ingredients.  In the produce industry, the concept of GMOs has not been explored widely; most of the whole fruits and vegetables are GMO free, only GMO sweet corn, squash and papaya are currently commercialized in the U.S. market.

While Genetic Engineering has the potential to alleviate many economic, social and environmental issues related to food production, consumer perception, the regulatory environment and scientific community play a critical role in their adoption.  The U.S. Department of Agriculture (USDA), the U.S. Food and Drug Administration (FDA) and the U.S. Environmental Protection Agency (EPA) are responsible for evaluating the safety of GMOs.  Although the current regulatory framework is comprehensive, complex and very expensive, it has not been updated since 1986.  Genetic Engineering has clearly evolved since then.

Poor public perception coupled with an unchanged regulatory system are impacting GE efforts and adoption.  In addition, the potential benefits that could be obtained through GE have not been explored and shared as much as findings of studies with no merit or media blogs without accurate information.  A clear example is a widely publicized study completed in 2012 by Gilles-Eric Seralini in Europe.  This study linked GMOs to cancer, liver, kidney damage and hormonal disruption.  The results of this study were featured in television and shared through social media.  When European Food Safety Authority conducted a review of the study, it was determined that the study had no merit.  Yet, this did not get the same attention and publicity.

For the GE community to continue to explore this technology, several issues will need to be addressed, including public perception, peer-reviewed research, peer-reviewed food safety tests, labeling issues, allergen concerns, contamination of the food supply and potential resistance.  The regulatory and scientific community can play a big role in addressing these challenges and determining the future of this technology.  For many, GMOs will become a necessity at some point as growers are faced with producing more with less.  It is not about proving who is right or wrong, but about finding ways to deal with challenges in our food supply chain; this may or may not mean the use of GMOs.

Join this conversation by providing your comments and feedback in our blog: http://www.wga.com/sci-tech/agknowledge

Legislator Profile: Frank Pratt represents Arizona’s 8th Legislative District including parts of Pinal and Gila counties

October 5th, 2015

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

I know your roots run deep in Arizona, give us your family background.

My grandfather on my mother’s side came to territorial Arizona during the 1880s Silver Rush.  He settled in Florence where he was a grocer and a baker.  My father came out here in 1914 from Ohio.  He went back to Ohio and served in World War II before coming out for good, and also settled in Florence.

My dad was a jack of all trades, working on ranches as a builder and a carpenter.

I was born in 1942 and grew up in Florence in Pinal County, which is halfway between Phoenix and Tucson.  It was an old town and in an era when there were lots of pioneers around.  I grew up as a kid in the 1940s and ‘50s prior to television.  It was a time when you sat around telling stories for entertainment.

It was an average childhood.  I played a lot of baseball and lived a whole different life than people live today.

After a couple of years in high school, I went and worked on my brother’s farm.

 

Farming was your first career.  Was that by accident or a goal of yours?

Growing up I always thought I’d be a farmer.  From the time I was 12, I was working on farms.  That’s something you could do back then.  I could drive a tractor and a pick-up at a very early age, and as a teenager I could pull a shift driving those vehicles as well as any adult.

I started my farming operation and farmed for a while in both Marciopa and Yuma counties.  In Yuma, I farmed a variety of seed crops, including everything from peas and onions to safflower and a Bermuda crop.  I also grew alfalfa.  In Maricopa, I was primarily a cotton grower, but I grew other crops as well, including broccoli and carrots.

Along the way I did get married and had two sons.  One died in adulthood, so I have just one surviving son.

In the 1980s, I started a business building pools in Casa Grande with my son and did that for a number of years.

 

What got you involved in politics?

I always had an interest in politics, but I was too busy making a living for most of my life to get too involved.  I did have the opportunity to meet and get to know some very impressive people in the Legislature.  I idolized what they did and the impact they had on policy, and it was something I thought I’d like to do.

The time came when I either had to make a move or stop talking about it.  I first started running for the Legislature in 2004 and got elected in 2008.  There was a bit of learning curve in getting elected that I came to understand.

 

Did you go into office with a specific agenda?

