FOOD WASTE: Firm Pioneers Use for Farm & Environment Benefit

December 15th, 2015

While working on Wall Street, Dan Morash, who studied organic chemistry at Yale and is a Dartmouth M.B.A. graduate, spent a lot of time looking at the adaptive reuse of waste.
The global head of energy and infrastructure for CIT was responsible for evaluating the financial and risk characteristics of various waste technologies for his company.  In his research, Morash realized that technology that captured value from food waste was practically nonexistent, despite the enormous amount of waste that was being produced.  “As much as 40 percent of food production gets wasted.  It’s just an astounding number,” Morash exasperatedly said during a recent interview.
It’s one of the reasons that Morash left a very good job on the East Coast in investment banking to pursue a technological process he came across that could help reduce the amount of food being wasted.  In 2011, Morash joined his brother David in California and together took the necessary steps to start California Safe Soil (CSS), which is a fresh food recycler that aims to increase the productivity of farms at a low cost, while also helping to improve the environment.  In 2012, they secured an agreement with Safeway Company, signed a research agreement with UC Davis and leased a facility in West Sacramento that is currently serving as their pilot plant — and they were in business.

What Makes CSS Unique?
Several companies divert food waste and process it for other uses.  So why is California Safe Soil unique?  As founder and managing member of the company, Morash developed a patent-pending composting process that collects culled organic waste on day one, processes it into fertilizer the next, and makes it available to be run through a farmer’s existing drip lines by the third day.
Once collected and deposited at the processing plant, converting the organic material into fertilizer takes only three hours utilizing a process called aerobic enzymatic digestion.  The process actually emulates the human digestive system (biomimicry).  Organisms that live in the soil consume the same nutrients humans do.  By applying heat, mechanical action, and a cocktail of enzymes similar to those found in human digestion, the slurry of finely ground waste is eventually turned into amino acids, fatty acids and simple sugars that sustain and support life in soil organisms just as these nutrients sustain life in humans.
The CSS composting process is remarkably efficient, recycling 100 percent of the waste taken in.  About 90 percent of the processed product is turned into liquid fertilizer, otherwise known by the brand name Harvest to Harvest, or H2H. The other 10 percent is turned into solids that can be used as feed.
The process is also drought friendly.  No water is added during the composting process.  The product becomes a liquid because of the amount of water already contained in food.  The CSS system simply utilizes the water that is in the food waste.
The efficient collection of food waste is a critical part of the technology.  “CSS’s collection technique preserves the quality of waste.  It’s the guts of what CSS does,” Morash said.
The process captures a lot of the value of the food that can no longer be sold to the public.  In other words, it collects and processes food that is not fit for human consumption, but has not yet reached putrescence (has not rotted).  Once food is putrescent, there is little that can be done with it.  It’s not good for composting either.  It typically ends up as daily cover in landfills, creating methane GHG emissions, among other environmental issues.
Morash explained that the firm’s collection containers have special insulated double walls and are placed in the back of the supermarkets. “It’s a great deal for them,” he said. “It improves store hygiene since the waste is picked up every other day.”  He added, “And the containers are easier for the store employees to use because they are located inside the building and waste does not have to be taken outside to a dumpster.”
Once CSS starts operating on a commercial scale, supermarkets can use empty delivery trucks to backhaul the sealed food waste containers to their distribution centers.  Since CSS’s plants have no emissions, no effluents, no solid waste, and no nuisance odors, the firm expects to easily obtain all necessary licenses and permits to co-locate their processing plants with the supermarket distribution centers.  This will eliminate the cost of long-distance hauling of food waste.  “That’s good from an economic perspective and an environmental footprint perspective,” said Morash.
The same technology can be applied to food processing facilities in agriculture, he said.  Several processors have already asked CSS if they could build a processing plant in Salinas.
According to Morash, using H2H provides other environmental and financial benefits as well.  H2H increases the amount of organic matter in the soil and feeds a diverse list of microbes, making the soil healthier.  Researchers at UC Davis have said plants that grow in healthy soil are more resistant to salt incursion, disease and infestation.
Morash also says using H2H can cut nitrate fertilizer use by as much as 50 percent.  “It’s not that plants need less nitrogen, it’s just that all the activity in the soil stimulates the nitrogen cycle in the soil,” Morash said.  “The plant responds by growing more roots which allow it to take-up more water and more fertilizer, making them more efficient.  As a result, less fertilizer runs off into streams and groundwater.”
The biggest effect has been seen on berries with yield improvements as high as 25-30 percent. (Morash said some studies shower higher increases, but he’s afraid to use them because he said most people won’t believe it.)  He noted that most berries that have been grown in soil treated with H2H showed additional crowning, better production and produced longer into the season.
Why does H2H work so well with berries?  “Berries are like the canary in a coal mine,” he said.  “They respond significantly to either improved or diminished environmental conditions.  When a berry plant is happy, it produces a lot.  When it’s not, it doesn’t produce anything.”

Legislation
Another reason Morash is upbeat about his product is because of some California legislation that has passed recently.  Two new laws were signed by Governor Jerry Brown that will require a significant increase in the recycling of organic materials.  AB 1826 affects large generators of organic waste and goes into effect in April of next year.  AB 1594 will also have a big effect on the food waste market.  As of January 1, 2020, recycled material known as alternative daily cover (ADC) is no longer going to be counted as a recycled product.  (ADC is green waste that has been applied to a landfill to cover up the day’s trash.)
“There is a lot of material that people think is getting recycled as compost, but is instead getting applied as ADC,” he said.  “So suddenly there will be an enormous quantity of organic material that has no place to go, once this law goes into effect.”
Governor Brown also recently signed three other bills into law (AB 876, AB 1045 and AB 1496) that will require food processing facilities and government entities to find better ways to account for and recycle organic material and reduce greenhouse gasses.

