NEW FEDERAL WATER LAW: ‘Maximizing Water Supply’ Key Provision of Legislation

January 18th, 2017

After a seemingly interminable length of time, in December of 2016, Congress passed and President Obama signed new federal water legislation that has already had an impact on water supplies in the state of California.

While it is not a panacea and much work still needs to be done to better manage the water supplies in California and the West, the legislation requires managers of government-controlled water to “maximize water supply” for the benefit of the population.

Western Growers CEO and President Tom Nassif immediately applauded the work of all involved in passing the Water Infrastructure Improvements for the Nation Act (WIIN).  “Even though it has taken us a while to get to this point, we are pleased that Congress has finally passed, and the president has signed into law, legislation that provides a measure of drought relief to rural communities and urban residents throughout California.  Thanks to three years of hard work and dedication by Senator Feinstein, House Majority Leader McCarthy, and our champions in the House, including Congressmen Calvert, Costa, Denham, Nunes and Valadao, we can now begin bringing aid to the thousands of businesses and millions of lives that have been devastated by a combination of Mother Nature and broken policies governing California’s water system.”

He continued: “We urge all stakeholders to recognize that the language in this law is the product of bipartisan, bicameral negotiations that provide temporary improvements to the operations of the Delta pumping plants while maintaining the integrity of the Endangered Species Act.  With California’s winter rainy season already upon us, it critical that we not prevent the reasonable diversion of all available runoff to storage.  Finally, we encourage Congress to continue working together—and with the new administration—during the next session to complete negotiations around longer-term, more permanent solutions to California’s water crisis.”

Nassif’s comments about capturing runoff for storage, in a nutshell, is the crux of the new legislation.  Dennis Nuxoll, Western Growers vice president of federal government affairs, who has been closely involved in this issue for the past three years, said the bill has two major components: it impacts how water supply is managed and it’s also an appropriations bill that authorizes spending on water infrastructure.  Immediately and practically speaking, it does direct government agency water managers to simply and proactively pump more water from Northern California, where it tends to originate, to the farms and cities of the San Joaquin Valley and Southern California.  “It legislates operational changes,” said Nuxoll.  “It directs agencies to pump more aggressively.”

He said that in times of rain and excess snow melt, agencies are required to maximize water supply.  That has not been the practice in the recent past.  In fact, last year, after many years of drought, California had a very wet start to its rainy season.  Instead of capturing high river flows and increasing the pumping of water through the Sacramento-San Joaquin Delta to the more arid south, much of that early rainfall went right through the Delta and out to sea.

It is this topic that gets Johnny Amaral, deputy general manager of external affairs of the Westlands Water District, hot under the collar.  He flatly states that California “does not have a water supply problem.”  Instead he argues that the supply that the state does have is “horribly mismanaged” and points to the millions of acre feet of water gone out to sea last year as exhibit one.  Though one might think that the lessons of last year were learned, he noted that the same issue has been repeating itself this season.  Lake Shasta, he noted, has been well above normal capacity throughout the summer and fall.  That extra water, he said, could have been pumped south and stored, making room for the heavy rains that came early in the 2016/17 water year.  Instead, water managers held that water back and did not increase activity at the pumping stations.  Consequently, Shasta as well as Folsom, required flood level releases in mid-December, again losing water that could have been saved.  “It makes zero sense,” he argued.

But Amaral said this legislation does create a bit of light at the end of tunnel.  Speaking to Western Grower & Shipper on Monday, Dec. 19, he noted that the new law was signed by President Obama on Friday, Dec. 16, and already pumping had been increased.  The Westlands executive fully expects the water managers in charge to follow the letter of the law and maximize water supplies through increased deliveries.  In fact, he noted that once the bill was signed, a notice from the Bureau of Reclamation was sent to its employees informing them of the new law and new requirements.

Amaral cautioned, however, against taking a quick snapshot of pumping activity and drawing a conclusion.  “What has happened since the law was signed is promising.  But I plan to take a look at this (pumping) in 30-day windows and see if there has been a determinable difference in two-, three- and four-week periods.”