I did not have a signature issue, but I was pro-business.  I had always been self-employed and I wanted government to help business, commerce and agriculture and not be a hindrance.

I came into office as part of the first Republicans elected in Pinal County.  Those districts always elected Democrats, but we changed that.

 

Was the immigration issue an important one during your election and how do you stand on that issue?

It was a bit of an issue in 2008, but it reached its pinnacle a little bit later.  Of course, the issue has been around for a long time, especially in southern and central Arizona.  Some people see it as a crime issue and others talk about it as it relates to a guest worker program.  There are a lot of different areas involved in the immigration issue.  Of course, another important factor is that Mexico is our number one trading partner.  That has to be taken into account.

It really hasn’t been one of my big issues.  Crime and public safety are important issues, but I don’t see them as part of the immigration debate.

I think we all agree that we want to live safely and get a good education and have a good economy that creates a lot of jobs.  That’s my focus.

 

When you came into office, Arizona was in a fiscal crisis.  Has the Legislature righted that ship?

In a lot of ways we have.  We have taken some good steps.  What’s a little troubling to me is that sometimes ideology trumps common sense.

I am an advocate for business and making sure we don’t pass laws and regulations that get in the way of businesses.  The energy area is a big concern of mine.  I am concerned over the rules that the EPA (Environmental Protection Agency) puts on states in areas such as water rights and air quality.  For example, in Arizona, air conditioning is what makes our economy run.  We live in a very hot area and you need it.  I am against regulations that make it more expensive to live here or run a business here.  I find those regulations a bit problematic.

Agriculture is a big consumer of energy and water and has done a lot to evolve and progress over the years.  I remember when we use to have to make multiple passes in a field to harvest a crop and now they have developments that make that much more efficient.  And the advances in food safety are fascinating.  It fascinates me how they can pinpoint exactly when and where a product was grown.

Labor is another big issue.  We need a good labor force.  I’ve been at the border at 1 and 2 in the morning watching the day laborers cross so they can make a living that day.

This is all part of commerce and I’m very interested in doing what we can to help this continue rather than to stop it.  I am willing to do whatever has to be done to help commerce thrive.  Government should be an aid to commerce.

 

Arizona is noted for its business-friendly Legislature.  Do you think that is an accurate description?

I think we do a good job, especially when you compare us to the federal bureaucrats like the EPA.  There is such a gridlock in Washington that a lot of the agencies have an incredible amount of power to do things without going through the legislature.

When I came into office we were in the middle of a $3.5 billion revenue vs. spending problem.  It wasn’t a fun time to be a legislator.  It wasn’t if we were going to cut but how much and where.  It got ugly at times.

 

Where do you put yourself on the political spectrum?

I didn’t make this up so I won’t take credit for it, but I drive on the right side of the road but not so far right that I go off the road.  I am driven by my pragmatism.

 

What is in your political future?

I term out of the House in 2016 and I have formed a committee to run for the Senate seat in this district.  It is my intention to switch to the Senate and run for the seat in District 8 held by Barbara McGuire.  This is one of three districts with split representation.  Most districts are either very heavy toward Democrat registration or solidly Republican.  This district has split registration.

That does make you more pragmatic.  I have to represent people from both parties.  When someone from your district calls you with a problem, you don’t ask them what party they are, you ask how can you help.

 

Our members and many of your constituents produce the best fruits, vegetables and nuts in the world.  Do you eat our products?

Fruits and vegetables… I love both.  I love fresh corn on the cob and I have a gizmo that then takes the kernels off the cob.  There is nothing better than fresh vine-ripened tomatoes.

I do like to cook and do it often.  I like salads and have been known to have a kale salad.  When I cook, I usually serve two vegetables.  I love a green vegetable and then another one.  I love broccoli in season and zucchini and crookneck squash.  I love to steam them and use a little butter and salt and pepper.  That’s very good.

When I make salads I like to mix a lot of things together like mangos and apples and a little peach.  I love the spring mixes.