“Five Star Sustainably Grown” Certification
CSS is working with a company called SureHarvest on a “Five Star Sustainably Grown” Certification for produce.  It’s modeled after the Lodi Rules label for wines.  This certification program would be competitively priced with conventional produce and supported by the industry.  Essentially the program would inform consumers that producers used a more sustainable process to grow that particular produce, whether they used H2H or not — although H2H users should see increased farm productivity, and score well in the “5 Star” ratings.  The bottom line is produce items could receive this certification as long as they scored well on the sustainability metrics rating system that was put in place.  As currently envisioned, “5 Star” ratings would include scoring in such sustainability categories as: healthy soils; recycled organics; efficient use of resources (such as water, fertilizer and energy); and food safety, using existing metrics as much as possible.
Morash says the idea is to have a website and information for consumers so they can get comfortable with how sustainably their food has been grown, and as a result, they will buy more of it.  “Consumers want to see more information, not less,” he said.  “They will also prefer sustainably grown food to conventional, as long as it does not cost more.  Growers already use many sustainable growing practices, and would benefit by communicating that to consumers.”

The Future, the Thrive Accelerator Program and Western Growers
As the winner of the Sustainability award at the Forbes AgTech Summit in July, Morash is obviously sweet on the Thrive Accelerator effort.  A significant portion of their business has come from growers associated with the accelerator program via word of mouth.  “America is known for innovation and American agriculture has been a leader in innovation.  There are a thousand ideas out there for every one good one and accelerators help separate out the good from bad.”
Morash thinks Western Growers plays an important role in getting information on new technologies out to members.  “That’s part of Western Growers’ mission so it’s logical for them to get involved with us,” he added.
He’s also very appreciative of his mentor Lorri Koster who graciously volunteered to guide CSS through the process.  Koster, the Chairman and CEO of Mann Packing Company, thought it was a good idea to bring new ideas to the Salinas Valley that would result in capital investments and jobs.  “She’s been a supporter of building a plant in Salinas.  The plant will create jobs and help support some of the sustainable agriculture initiatives we have been talking about.  She’s been great to work with and we continue to look ahead to that project and working with some of the big packer shippers in the valley,” Morash said.  Here’s a link to a video they produced for the program:  https://vimeo.com/120824423.
Since winning the award, Morash has also been working with the Silicon Valley Group (SVG), WGs’ strategic partner to continue moving forward.  “It was great to win the award,” he said, “but now we need to follow through and execute on the program.  Western Growers is also very supportive.  Using the Western Growers Center for Innovation and Technology to hold meetings is a great idea and is something that we are intent on following through on when we have the grand opening for a full-scale commercial plant in Salinas.”
Before moving ahead with a Salinas venture, Morash wants to first take care of a special partner.  CSS and Save Mart Supermarkets have a long-term supply contract together.  That is why CSS plans to build their first commercial scale plant in McClellan, CA, near Save Mart’s distribution center in Roseville.  CSS plans to start construction at McClellan by year end.  Morash says they need to take care of them first and once they do, that would then free CSS up to build the plant in Salinas.  Morash commented: “Save Mart was early to see the sustainability advantages in what we proposed, and has always been a leader in the industry.”

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A Look Back…and Ahead Lack of Immigration Reform and Federal Water Legislation Mar Another Year

December 15th, 2015

As Western Growers convened its 90th Annual Meeting in San Diego in November, it once again lamented the lack of progress on immigration reform that has occurred since its previous meeting a year earlier.  And no optimism could be found that the picture will be any different one year hence.
On the other hand, the lack of federal water legislation during this past year was accompanied by a note of optimism, as during the convention there appeared to be movement on the issue…or at least promise of such.  In fact — though unlikely — the comments in this “Water Legislation” section below may be moot by the time this story is published, if the U.S. Senate truly acts in early December as some have indicated.  And there is little Western Growers would like better than for this topic to be heading toward completion when this is being read.  Prudence…and past history…force us to move forward as if this will not be a moot issue as you read this in mid-December.

Immigration Reform
Unfortunately, discussing comprehensives immigration reform is a much less risky topic.  During the review of his year in office, outgoing Chairman Vic Smith opined that there was virtually no chance immigration reform would occur in 2016.  Western Growers Senior Director of Federal Government Affairs Ken Barbic concurs with that assessment.  He noted that 2016 will most likely be a year of building coalitions and jockeying for position for a potential run at immigration reform in 2017 when the United States has a new president and a new Congress.  “The only way it escalates into action in 2016 is if there is some kind of precipitating event,” Barbic said.
He explained that outside events, such as the children at the border crisis in 2014 or the murder in San Francisco of a U.S. citizen by an undocumented person earlier this year, always have the potential of creating a situation where action becomes imminent because of public outcry.  But even in those two headline-creating actions, comprehensive reform still sat on the sidelines.  “It is almost impossible envisioning this getting done during an election year,” Barbic said.
There is just no compelling reason for Democrats and Republicans to come together at this point in time.  Republicans, most notably conservative Republicans, have been singled out as blocking comprehensive reform that would have both border security and path to legalization provisions.  While some Republicans, including the new Speaker of the House Paul Ryan, might see the value of taking this issue off the table for the November presidential elections, there is no reason for Democrats to give in on any of their major points during the election year.  Compromise, which is rarely prevalent in Washington, D.C., won’t find much oxygen at all in 2016.
So what are the prospects in 2017?
Barbic said that largely depends on who wins the White House and the majorities in the Senate and House.  Though many have doubted Donald Trump’s staying power, he continues to enjoy significant support even as the first primaries loom only weeks away.  If he is the Republican nominee and wins, comprehensive reform is off the table for the foreseeable future.  Trump continues to say he will deport any undocumented resident.  While that might be impossible, it is hard to imagine he would pivot 180 degrees on this issue.
If another Republican gets the nomination (Ben Carson, Marco Rubio, Jeb Bush), a clearer case can be made for action on immigration reform.  Bush is clearly for it; Rubio has been for it in the recent past and would probably move toward a center-right position as the nominee of his party, and Carson is a complete unknown, as the famed surgeon has never operated in the political arena.
With Hillary Clinton all but already crowned as the Democrat’s nominee, it is highly likely that she will put achieving immigration reform very high on her “to-do list” as President.  And Republicans might have a very good reason to go along.  If Republicans do not win the White House in 2016, poor performance among Latinos may well be the reason. Barbic said the pragmatic Ryan may well want to rid himself, and the Republican Party, of this issue.
Of course, playing into the calculous will be the makeup of the House and the Senate.  Barring unforeseen circumstances, the House will still be controlled by Republicans, though if Hillary Clinton is elected one would expect the majority to shrink.  The Senate is up for grabs and in any event it will be very close to a 50/50 split.  With nothing close to a filibuster-proof majority, the Senate might well be able to hash out a compromise on immigration reform.  They’ve done it before and could do it again.