He said for the last eight years, the bureaucrats in charge have looked at water supply in a totally different way than he expects will occur under a Donald Trump Administration.  “There will be a host of new people at the Bureau (of Reclamation) implementing this law.”  He said the language of the law is very important, but it also will help to have more friendly bureaucrats making the interpretations.

Under the new law, the language calls for maximizing water supply unless scientific proof exists that the increased pumping is, in fact, harming endangered species.  The language in the law appears to shift the burden of proof, allowing for increased water flow unless it can be scientifically proven that harm is occurring.  In the past, the burden appeared to go in the other direction.  Increased water flow was presumed guilty until proven innocent…virtually an impossible task.

Nuxoll said the bill basically is a “scalpel rather than a sledgehammer.”  It gives those arguing for increased water pumping an extra level of support.  He said there will certainly be court challenges to increased pumping by environmental activists.  But the judge in any such case will be able to look at this law and see the intent of Congress…giving proponents of better water management a new tool to fight for extra water.

The Western Growers executive also looked at the part of the bill that authorizes appropriations for water infrastructure projects.  He noted that the law approves the use of $500 million but does not actually appropriate the funds.  That work will be up to the new Congress and the new president.  He said the bill passed with such overwhelming majorities in both the Senate and the House that there does appear to be consensus on dealing with the water supply issue in the West.  Nuxoll expects members of the Trump administration dealing with this issue to be more supportive of farmers and cities getting increased water supplies and less supportive of uses for threatened species.

Amaral stated the same thing, noting that when President-elect Trump was running for office, he twice visited California stating that he would solve the storage problem.  Additionally, the appropriations in the new law carve out sections for habitat improvement projects as well as matching funds for infrastructure.  As Nassif pointed out, Congress has lots more work to do.

Amaral argues that it is a very simple proposition at its core: “Farmers, farmworkers and cities should have the water they need.”

CAREERS IN AG: Southwest Tour Opens Students’ Eyes

January 18th, 2017

On December 13, 2016, Travis Taylor, a managerial economics major at UC Davis, stumbled upon exactly what career he wants to pursue when he graduates college: a director of harvest equipment at a company like Taylor Farms.

Travis Taylor was one of 26 students from UC Davis, Cal Poly Pomona and University of Arizona who attended Western Growers’ Careers in Ag Tour on December 12-14, 2016.  During the tour, students majoring in a science, technology, engineering or mathematics (STEM) field had the opportunity to visit a variety of ag operations to learn about the abundance of career opportunities available in the industry, as well as connect one-on-one with professionals in the field.

The tour started at Prime Time International where Co-Founder Mark Nickerson and his team spoke to the students about the importance of technology in drip irrigation.  Students enjoyed hearing how nutrients were directly mixed in through drip irrigation and how technology was used to help automate the process.  The tour then headed out to Prime Time’s mesh house and packing plant where students were mesmerized by the different ways peppers are grown due to the sensitivity of the seed and how they are sorted, packed and shipped.

At Head Start Nursery, the soil science and plant science scholars were especially interested in learning how the nursery grows vegetable transplants and ornamental plugs.  Students received a hands-on tutorial on how to effectively remove pathogens from the soil and how important it is to track the entire process from sowing to shipping.

Organic farming was the main topic of discussion at Duncan Family Farms.  During a riveting, one-hour Q&A session with a team of irrigation managers, agronomists and farm managers, students were able to expand upon what they have read in books.

“What they teach you in schools is spot on but they are broad concepts,” said Jim Tadano, an agronomist at Duncan Family Farms. “When you get to a specific crop, you have to change your growing practices to cater to that crop.  You have to modify your growing techniques based on what you are growing, where you are growing it and when you plan to grow it.”

Day two kicked off in Yuma at a Tanimura & Antle farm where Vice President of Harvest Brian Antle spoke to students about the labor issues facing agriculture.  As Antle took the students out into the field to see how the farmworkers harvest lettuce, he explained how many of Western Growers’ members pay their farmworkers $17 to $22 per hour, plus health care benefits and housing.  Students were able to grasp the severity of the labor shortage and were inspired to become part of the movement to develop technological solutions to help provide relief to the shortage.