Update on 2015 Environmental Legislation

October 5th, 2015

The 2015 legislative year is nearing completion and, at the time of this writing, WG staff is awaiting final action from the governor on bills that were passed by the Legislature.  This year was filled with the usual battles in the capitol corridors over health, labor and water bills.  However, none of these bills or issues captured the attention of the state or nation quite like SB 350 authored by Senator President pro Tempore Kevin De Leon (D – Los Angeles) and SB 32 authored by Senator Fran Pavley (D – Agoura Hills).

WG had a very active role in opposing both bills.  SB 350 especially became a focal point for the Legislature, the Governor’s Office, and for the many stakeholders affected. 2015 will be remembered as a pivotal year on climate legislation.

SB 350 was introduced early in the year with great fanfare from the environmental activists and Senator De Leon.  The bill mandated a staggering 50 percent reduction in petroleum use in the state, an increase of the Renewable Portfolio Standard to 50 percent and similarly increasing the energy efficiency of buildings.  Not surprisingly, the oil lobby mounted a significant opposition campaign on the bill.

WG also joined a large opposition coalition and was a significant player in opposing the bill as it moved through the Legislature.  WG’s attention was primarily focused on the unrealistic expectations and unforeseen consequences imparted by the 50 percent petroleum reduction mandate.

Efforts to stall the bill were complicated by the governor’s affinity for the measure as evidenced by his State of the State speech in January and by the full throttled support from Senator De Leon.  Ultimately, the moderate Democrats in the Assembly exercised their clout on the bill and succeeded in stripping the petroleum reduction mandate in the final days of session.  This revised version of SB 350 passed out of the Legislature and is awaiting a certain signature by the governor.

Although SB 32 did not capture as much attention as SB 350, it is arguably the bill that would have the most impact upon the daily activity of California’s businesses and residents over the long-term.  In order to reach the goals of SB 32, you would have to accomplish the goals outlined in the original version of SB 350 and much more.  SB 32 was introduced to extend the mandate of AB 32 which was passed in 2006.  AB 32 requires that greenhouse gases be reduced to 1990 levels by 2020.  SB 32 originally required the California Air Resources Board to approve statewide greenhouse gas emissions limits that are the equivalent of 40 percent below the 1990 level to be achieved by 2030 and 80 percent below the 1990 level by 2050.  Again, the bill faced strong opposition from a large coalition of industry groups including WG.  The moderate Assembly Democrats compelled the author to drop the 80 percent mandate and subsequently held the bill in the Assembly Committee on Natural Resources.  Senator Pavley has indicated that she will continue to advocate for the greenhouse gas emissions reduction mandate next year.

WG staff remains vigilant on further efforts to mandate emissions reductions for a reason.  Agriculture was not directly targeted in the first phase of the AB 32 implementation programs.  However, the industry was included in the recent AB 32 scoping plan for emissions reductions potential.  California has already tackled the low-hanging fruit of emitters through Cap and Trade and other regulatory mechanisms.  As additional legislative and regulatory mandates are rolled out, agriculture will have to adjust daily operations in order to attain what will likely be burdensome and unrealistic emissions reductions expectations.

For now at least, farmers and many other California businesses have won an important reprieve from unrealistic environmental demands.

DEAR JON: Forms Available for Large Employer ACA Compliance

October 5th, 2015

Dear Jon,

We are a large employer.  I’ve been trying to stay on top of the rules relating to large employers and their IRS reporting obligation under the Affordable Care Act (ACA) but I have a few questions.  Are the reporting forms final yet?  Which employees do I report about and which can I exclude?

Rankled by Reporting Requirements

 

Dear Rankled,

 

Final Forms & Instructions Available

In September, the Internal Revenue Service released final 2015 reporting forms and instructions and accompanying guidance (“IRS Q&A”).  Under Section 4980H of the Internal Revenue Code, large employers are required to file a separate Form 1095-C for each of their full-time employees and a transmittal on Form 1094-C for all returns in that calendar year.

Large employers are defined as those with 50 or more full-time employees (including full-time equivalents) in the preceding calendar year.  For more on calculating large employer size, please read the in-depth article that appeared in the November 2014 edition of this magazine.  It can be found on the Western Growers website (www.wga.com/magazine).