Federal Water Legislation
On early Monday morning, Nov. 9, Dennis Nuxoll, vice president of federal government affairs for Western Growers, told the group’s board of directors that California’s congressional delegation must present a united front if the state has any chance of being included in a federal water legislation package for western states.  The concept was on the table for the entire year, and even before that, with lots of talk and not much action.  Nuxoll said there were signs that something might get done by the Senate Water Committee shortly after the Thanksgiving recess.  A day later that seemed even closer to reality as California Senator Dianne Feinstein spoke of the possibility.
On that same day, Nuxoll expressed optimism that the package would move forward, though he still put the odds at only 50/50.  In Washington, D.C., however those are very good odds.
Part of Nuxoll’s optimism was tied to comments Sen. Feinstein made that very afternoon.  Speaking to a reporter, she was quoted as saying: “We hope to have something that can go to markup — I think it’s next Friday (Nov. 20) — and then be included in the omnibus,” she said. “You see, for us, if we don’t catch the early flows of water, we lose them.  So if you get a bill done in the spring, it’s too late to be able to hold the water that we need to hold.”
In a separate interview, Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) confirmed that a markup is in the works for before Thanksgiving recess.  While there are deep differences between the House and Senate version of water legislation, the House passed its measure, and action by the Senate would move this issue to conference, and presumably a compromise.  Sen. Murkowski said that the key to success is creating a region-wide bill.  While California lawmakers have had trouble coming up with a workable compromise, other states in the West have put forth provisions that they can support.
Nuxoll said that has led to the real possibility that if California doesn’t come up with a plan, it will be left out of the solution, with no guarantee a California-only bill will ever pass muster.  Sen. Feinstein appears to understand this dynamic as she said:  “We have worked and worked and worked… but at a certain point you’ve got to put it together and get it done, and we’re at that point.”
Of course, even if the Senate passes federal water legislation, there will be significant differences between the House and Senate bill.  The House bill that passed (HR 2898) was very much supported by California agricultural interests.  It basically shifts some water resources from protecting the environment to use by agriculture.  It does so by modifying the Endangered Species Act and other environmental laws during period of water shortage.
The Senate bill is still being debated, but the California portion focuses more attention on using federal dollars for recycling, conservation efforts, desalination and storm water capture.  Both bills, however, are expected to include some funds and provisions for expediting environmental studies for new storage facilities.
Nuxoll said the key is to get a bill out of committee and passed on the Senate floor so the work in conference can begin.  While it is important to get this passed as quickly as possible so another year does not go by without action, it is also important to do so for fear that the predicted impact of the looming El Niño doesn’t stall progress.  What has made this bill palatable at the present time is the extended drought.  California’s four years of historic drought conditions has received lots of press but other western states are also in very dry conditions.  The Pacific Northwest has been in drought for several years and the Colorado River states have been suffering with below normal rain for 14 of the last 17 years.
Attention spans are short and the public agreement for action could evaporate if the El Niño creates well-above average precipitation and flooding accompanies it.
“This is the perfect time for action and I am cautiously optimistic that it is going to happen,” said Nuxoll.

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New Rules for Piece-Rate Employees and Limited Safe Harbor

December 15th, 2015

On October 10, 2015, Governor Jerry Brown signed into law AB 1513, which adds a new section to the Labor Code and codifies recent California state appellate court and federal district court decisions ruling that piece-rate employees must be separately paid for their nonproductive time and rest periods, in addition to their piece-rate earnings.  The new law also provides a limited safe harbor for qualified employers that voluntarily make retroactive payments to piece-rate employees for uncompensated nonproductive time and rest periods.  AB 1513 will go into effect on January 1, 2016.

Courts Redefine Piece-Rate Rules
In 2005, the California Court of Appeal decided Armenta v. Osmose.  In Armenta, the employees installed and maintained utility poles.  The company paid the workers for time spent actually working on utility poles (“productive time”) and didn’t pay for time spent during all other activities (“nonproductive time”).  The employees filed a class action lawsuit alleging that the employer failed to pay them the minimum wage for their nonproductive hours.  The employer claimed that the plaintiffs had been paid at least the minimum wage because under then-prevailing federal law, an employer could use a simple average to determine if the employer had satisfied the minimum wage.  In other words, it had been understood that under California law, if total compensation divided by total hours was greater than the minimum wage (accounting for overtime), minimum wage requirements had been met.  The Armenta court held that California’s minimum wage statute required that the minimum wage must be paid each and every hour an employee works.  Dividing total compensation by total hours to determine if the minimum wage had been satisfied (i.e., “averaging”), was held impermissible under California law. Notably, Armenta did not involve piece-rate employees.
In March 2013, the California Court of Appeal applied the reasoning of Armenta and ruled in Gonzalez v. Downtown LA Motors that auto mechanics paid on a piece-rate basis were required to be paid at least the minimum wage for hours spent waiting to perform car repairs.  In its ruling, the Court of Appeal noted that California law requires that employees be paid “not less than the applicable minimum wage for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise” (emphasis added).
Two months later, the Court of Appeal ruled that truck drivers paid on a piece rate had to be separately compensated at the minimum wage or the contracted hourly rate for their two 10-minute rest periods under a piece-rate system.  These cases stood for the proposition that employers can no longer show that the required minimum wage has been paid by averaging the total compensation over the total number of hours worked in the pay period as permitted by the Fair Labor Standards Act (FLSA).  The California Supreme Court denied review in both cases.
This shift in the historic understanding of how piece-rate workers are to be compensated was soon adopted by several federal district courts.  For example, in Con-Way Freight v. Quezada, the court held that truck drivers who were paid a piece-rate based on a pre-set mileage rate and who were also paid on an hourly rate for work performed such as loading and unloading had not been paid any wages for certain non-driving tasks, such as vehicle inspections and waiting time at each stop.  According to the employer, this time spent on “nonproductive” activities was properly included in the piece-rate compensation system.  As in the Downtown LA Motors case, the court ruled that California law required that this non-driving time be paid at a separate hourly rate, equal to at least the minimum wage.
Even before Bluford and Downtown L.A. Motors, minimum wage cases relying on Armenta were popping up against employers who pay by the piece.  But once the California Supreme Court declined to consider these cases for review, they became the law of the land in California.  Predictably, the flood gates opened and during the intervening years dozens of class action lawsuits have been filed against California agricultural employers — and other industries — for uncompensated non-productive time and rest periods, with new cases still being filed on a regular basis.  Since these court decisions purported to interpret existing law, every employer of piece-rate employees is vulnerable to being named in a class action lawsuit to which there is no defense.
These class action lawsuits are devastating not only because the employer must pay back wages to all affected current and former employees going back three to four years, they must also pay civil and statutory penalties, liquidated damages, attorneys’ fees (both their own and class counsel’s) and costs, all of which increases the potential exposure to sums exponentially greater than the underlying wage claim.