Automation was on all the students’ minds as they ventured to Taylor Farms to meet with Chris Rotticci, the director of automated harvest equipment.  The students had the opportunity to see the Automated Romaine Harvester in action and learned how this revolutionary machine uses a water knife to cleanly cut the heads in the field, eliminating the need for employees to cut romaine by hand.

Rotticci connected with the students, giving them tips on how to advance in agricultural companies like Taylor Farms.  After speaking one-on-one with Rotticci and hearing what his job entailed, UC Davis Student Travis Taylor, a junior, knew that this is what he wants to do when he graduates college.  “This trip confirmed my career path,” said Taylor. “Ag is just in my blood.”

JV Smith Company Vice President Kyle Smith, General Manager Matt McGuire and Food Safety Director Fatima Corona gave students a comprehensive session on food safety.  Students learned about the source of the spinach E. coli outbreak in 2006 and how that outbreak affected the industry and food safety standards and practices.

Adding diversity into the tour curriculum, students visited the Yuma Agricultural Center of the University of Arizona to get an inside look into the research component of agriculture.  Students learned how drones are being utilized in the field and heard from renowned “poop doctor” Dr. Paula Rivandeneira.  Hearing how Dr. Rivandeneira’s specialty is to keep a watch on crops to ensure fecal matter is not contaminating food supply helped students better understand that agriculture is not just farmers and farmworkers.  Students were realizing that they could, in fact, use their STEM degrees in agriculture.

“This experience confirmed my career path because of the amount of opportunities I saw were available in the industry,” said Summer Blanco, a sophomore and biology-botany major at Cal Poly Pomona.

The Yuma Desalting Complex rounded out the second day of the tour where students sported hard hats as they toured the facility.  They learned how desalination is achieved through reverse osmosis, and how the plant will be crucial to the sustainability of agriculture as the salt levels in the Colorado River get too high.

On the last day, students woke up bright and early to meet with executives from the Gowan Company in downtown Yuma.  They heard from a collection of speakers, receiving a rounded education on what human resources looks for in candidates, research efforts in seed testing, supply chain management and global product management.  They even had the opportunity to meet Gowan Company Founder Jon Jessen.

The last stop of the tour was in Holtville, California with Jack Vessey of Vessey & Company.  Vessey, along with Bartt Ries and Heather Vessey Garcia, spoke extensively on the importance of soil science.  “There are different areas in the field that need different types of soil.  We treat each area of the field differently,” said Ries.

Vessey took the students out to the cilantro field to show them how water is allocated to the farm.  He also gave them a quick tutorial on the difference between 40-inch beds and 80-inch beds and how the size of the beds depends on what type of crop is being grown.

Throughout the three days, students also had face time with industry leaders during lunch and dinner. During lunch on day one, Phil Rosentrater, deputy director for the economic development agency of Riverside County, spoke to students on the current situation of the Salton Sea and future plans to help recover the body of water.  At dinner, students networked with each other in small groups, and were joined by Kevin Eatherly, president of the Yuma Area Agricultural Council, and Paul Brierley, executive director at the Yuma Center for Excellence for Desert Agriculture.  Eatherly and Brierley spent quality time with each group, getting to know students one-on-one and answering any questions they had about agriculture or their role in the industry.

As the tour came to a close, students were left with a stronger understanding about the types of careers available in ag and how students like them can make a different in helping sustain the world’s food supply.

“I learned so much over the past three days and am so grateful that I was able to experience the industry as a student,” said Nisha Marwaha, a junior at UC Davis studying biological systems engineering. “I now have a better understanding of what needs are yet to be met and where my place in agriculture lies.”