 

Employees Who Receive a Form 1095-C

A large employer must file a Form 1095-C for each employee who was a full-time employee of the employer for any month of the calendar year.  A large employer that sponsors a self-insured plan must file a Form 1095-C for each employee who enrolls in the self-insured health coverage or enrolls a family member in coverage, regardless of whether the employee is a full-time employee in any month of the calendar year.

An employee is a full-time employee for any month of the calendar year if he or she averages at least 30 hours of service per week.  Under the final regulations 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours per week.

 

Employees Who Do Not Receive a Form 1095-C

According to the IRS Q&A the following employees are examples of those who would not receive a Form 1095-C

•    An employee who was not a full-time employee in any month of the year; or

•    An employee in a limited non-assessment period for al 12 months of year (for example, a new variable hour employee still in an initial measurement period).

For more on the definition of the limited non-assessment periods, see the Form 1095-C instructions.  Please note that initial measurement periods are used only by employers who have implemented the ACA’s Look-Back Rules.  The Look-Back Rules allow employers more flexibility to determine which employees qualify as full-time time and allow an employer to measure seasonal, part-time and variable hour employees over periods of up to 12 months to make this determination.

 

Implications

Large employers will file Form 1095-C Forms for each employee working at least 30 hours a week or 130 a month (save for the limited exceptions noted above).  This administrative burden will require immediate attention because the failure to file will trigger serious and substantial penalties of $250 per return capped at $3 million.  If the failure to file relates to the information return (the forms filed with the IRS) and a payee statement (the Form 1095-C required to be furnished to full-time employees), the penalty is doubled.  If the failure is due to intentional disregard, the $250 fine is doubled to $500.  It is imperative that large employers make sure their reporting obligations are in compliance.

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.

NLRB Establishes New Standard For Joint Employer Status

October 5th, 2015

By Patrick Moody

 

In the recent case of Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015), the National Labor Relations Board established a new, and much broader, standard for determining if separate companies are joint employers under the National Labor Relations Act.  The new rule changes what has been the board’s standard for determining joint employer status for the last 30 years, and it expands the scope of joint employer status from just those employers who directly control the terms and conditions of employment, to include employers who only indirectly affect such terms and conditions.

Under the old standard, in order for a company to be a joint employer, it needed to “share or codetermine those matters governing the essential terms and conditions of employment” with the employees’ direct employer.  In addition, an employer had to exercise direct and immediate control over employees and “meaningfully affect matters relating to the employment relationship such as hiring, firing, discipline, supervision and direction.”

Under the new standard, a company will be considered a joint employer if it “possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful bargaining.”  This broad category of “control” can be exercised indirectly if, for example, it is expressed through an intermediary, or if there are present in a labor contracting agreement, contractual provisions between companies that preserve the right to control terms and conditions of employment, even if that right is never exercised.  The board explained that the new standard is necessary because existing labor law, under the old standard, was “increasingly out of step with changing economic circumstances, particularly the recent dramatic growth in contingent employment relationships.”  The board also indicated that the new standard would facilitate more collective bargaining.

In the case above, Browning-Ferris Industries of California, Inc. (BFI), operated a waste recycling facility and hired a labor contractor to provide employees for sorting recyclable items inside the facility and to perform basic housekeeping tasks.  The International Brotherhood of Teamsters petitioned to represent 240 of the contracted employees and a hearing was held to determine if BFI and the labor contractor were joint employers.  The NLRB Regional Director presided over the hearing and held that, under the existing standard, BFI was not a joint employer because it did not directly set pay rates, provide benefits, or supervise employees, and had no direct control over recruitment, hiring, discipline, termination, work assignments or scheduling.  Neither did BFI have any authority to authorize overtime work.