Changes Implemented by AB 1513

Nonproductive Time
AB 1513 adds section 226.2 to the state Labor Code which requires (after January 1, 2016) that piece-rate employees be separately compensated for “other nonproductive time” at an hourly rate no less than the applicable minimum wage.  This essentially codifies the holding of Downtown LA Motors.  Section 226.2 defines “other nonproductive time” to mean “time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.”  While this definition lends some clarity as to what constitutes “other nonproductive time”, some ambiguity remains.  Calisthenics and tail gate meetings, for example, clearly count as other non-productive time, activities which must be separately compensated.  But the harvest machine turning at the end of the row is directly related to the activity being compensated on a piece-rate basis, according to sources who negotiated the bill, and is compensated with piece-rate earnings.  An employer that pays an hourly rate of at least the applicable minimum wage for all hours worked plus a piece-rate production bonus is deemed to be in compliance with the law and is not required to track or separately pay other nonproductive time (but is required to separately pay rest and recovery periods at the regular hourly rate of pay).

Rest and Recovery Periods
New section 226.2 requires that piece-rate employees be separately paid for rest and recovery periods at “a regular hourly rate that is no less than the higher of an average hourly rate determined by dividing the total compensation for the workweek, exclusive of compensation for rest and recovery periods and any premium compensation for overtime, by the total hours worked during the workweek, exclusive of rest and recovery periods, or the applicable minimum wage.”  This rate of pay is higher than that announced in Bluford, which required rest periods to be paid at the higher of the minimum wage or contracted hourly rate.  However, the rate is lower than the Labor Commissioner’s interpretation that rest periods must be paid at the average piece-rate, because the average hourly rate includes payments for other nonproductive time paid at the minimum wage.  This rate covers rest breaks under Industrial Welfare Commission Wage Order 14-2001 and cool down breaks under the Cal/OSHA heat illness prevention regulation (CCR Title 8, Section 3395).
New section 226.2 also has new paystub requirements for piece-rate employees. In addition to the nine different categories of information that must be included on all wage statements as enumerated in section 226(a) of the Labor Code, piece-rate employees’ itemized statements must now separately state:
•    the total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for those periods during the pay period; and
•    the total hours of other nonproductive time, the rate of compensation, and the gross wages paid for that time during the pay period.

Limited Safe Harbor
The Downtown LA Motors and Bluford decisions have created enormous exposure to back pay and penalty liability to employers of piece-rate employers.  AB 1513 offers some relief for employers who have been sued or face probable liability for uncompensated nonproductive time and rest periods.
Provided the employer satisfies all of the stated requirements by December 15, 2016, it may assert an affirmative defense to all liability, including back wages and penalties, for failure to compensate for rest and recovery periods and other nonproductive time.  However, plaintiffs’ attorneys that filed an action prior to October 1, 2015 may request attorneys’ fees and costs from the court . To take advantage of the safe harbor, the employer must:
•    Make retroactive payments to all current and former employees for the amount of break and other non-productive time not separately compensated (as now required by the statute) during the period July 1, 2012 through December 31, 2015.  The statute gives the employer two options as to how to calculate these payments:
•    Pay the actual amount of wages due for uncompensated break and nonproductive time, plus interest; or
•    Pay four percent (4%) of the employee’s gross earnings during that period. If the employer has previously tried to come into compliance with Gonzalez and Bluford by compensating employees for nonproductive and/or break time, the employer will get a credit for those payments (with a cap of 25% of the amount due for other nonproductive time and no limit for rest and recovery.)
•    The employer must make a good faith effort to locate former employees and provide payments to each one who would qualify, or for employees who can’t be located, to the Labor Commissioner.
•    The employer must provide written notice to the Department of Industrial Relations by July 1, 2016 of its intention to make retroactive payments.
Provided all requirements are satisfied, the employer can assert the affirmative defense in any claim or action filed on or after March 1, 2014, unless judgment has already been entered and the time for appeal expired by the end of 2015.  The affirmative defense will defeat any claim against the employer for failure to timely pay the employee separately for rest and recovery periods and other nonproductive time through December 31, 2015.  After December 31, 2015, all employers must separately pay for other nonproductive time and rest and recovery periods as set forth in new section 226.2 of the Labor Code.
Western Growers members that pay employees on a piece-rate basis should be prepared to modify their payroll systems to comply with AB 1513’s compensation and wage statement requirements.  Qualified employers should consult with employment law counsel to determine if they may be able to take advantage of the safe harbor and enjoy relief from liability in current or probable class action litigation.

How to Calculate Employee Payments Using the 4% Formula

Step One:    Determine by employee the gross wages earned after July 1, 2012, for each pay period in which the employee worked for any time at a piece-rate. Do not include pay periods where all compensation for the pay period was at a fixed hourly rate.