The December 12-14 tour is the third installation of the recently launched Careers in Ag Program.  The purpose of the program is to 1) introduce college students to the variety of careers agriculture has to offer; 2) encourage STEM students to pursue a career in ag; and 3) introduce Western Growers members to highly-intelligent students who they may want to hire in the future.  Originally launched as a pilot program with UC Davis and Cal Poly Pomona, the program has now transformed into a fully-integrated tour that also educates students from the University of Arizona, as well as from California Community Colleges.

The number of applications for the program has continually soared. This last tour received double the number of applications than past tours.  “For us I think it was word of mouth from the students who went in June,” said Lisa Kessler, associate dean of the Huntley College of Agriculture at Cal Poly Pomona.  “I also think the positive publicity around the program made other students more interested.”

The program has educated 56 students to date.  To host a tour or to learn more about the program, contact Stephanie Thara, communication manager at Western Growers, at (949) 885-2256.

Changes to Reporting First Aid Claims Now in Effect

January 18th, 2017

By Ken Cooper, WGIS Director of Risk Strategy

As of January 2017, insurers are now required to report all claims to the California Workers’ Compensation Insurance Rating Bureau (WCIRB). These include claims for which any medical care is provided and medical costs are incurred, including those involving first aid treatment, even if the insurer did not make the payment.

 

What does that mean for employers?

Businesses in California who previously made arrangements with their medical clinic to directly pay for medical treatment bills for “first aid” claims will no longer receive the benefit of their workers’ compensation experience modification rating being unaffected.

California Labor Code section 5401 defines “first aid” as “any one-time treatment, and any follow-up visit for the purpose of observation of minor scratches, cuts, burns, splinters, or other minor industrial injury, which do not ordinarily require medical care. This one-time treatment, and follow-up visit for the purpose of observation, is considered first aid even though provided by a physician or registered professional personnel.”

In the past, many insurance carriers allowed employers to make direct payments to medical providers for treatment specifically related to first aid claims.  Insurers rarely, if ever, tracked the actual costs paid by employers for first aid claims, even on those claims properly reported and coded as first aid files.  The benefit of an employer’s direct payment of first aid claims was a decreased impact on the experience modification (calculated through a formula comparing the actual losses to the expected losses) associated with the first aid claims.

Now, since all claim financial data must be reported, even first aid workers’ compensation claims that are paid directly to medical clinics will affect an employer’s experience modification.  Employers are highly encouraged to report all claims to their insurance provider.

 

What are the effects of the more stringent requirement?

The requirement to report first aid claims to insurers is not new.  However, now the WCIRB is looking to put additional pressure on the reporting requirements of all claims and claim financial data, including those meeting the definition of first aid claims.  The WCIRB formally announced clarification of the data tracking and reporting requirements through bulletin issued on November 10, 2016.

Because of the formalized scrutiny on insurers to track first aid claim financial data, insurers may begin disallowing policyholders from making direct payments to medical providers.  Another possibility is that a continued process of direct payment of first aid costs to medical clinics may expose employers to more detailed audits by the WCIRB.  Businesses who maintain an agreement with a medical facility for direct payment of bills related to first aid claims may wish to reconsider their current process.

Western Growers Insurance Services can assist members with training their managers, supervisors and employees on the process for handling workers’ compensation claims and assist the business in finding the best workers’ compensation provider for its business.

For more questions, please feel free to contact me at [email protected] or (949) 379-3858.

Speaker of the Arizona House J.D. MESNARD: College Internship Launches Political Career

January 18th, 2017

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

J.D. Mesnard was first elected to the House of Representatives in 2010 and has been re-elected ever since.  For the 2017 term, he was elected by his peers to be the leader of the majority Republican caucus and Speaker of the House.

Where were you born and raised? Are you a native Arizonan?

I am not.  I grew up in a military family so for the first 10 years of my life we moved around a lot.  I was born in Tampa, Florida at MacDill Air Force Base, and also spent time in Colorado, New Mexico, and Spain, before moving to Arizona when I was 10 years old in the fifth grade.  We moved to the southern valley in Tempe and now I live in Chandler.  I went to high school and then on to Arizona State University where I was a music major.  I was a music composer and my eventual goal was to move to California and write music for movies and television.  At one point, I did in fact, go to California and worked with a movie producer, but it didn’t quite work out.