However, the board overruled the regional director on appeal by the union, and announced the new broader standard.  In applying the new standard, the board held that BFI had control over the contracted employees and was, in fact, a joint employer with the labor contractor because: 1) the labor contract between BFI and the contractor was terminable at will by either party, 2) BFI had the right to reject any worker that the contractor hired, 3) Even though BFI did not participate in day-to-day work assignments, BFI’s unilateral control over specific productivity standards was a “clear and direct connection between BFI’s decisions and employee work performance,” 4) contracted employees had to follow safety standards set by BFI, and 5) the labor contract prevented the contractor from paying employees more than BFI paid its direct hires for performing the same work, and any raise in pay for the contracted employees required approval from BFI.

 

What This Means for Employers

This decision by the board is significant and is likely to affect the business and labor relationships of many companies in California, especially businesses that rely on nontraditional workforces (i.e., independent staffing services, subcontractors, distributors, labor contractors and franchisees).  Joint employer status can potentially require a company to participate in collective bargaining with unions and subject a company to unfair labor practice charges, strikes and boycotts because of conduct by other employers with whom the company does business, but has no ownership interest in whatsoever.

 

Pat Moody is a partner in the law firm of Barsamian and Moody, Fresno, CA.

WGF and Driscoll’s Partner to Give Back

October 5th, 2015

Western Growers Foundation (WGF) has been graciously awarded a $10,000 grant from Driscoll’s as a part of its Regional Community Grants Program.  The grant monies will be redistributed in the form of twenty $500 edible garden grants to K-12 schools throughout Merced, Monterey, Santa Barbara, Santa Cruz, Shasta, Tehama and Ventura counties.

Tom O’Brien, senior vice president and general counsel for Driscoll’s said, “Our community grants program supports solutions that build vibrant communities with a new level of understanding, partnerships, economic growth, and innovation between agriculture and the very communities that make the work possible.  We are excited about our school garden partnership as it will foster the knowledge of where our food comes and the people that make it possible—from the farmworker to the farmers.”

Together, WGF and Driscoll’s will further this discussion about food through these grants that will go towards bringing fruit and vegetable gardens to schools specifically with a large low-income Latino student population and/or migrant education program.  Schools meeting these requirements are encouraged to contact us for an invitation to apply for the grant.

In addition to the grants, Western Growers Foundation hopes to further educate students at grant-recipient schools about future opportunities in agriculture through farmer visits.  Similar farmer visits at the Phoenix Zoo Learning Garden this past spring proved successful and informational to students.  After each visit, students were surveyed and 93 percent of them were able to name three fruits or vegetables grown locally and 69 percent were able to name at least two career positions available in agriculture.

We hope to bring a face to farming through these visits and are looking for Western Growers’ members in the above mentioned counties who are willing to donate their time to help educate students.  We welcome any members employees who would like to share with students what it’s like to work in agriculture, the various career possibilities and the overall importance of the industry.

If you know of a qualified school or work in ag and would like to volunteer for farmer visits in 2016, please contact me at [email protected] or 949-885-4789 for more information.

90th Annual Meeting — Innovation Arena Workshop

October 1st, 2015

Western Growers new Center for Innovation and Technology is expected to open later this month in Salinas, California.  As part of that initiative, we are launching a comprehensive “innovation” program to help find and accelerate the availability of technologies and services that will help members deal with the pressing problems of producing more high quality safe fresh produce in an era of scarce resources and intense regulatory and marketplace pressure. We are currently recruiting companies to locate in the Center for direct interaction with the industry and will be featuring several of them during our 90th Annual Meeting in San Diego at a workshop entitled the “Innovation Arena.”

This Shark Tank-like workshop will allow entrepreneurs to pitch their offerings to a team of judges as well as the audience to determine the top AgTech innovations. Join WG Vice Chairman and Workshop moderator, Sammy Duda, as he leads what is sure to be a lively discussion showcasing several new offerings in the technology arena while our diverse panel of industry judges asks participants probing questions. As an attendee, we also look forward to getting your opinion on the potential benefit these technologies would have on your operation.  

Workshop Details

Workshop III – The Innovation Arena

November 10, 2015 – 9:15 a.m. to 11:15 a.m.