Step Two:    Multiply that number by 4% to determine the amount due.

Step Three:    Subtract what was actually paid in the pay period for rest and recovery (R&R) and other nonproductive time (NPT).

Example for One Pay Period:

The employee’s gross earnings were $800.00.  $20.00 was previously paid for rest and recovery periods (calculated at $10.00 per hour for two hours of rest-period time).  $8.00 was already paid for other nonproductive time (capped at 1% of the employee’s gross earnings or 25% of amount due).

Gross Earnings    $800.00
Multiplied by 4%    $32.00

Paid R&R    $20.00
Paid NPT    $8.00

Employer pays: 4% – (Paid R&R + NPT) = $32 – $28 = $4.00 Due Employee

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State of the Association

December 15th, 2015

As the year draws to a close, it is an important exercise to step back and reflect on the direction of the association and to answer for our members the most fundamental question: “Why do we do what we do?”
If you are not already aware, the Western Growers organizational model is dramatically different from anything you will find in the industry or even among trade associations generally.  Not only do we provide traditional trade association services ranging from political and legislative advocacy to education and training, we also offer many value-added products and services designed to enhance the competitiveness and profitability of our members.  Over the decades, we have evolved from a single-issue organization into a powerful advocate on dozens of public policy issues at both the state and federal levels; the nation’s largest provider of health benefits to the agricultural industry; a full-service broker of health, commercial and personal lines of insurance; a respected third party health benefits administrator for self-funded employers; and a growing pharmacy benefits manager, among many other industry-specific services offered to our members.
Some may question why Western Growers is involved in so many different business ventures, implying we should stick to our “core competency” of being a trade association.  My answer to them is quite simple: The culture of Western Growers mirrors the character of our members and the industry.  Our members are adaptable; their businesses change over time, even while they maintain their fundamental values.  They are the hardest-working and boldest entrepreneurs in the country.  Period.
Our members are highly competitive, constantly striving for greater efficiencies.  They seek, and often create, innovative solutions to the immediate and impending challenges facing their operations.  And our members are conscientious stewards of the land and the people who work it, driven toward the goal of sustaining their businesses for future generations.
In the same way, Western Growers operates with the singular focus of ensuring the long-term viability of our members.  Before any business decision is made, before any energy or financial resources are spent, we ask ourselves, “Does this honor the trust our members have placed in us?  Are we faithfully serving the interests of our members to the best of our abilities?”  Above all, we touch back to Western Growers’ mission statement: To enhance the competitiveness and profitability of our members.
To answer these questions in the affirmative, it requires that we operate less like a traditional trade association and more like one of the cutting-edge companies we represent.  It requires that we not only understand and respond to the needs of our members today, but that we anticipate and prepare for the threats they will face tomorrow.  Sometimes, the solution to these problems present business opportunities, as they did nearly 10 years ago when we began the Western Growers Transportation Program.
In responding to growing uncertainty in moving our members’ products to market, we developed a strategic shipper-based program that offers a turnkey transportation solution that enhances service levels and equipment availability for our membership while also supporting Western Growers.  Our partnership with C.H. Robinson has been so successful that other agricultural associations across the country now use the program, as well.  The money derived from all of our for-profit entities is then reinvested in the activities of the association.  This money allows us to provide more and better products and services at lower (or free) prices to our members.  This money allows us to hire the most talented professionals, and more of them, to work on the many public policy and political challenges confronting our industry.  Keep in mind, this is money that would otherwise be spent outside of agriculture on companies where the profits go to enrich shareholders.
Did you know that we haven’t raised member dues in more than a decade?  In fact, we have the lowest dues of any state or national fresh produce association to which our members may belong.  And did you know that last year, member dues represented just 2 percent of the revenues generated by Western Growers and its consolidated entities?  Rather than growing our organization on the backs of our members, we have developed a business model that allows us to help our members become more profitable while generating the resources necessary for us to continue fighting the fight on behalf of the industry.
We do all of this so that we can help you be more competitive and profitable, today and in the future.  We need to continue to build an organization that is strong enough to stand on its own, while flexible enough to bend with the changing political and economic landscape.  Our success in these endeavors will continue to enhance our effectiveness as we stand alongside our members and help them preserve and grow their businesses for generations to come.

 

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Cox Elected WG Chairman; Gray Receives Award of Honor

December 15th, 2015

Larry Cox of Lawrence Cox Ranches, Brawley, CA, was elected chairman of the board of Western Growers at its Annual Meeting in San Diego in November.
Cox, who served as senior vice chair this year, took the traditional path of rising through the officer slots to his current position.  Serving as his senior vice chair for the 2015/16 year is Sammy Duda of Duda Farm Fresh Foods Inc.  Craig Reade of Bonipak Produce Company was elected to the vice chair role.  Carol Chandler of Chandler Farms is treasurer while Garland Reiter of Reiter Affiliated Companies is the executive secretary.
The 90th Annual Meeting of Western Growers also featured a former chairman of the board receiving the prestigious Award of Honor from the association.  Robert P. Gray, who is currently the president of the California Agricultural Leadership Foundation and has had a long and impressive career in production agriculture, was so honored.  The award was presented by longtime WG Board Member Stephen Patricio of Westside Produce who noted Gray’s outsized intellect and dedicated service to the industry.  For many of his years, he was employed by Duda Farm Fresh Foods, serving as CEO of that company for a handful of years.  He owns the record for longest service on the Western Growers Executive Committee and was the first non-company owner to be chairman of the association.
With Gray’s turn at the podium, he gave the audience a sample of the road he did not travel when he pursued a career in agriculture.  His earlier goal was to be a college professor with literature being his field of study.  During his speech he analyzed the four stanzas of Robert Frost’s famous “The Road Not Taken” poem.  Gray noted that while he took the road less traveled as the poem describes, it was not done with aforethought of where it would lead, but it proved to be the right path and one he is very grateful to have traversed.