Ballroom A

Moderator

Samuel D. Duda, Vice President, Duda Farm Fresh Foods

The Judges

David Petrocco, President, Senior Grower, Petrocco Farms

Bridget (Bengard) Rotticci, Project Manager, Bengard Ranch

Neill Callis, Sales, Exports, and Business Operations, Turlock Fruit Company

Edwin A. Camp, President, D.M. Camp & Sons

Stephen J. Barnard, President and CEO, Mission Produce

Robert K. Barkley, President and CEO, Barkley Ag Enterprises

For more information on this workshop or on the Annual Meeting, contact Randy Hause at (949) 885-2265.

Annual Meeting Webpage

Annual Meeting Sponsors

See who else is going

The FSMA Preventive Controls for Human Food Webinar is TOMORROW

October 1st, 2015

With the publication of FDA’s final Food Safety Modernization Act (FSMA) rule for Preventive Controls for Human Food and Animal Feed, the produce industry has come together to provide a FREE series of webinars to help industry members understand the final rules and implications for their businesses.

FDA’s final FSMA regulations will have a significant impact on how the produce industry does business. The first two major FSMA regulations, Preventive Controls for Human Food and Animal Feed, have recently been published and five other major FSMA final regulations are anticipated in the coming months. Understanding which businesses are covered by these regulations and how the provisions of each regulation applies to your specific operation is the first step in being prepared to be compliant with these new regulations. 

In an effort to ensure industry members are well informed and have an opportunity to ask questions directly of FDA about these new regulations, we are inviting you to participate in these webinars. 

The first webinar is on Friday, October 2, 2015, at 1p.m. EDT / 10 a.m. PDT and focuses on “Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food.”

Please click here to register for this webinar or contact Sonia Salas more information at (949) 885-2251.

Nassif Congratulates Negotiators on Trade Deal

October 6th, 2015

Yesterday, U.S. trade negotiators announced that an agreement had been reached with 11 Pacific Rim nations on the Tran Pacific Partnership (TPP), a trade deal expected to increase market opportunities for agricultural products, including specialty crops. Western Growers’ president and CEO Tom Nassif, issued a statement to the media congratulating negotiators for reaching the deal.

Nassif’s statement read as follows:

“Western Growers would like to congratulate U.S. negotiators and their TPP counterparts on their tireless efforts in reaching a deal that promotes enhanced trade between the Pacific Rim nations. We look forward to reviewing the final text of the recently completed agreement, which is critical for the U.S. fresh produce industry as the TPP countries represent more than 46 percent of our fruit, vegetable and tree nut exports. Additionally, this agreement provides a framework for additional countries in the Pacific Rim to join in the future, which will create further opportunity for our commodities.

Western Growers has emphasized throughout the negotiations the need for a TPP agreement to provide significant market access opportunities and strong Sanitary and Phytosanitary (SPS) enforcement provisions that guarantee real access to these critical markets. We hope to find these objectives have been accomplished.”

Since the final language has yet to be seen and is not expected to be available for some time, most organizations who issued statements were cautiously optimistic in their support for the deal. According to a Washington Post story, by law, “(President) Obama “must wait at least 90 days after notifying Congress of the deal before he can sign it and send it to Capitol Hill, and the full text of the agreement must be made public for at least 60 of those days.” The 90-day clock starts ticking later this week.  Congress has 30 days to review the agreement before it goes public. In the meantime, the International Trade Commission has 105 days to conduct a full economic review of the deal.  

For more information, contact Cory Lunde at (949) 885-2264.

Former Federal Water Wars Judge Joins 90th Annual Meeting Water Workshop Panel

October 6th, 2015

Western Growers is excited and pleased to announce the addition of former federal district court judge, Oliver W. Wanger, to the panel of our water workshop entitled, Under Attack: Water Rights, Water Use during the 90th Annual Meeting in November in San Diego.

Judge Wanger is a member of Wanger Jones Helsley PC in Fresno, California, a firm specializing in litigation issues involving the environment, real estate and land use, employment and labor relations, construction dispute and defects, white collar crime and commercial business.

Judge Wagner has enjoyed a distinguished career in the legal arena. Most notably, his decisions while presiding on the U.S. District Court for Eastern California in Fresno — where he served for 20 years — have shape water rights and Endangered Species Act litigation. While on the bench, Judge Wanger ruled on numerous important California water and environmental cases, many that have been reviewed in the Court of Appeals and one in the United States Supreme Court. His rulings on water issues and Endangered Species Act cases have largely been bemoaned by the environmental community.

Additionally, Mr. Wanger served as a Pro Tem Trial and Settlement Judge to the Superior Court of California, County of Fresno. He sat by designation on the United States Court of Appeal for the Ninth Circuit in Pasadena, California. His career commenced as a Deputy District Attorney for Fresno County, followed by civil business trial practice in Fresno, and also as a contract City Attorney for the City of Mendota. Mr. Wanger was a Sergeant in the United States Marine Corps Reserve during 1960-1967.

For a complete bio on Judge Wanger, CLICK HERE.

The workshop will take place on Tuesday, November 10, from 1:30 p.m. to 3:00 p.m. and features several other prominent water experts including, Stephen Patricio, WG board director, and president and CEO of Westside Produce; Grady Gammage, Jr., senior fellow, Morrison Institute, Arizona State University; Thomas Berliner, partner, Duane Morris LLP; and Ellen Hanak, director PPIC Water Policy Center.

For more information in the Water Workshop, contact Dave Puglia at (949) 885-2252. For more information on the Annual Meeting, contact Randy Hause at (949) 885-2265.

Pezzini Named as Ocean Mist CEO

October 6th, 2015

As reported in The Packer and other industry outlets, Ocean Mist Farms announced that Joe Pezzini will succeed Ed Boutonnet as president and CEO of the Castroville-based grower-shipper. The leadership transition will take place over the next year. Pezzini joined Ocean Mist in 1983, was promoted to Vice President of Operations in 2001, and became the company’s Chief Operating Officer in 2009.

Pezzini will take over the reins from Boutonnet, who joined Ocean Mist in 1970 and became president and CEO in 1990. The company became the largest grower/shipper of fresh artichokes in North America under his leadership. Boutonnet will remain as chairman of the board.

For more information, please refer to Ocean Mist’s press release announcing their leadership succession plan.

Brown Signs Safe Harbor Piece-Rate Bill into Law — WG to Hold Advisory Webinar

October 13th, 2015

On October 10th, Governor Jerry Brown signed legislation that provides certain employers of piece-rate employees, with a safe harbor against pending or potential class action lawsuits for uncompensated non-productive time (NPT) and rest and recovery periods. The bill, AB 1513, codifies Gonzalez v. Downtown LA Motors and Bluford v. Safeway — effective January 1, 2016.  These cases require employers to pay piece-rate employees for rest and recovery periods (and all other periods of “nonproductive” time) separately from (and in addition to) their piece-rate compensation. However, with regard to rest and recovery periods, AB 1513 also codifies the Labor Commissioner’s interpretation, so that rest and recovery periods must be paid at the “regular rate of pay.”

Employers must also specify additional categories of information on a piece-rate employee’s itemized wage statement: (i) the total hours of compensable rest and recovery periods, (ii) the rate of compensation paid for those periods, and (iii) the gross wages paid for those periods during the pay period. If employers do not pay a separate hourly rate for all hours worked (in addition to piece-rate wages), then the employer must also list (i) the total hours of other non-productive time, (ii) the rate of compensation for that time, and (iii) the gross wages paid for that time during the pay period.

Western Growers Vice President and General Jason Resnick will be conducting a complimentary webinar exclusively for Western Growers members to help clarify what this legislation means for employers.

The webinar will discuss the new law and provide observations and insights into the passage of the law and what it means for agricultural employers going forward. Specifically, you will learn how this law will apply to your workplace and what to do now to prepare to 1) avoid retroactive liability for uncompensated NPT, and 2) to modify payroll systems to properly compensate for rest and recovery periods.

Webinar Details

AB 1513: NPT Safe Harbor and New NPT Obligations Webinar  

Oct 20, 2015 2:00 PM PDT

REGISTER NOW

For more information contact Jason Resnick (949) 885-2253.