 

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THIS THURSDAY — AB 1513 Piece-Rate Compensation and Safe Harbor Seminar

December 15th, 2015

The California Department of Industrial Relations has now posted information about AB 1513 including a Fact Sheet, FAQs, and a PowerPoint presentation. Also, the Piece-Rate Back Pay Election Form and List of Employers who have submitted a Notice of Election to Make Back Payments is now available.

To help members better understand the implications of this legislation and what it could mean for their businesses, Western Growers is holding two seminars in the Central Valley THIS WEEK. Join Jason Resnick, Vice President & General Counsel for Western Growers, as he breaks down the law.  Jason will cover the following topics and will also take questions from attendees:

  • Implications to employers and how to take advantage of the limited safe harbor through this new law
  • New requirements for paying and tracking nonproductive time and rest and recovery periods
  • How to minimize liability, increase compliance and avoid penalties

SEMINAR DETAILS

Selma Event:

Thursday, December 17, 2015

7:30am to 9:30am

Spike & Rail Steakhouse, 2910 Pea Soup Anderson Blvd., Selma, CA 93662

Selma Details

 

Bakersfield Event:

Thursday, December 17, 2015

12:00pm to 2:00pm

The Padre Hotel (Stampede Room), 1702 18th St., Bakersfield, CA 93301

Bakersfield Details

 

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

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Personnel Transport Carrier Regulation Goes Into Effect

December 15th, 2015

A regulation approving the limited use of agricultural personnel transport carriers (PTCs) in California goes into effect January 1, 2016. General Industry Safety Orders §3441 has been amended at new subdivision (i) to create an exception for PTC use under certain circumstances.

Here is a brief summary of the new regulation:

  • Use of PTCs would be limited to employees installing, removing or maintaining irrigation pipe for low-lying row crops. No other employees are allowed to board or ride on PTCs.
  • Employees may ride in PTCs only in the furrowed area of fields while performing irrigation activities.
  • The slope of the fields where employees ride on a PTC may not exceed a 5% grade.
  • PTCs built prior to January 1, 2016, must be inspected and approved by a qualified person for structural integrity and design prior to the units being placed into service.
  • PTCs must be equipped with: 1) approved seat belts and seat cushions; 2) steps and handholds so that employees can maintain three-point contact while entering and exiting the platform; 3) a door, gate or safety chain at passenger entry/exit points. Additionally, PTCs must be equipped with an “effective and reliable” means by which passengers can communicate with the tractor operator.
  • PTCs must be constructed of steel strong enough to support anticipated loads.
  • Speed is limited to five miles per hour. Employees must exit the carrier whenever the tractor reaches the end of the row, and may reenter only after the tractor completes the turn.  Passengers are not be permitted to ride on the PTC when it is within 10 feet of a ditch, canal, retention pond, or other location that presents an overturn hazard.
  • Safety training for all employees using PTCs, including tractor operators, is required before the initial use and at least annually thereafter.

PTCs have been used for about two decades to transport workers in operations involving the installation and removal of irrigation piping, but their legality had been placed in doubt by the Division of Occupational Safety and Health (DOSH or Cal-OSHA) since 2012. In response to a consolidated petition requesting that the Board develop general safety standards related to the use of PTCs, the Standards Board convened an advisory committee last May consisting of stakeholders, including Western Growers staff, to discuss a draft proposal. The regulation now brings PTCs into the specter of compliance provided that all requirements for use are met.

For additional information or questions, please contact Jason Resnick at
(949) 885-2253.

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Tips to Protect Your Home and Property During the Holidays

December 17th, 2015

In the excitement and high activity of the holiday season, we sometimes overlook the need to be vigilant and take care of our personal items. 

Allstate Insurance indicates that burglaries increase by 11 percent during the holidays and items stolen from vehicles increase by 17 percent. When we are out buying presents and materials for our holiday parties we sometimes forget that these items are visible; this may attract more attention than we want and can result in a break-in or theft from our home or our vehicles.

Christmas trees that are near doors or windows present too much of a temptation for thieves when they can readily see presents or gifts under the tree. The same can be said of gifts or items left in plain sight in cars while in parking lots. Covering the gifts with a blanket or keeping them out of sight until they are just about to be opened can help to avoid a Christmas “surprise” when you return home or to your car.

In the past few years, online shopping has increased significantly with many shoppers doing a good portion of their shopping from their homes or offices. Having the packages delivered to your home saves a lot of time and effort, but also has increased the opportunities for thieves who steal the packages which are left on the buyer doorsteps. Shipping your purchases to your office or place of work can avoid these potential thefts. 

Burglars are also adept at social media and can identify potential targets by surfing social websites to discover when you are traveling during the holidays. Many of us often post our travel schedules and vacations on Facebook, Twitter and LinkedIn, unaware that it tips off thieves about extended absences and can provide them with information about the ideal time to break into our homes. Limiting this information online can help prevent this from occurring.

Other actions to avoid losses during the holidays include the following:

  • Using only one credit card for online purchases.
  • Being alert when using your cellphone for talking or texting.
  • Shopping with another person to be more secure or to provide extra help in carrying packages.
  • Checking your surroundings around your car.
  • Being especially careful while driving in busy parking lots, especially when backing out of parking spots. 

The holidays can be thoroughly enjoyable and with a few simple steps you can avoid an experience that will put a “downer” on the holiday season. For assistance with other safety or security issues or help with the right kind of insurance to protect your assets, contact Greg Nelson, Vice President of Western Growers Insurance Services, at (949) 885-2287.

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Labor Agency Issues Guidance on New Piece-Rate Law

December 22nd, 2015

The Department of Industrial Relations has posted on its website several new resources to help employers comply with the New Piece-Rate Legislation (AB 1513). 

This administration-sponsored law does two things:

  • Going forward, it establishes pay requirements for mandated rest and recovery breaks and other nonproductive time, including related wage stub requirements.
  • Looking backward, it provides a short window of time for employers to make back wage payments to workers for previously uncompensated or undercompensated rest and recovery periods and other nonproductive time in exchange for relief from statutory penalties and other damages.

The website includes the following items:

Also check out Western Growers’ newest member resource: How to Prepare for California’s New Piece-Rate Compensation Rules (AB 1513).

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

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Have a Safe Holiday Season

December 8th, 2015

This is the time of year when more time and effort goes into celebration and revelry than any other season.  The festive spirit leads to decorations and parties in the office while everyone enjoys the holiday scene.  Employees need to be especially vigilant at this time of year because there is more potential for accidents and injuries due to the presence of alcohol and food at many of the holiday gatherings.  A few simple reminders can help employees avoid problems while maximizing their enjoyment of the holidays:

Driving – practice “safe” driving. 

  • Don’t drink and drive.
  • Be very careful while driving in inclement weather.
  • Avoid using cell phones for texting or talking while driving.

Decorating – be careful with holiday decorations. 

  • Don’t use chairs to attach decorations to walls or ceilings. Instead get a sturdy ladder.
  • Use fire retardant or artificial trees.
  • Don’t overload electrical circuits with lights.

For more information, please contact Greg Nelson at (949) 885-2287.

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WTO Allows Retaliatory Tariffs on US Imports to Mexico and Canada

December 9th, 2015

The World Trade Organization (WTO) has upheld its previous decision to rule against the U.S. and the October 20, 2014 Panel Report, citing that U.S. Country of Origin Labeling (COOL) regulations that apply to imported meat discriminate against Canada and Mexico. This is the third time the WTO has rejected the modified U.S. regulations stating it discriminated against Canada and Mexico creating a technical barrier to trade. In declining the U.S.’s appeal, the WTO decision will now enable Canada and Mexico to apply retaliatory tariffs. The retaliatory tariffs (Canada $780 million and Mexico $228 million) could apply to a wide range of commodities, including vegetables, fruit and tree nuts unless the U.S. repeals COOL requirements for meat.

An official list of tariffed commodities has not been released as of yet. Stay tuned to Spotlight for an update to this story once the official list has been released.

For more information, contact Ken Gilliland at (949) 885-2267.    

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U.S. House of Representatives Passes Variety of Tax Provisions

December 17th, 2015

Today, the U.S. House of Representatives passed legislation to extend or make permanent several tax provisions. The legislation will be considered by the Senate tomorrow. Western Growers has been engaged on several of the items included in this package and applauds Congress for providing greater tax certainty through this legislation.

The legislation will make Section 179 permanent at the $500,000 level. Under the provision, once equipment purchases total $2 million the allowed Section 179 amount will start to phase out dollar-for-dollar and no additional amount will be allowed after $2.5 million. Additionally, the $500,000 and $2 million amounts will be indexed for inflation starting in 2016. The current amounts in place are an expense limitation of $25,000 and a phase out of $200,000, but under this legislation those amounts will be permanently elevated to the 2010-2014 levels.

Bonus depreciation has been extended but modified through 2019. For property placed in service from 2015 through 2017, the bonus depreciation is 50 percent, but it phases down to 40 percent in 2018 and 30 percent in 2019. One key provision for Western Growers members is that bonus depreciation will now permit certain vines, trees, and plants bearing fruit or nuts to qualify for bonus depreciation when planted or grafted rather than when they are placed into service.  

The legislation permanently extends the charitable deduction for contributions of real property intended for conservation purposes, including the enhanced deduction for certain individual and corporate farmers. Tax credits for the building of solar energy production facilities have been extended, with the credit remaining at 30 percent through 2019 and thereafter going to 26 percent in 2020, 22 percent in 2021, 10 percent in 2022 and then to zero after 2022.

The tax legislation would also allow for charitable contributions to agricultural research organizations to become tax deductible. This is a concept Western Growers has supported for several years and has been championed by Rep. Devin Nunes (R-CA) as well as Senator Debbie Stabenow (D-MI).

For additional details please refer to the section-by-section summary of the legislation. Please contact Western Growers Senior Director of Federal Government Affairs Ken Barbic at (202) 296-0191 for more information. 

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Lunch & Learn: How Can Technology Assist with Affordable Housing for Farmworkers?

December 8th, 2015

This month’s Lunch and Learn Webinar on Wednesday, December 16, will highlight technological advancements that have the potential to offer affordable net zero energy homes for farmworkers. Jason Resnick, Western Growers’ vice president and general counsel, will provide an overview of the current housing requirements for farmworkers under H-2A visas. He will also share the challenges and possible solutions associated with these requirements.

Dr. Frank Loge, the faculty lead on UC Davis’ entry to the U.S. Department of Energy’s Solar Decathlon 2015, will discuss his team’s affordable, net zero energy home design that could be replicated at low cost and offer a potential solution to meet current housing requirements. During the webinar, Dr. Loge will walk participants through the technologies and systems embedded in UC Davis’ fully operational solar power house that has the potential. This webinar is hosted by Western Growers Legal Services and Western Growers Science & Technology.

Webinar Details

How Can Technology Assist with Affordable Housing for Farmworkers?

Wednesday, December 16

11:30 a.m. PDT

REGISTER NOW!

Speaker Details

Jason Resnick, Vice President & General Counsel, Western Growers

Dr. Frank Loge, Professor, University of California, Davis

 

For more information, contact Sonia Salas at (949) 885-2251.

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Merry Christmas from Western Growers

December 22nd, 2015

Western Growers offices will be closed on Thursday, December 24 and Friday, December 25 in recognition of the holiday.

We wish you and your family a very Merry Christmas! 

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Western Growers Center for Innovation & Technology Celebrates Grand Opening

December 9th, 2015

Today Western Growers celebrated the grand opening of its Center for Innovation and Technology (WGCIT) in Salinas, Calif. The new technology incubator aims to bring innovative entrepreneurs together with farmers to develop creative solutions to the biggest challenges facing agriculture.

The event kicked off with remarks from Tom Nassif, Western Growers President and CEO; Bruce Taylor, Chairman and CEO of Taylor Farms [Salinas, Calif.]; Vic Smith, President and CEO of JVSmith Companies [Yuma, Ariz.]; and Larry Cox, owner of Lawrence Cox Ranches [Brawley, Calif.]. Several hundred attendees enjoyed a myriad of grand opening festivities including a captivating high-tech laser light show, networking opportunities and tours of the WGCIT and Taylor Farms headquarters.

The new 2,800-square-foot facility will house up to 34 startup technology companies, providing tenants with access to top-of-the-line amenities, facilities and services. During the event, representatives from most of the startup companies currently housed in the center—California Safe Soil, GeoVisual Analytics, HeavyConnect, iFoodDecisionSciences, Concentric Power and Inteligistics—had the opportunity to speak with attendees and showcase their technologies. 

The work of these start-up companies will be supported by a host of sponsors currently providing financial support to the WGCIT, including Bayer CropSciences, Farm Credit, JVSmith Companies, Monsanto, Prophet North America, Taylor Farms and Toro Micro-Irrigation.

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WG Staff Thanks Arizona Key Influencers with Farm Fresh Holiday Baskets

December 17th, 2015

This week, Western Growers staff presented holiday gift baskets to the Speaker of the House David Gowan, Senate President Andy Biggs and Arizona Department of Agriculture Director Mark Killian to thank them for their generous support of the Arizona’s fresh produce industry. Each basket was filled with delicious, Arizona grown produce.

(Pictured above is Arizona Government Affairs Manager AnnaMarie Knorr with Speaker of the House David Gowan.)

For more information, contact AnnaMarie Knorr at (602) 451-0658.

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World Agri-Tech Summit to Discuss Sustainable Agricultural Technology

December 22nd, 2015

Western Growers invites you to attend the World Agri-Tech Investment Summit in San Francisco on March 16-17, 2016. The summit will bring together agribusiness leaders, agtech innovation drivers, venture capital investors and technology developers from around the world to discuss the future of agriculture and develop ideas to achieve transformational change in the industry.

The event, which is part of the annual World Agri-Tech Investment Series, will focus on fostering interactive debate, generating networking opportunities and showcasing the latest technologies amongst the brightest minds in agtech today. Western Growers is a proud partner of the World Agri-Tech Investment Series.

You can view the summit’s agenda here. Speakers include the following: 

  • David Fischhoff, Chief Scientist, CLIMATE CORPORATION, USA
  • James Blome, President & CEO, BAYER CROPSCIENCE, USA
  • Robert Fraley, CTO, MONSANTO, USA
  • Matt Waits, CEO, SST SOFTWARE, USA
  • Federico Trucco, CEO, BIOCERES, ARGENTINA
  • Robert Berendes, Co-Owner and Partner, A-CONNECT, SWITZERLAND
  • Steve Webb, New Technology Leader, DOW AGROSCIENCES, USA
  • Tom Laurita, CEO, NEW LEAF SYMBIOTICS, USA
  • Pat Christie, CEO, CONSERVIS, USA
  • Damien Lepoutre, President, GEOSYS, USA
  • Jeff Keiser, Vice President, ITERIS, USA 

All Western Growers members save $300 off registration. Please quote WGA16 when booking. To register, visit: http://www.worldagritechusa.com/.

For more information, please contact [email protected]. 

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HR 102: Labor and Employment Laws for Agriculture

December 10th, 2015

Scott Wilson, an employment law attorney, will provide an overview of the California and Federal labor and employment laws affecting agriculture, including wage and hour, harassment and discrimination, farm labor contractor regulation, union organizing and mandatory leaves of absence on Tuesday.

LOCATION

San Diego County Farm Bureau
1670 E Valley Pkwy, Escondido, CA 92027

DATE & TIME

Tuesday, December 15, 2015
9:00 AM – 3:00 PM with lunch provided from 12:00-12:30 PM.

COST

$150/person for members of APMA and co-sponsoring organizations; $195/person for non-members.  Cost of this class is included in full HRPA program registration. 

REGISTER NOW!

 

For more information, please view the event flier.

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Congress Expected to Take Up Spending Package Tomorrow

December 17th, 2015

Early yesterday morning, the House and Senate Appropriations Committees filed a $1.15 trillion Omnibus spending bill for the remaining ten months of FY 2016 ending September 30, 2016. 

The bill includes funding for the 12 annual appropriations bills and reflects the increased domestic discretionary funding provided by the Bipartisan Budget Act of 2015, enacted on November 2.

The House is expected to take up the legislation on tomorrow morning and the Senate is expected to vote on the combined package tomorrow evening — before the December 22 deadline when the short–term government funding resolution expires.

For a summary of select sections of the omnibus of interest to WG members, CLICK HERE.  

For more information, contact Dennis Nuxoll at (202) 296-0191.  

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New H-2A Wage Rates in Effect TODAY

December 22nd, 2015

Today, December 22, 2015, the Employment and Training Administration (ETA) of the Department of Labor (Department) issued its Federal Register Notice to announce the 2016 Adverse Effect Wage Rates (AEWRs). The notice applies to the employment of temporary or seasonal nonimmigrant foreign workers (H–2A workers) to perform agricultural labor or services.

AEWRs are the minimum wage rates the Department has determined must be offered and paid by employers to H–2A workers and workers in corresponding employment for a particular occupation and area so that the wages of similarly employed U.S. workers will not be adversely affected. In its Notice, the Department has announced the annual update of the AEWRs is effective today. This means that employers currently under an H-2A contract will have to immediately revise the minimum wage rates loaded into their payroll systems for workers now in the field.

The Arizona AEWR has increased from $10.54 to $11.20 per hour. California’s AEWR has increased from $11.33 to $11.89 per hour. Colorado and Nevada both enjoy a slight dip in the AEWR, from $11.37 to $11.27 per hour.

Despite repeated demands by Western Growers and the H-2A user community for ETA to give some reasonable advanced notice of the change in AEWRs, the Department has again, as it has done in recent years, published its annual AEWR changes without giving any advance notice. This places a great hardship on H-2A users who are in the middle of the busy harvest system to learn of the Notice and adjust their payrolls accordingly. ETA has steadfastly refused to provide reasonable notice of AEWR changes.

Since 2005, Western Growers has provided members with H-2A application processing and recruiting services. If you would like more information about Western Growers Labor Services or the H-2A program in general, please contact Jason Resnick, vice president and general counsel.

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