 

How did you transition into a political career?

When I was in my last year of college, I learned about an internship with the state Legislature.  I applied, was accepted and was placed in the state Senate.  So in early 2002 for about four to five months, I worked as an intern in a non-partisan research role for the Education Committee.  I fell in love with the policy making process.  At the time Ken Bennett, who was the president of the Senate, was also the chairman of that committee.  We became acquainted and after I graduated I joined his policy staff and became an assistant policy advisor, which was pretty heady stuff for a 22 year old.  I served him for four years and then stayed on for another four years after he left.

By that time I had served eight years in the state Senate and thought I had as much experience as anyone else running for office.  In 2010 two open seats came available in my district and I decided to run for the House and liked the idea of becoming a policy maker rather than a policy advisor.

I was only 29 years old—when I decided to run—and came from having absolutely no political connections…and I won.  I thought it was pretty neat.

 

Did you run on a specific platform?

I actually did just the opposite.  I didn’t run on a platform.  I campaigned stating that I didn’t have a big agenda.  I purposely didn’t make a lot of promises.  I think the biggest problem with most politicians is that they make a lot of promises that they can’t keep.  They think they are going to be able to make lots of changes but then they get elected and it’s almost impossible to get almost anything done that they promised they would do.  They end up being like everyone else and not fulfilling their promises.

What I did instead was post an issues page on my website stating my position on every issue that I could think of.  It was a very good exercise and has helped me quite a bit while I have been in the Legislature.  I can refer back to it and understand my thinking at the time.  My thinking has changed a bit over time as being in the government tends to do that.

 

How do you describe your ideology?

I was raised in a conservative household and I remain a conservative.  I have refined my political viewpoint over the years, but my belief is that you should tell people where you stand as clearly as you can.  When I ran for speaker I did the same thing.  I wrote a 27-page paper telling the other legislators of my vision for the House.  In many ways it had to do with changes in the process.  I am a policy wonk and I think the process is very important and it has to be open.  My goal is to empower legislators so that we can effectively accomplish the agenda we have set.  Since I became speaker-elect (this interview took place several days before Mesnard officially assumed the post), I have worked with the Democrats and have tried to be fair.  Of course, I support my caucus, but I also serve the entire House and I have worked through some issues with the Democrats and have made some changes.  For example, we took some money away from the Republican budget for staffers and added it to the Democrat side to be fair.  I think I have been very fair.  And the process has been fair.

 

Arizona has been a solidly Red (Republican) State but there has been talk that it is moving closer to the Blue State side.  Any thoughts on that?

More and more I do hear that we are becoming a Purple State (in play for both parties) and I think that is true.  We do have two distinct populations that are growing.  We have a large and growing senior population, which tends to be more conservative.  But we also have a growing immigrant population plus a lot of people coming in from California that are creating a changing melting pot.  I do not think that we are making a huge right to left move, but we are gradually moving in that direction.

But we have always been somewhat purple.  We elect Democrats to Congress and have had governors and other statewide officer holders from the Democrat party, though we don’t have any right now.

 

As Speaker of the House do you have any specific legislative items on your agenda for this term?

As a legislator I have some specific items I care about, but I do not have an agenda that as speaker I am going to force through the caucus.  Two of my most important issues are tax reform and federalism, which involves the issue of state rights.  I believe these are issues that represent the viewpoint of the caucus.

 

What is the biggest issue or challenge facing the Arizona Legislature this session?

I am not sure I would call it a challenge, but the state budget continues to be something we have to watch.  Right now we have a structural balance and we are in a much healthier and stable financial position.  We’d love to have a situation where our coffers are overflowing and we can spend more on education and public safety.  But for this year, I believe we are going to have a status quo budget.

 

For your first time in elected office, you will have a Republican president.  What Arizona issues might this impact and how do you expect it to play out?

Of course immigration will be a big issue and it is an issue with some unique characteristics for Arizona.  We have a far different situation than anyone else.  We do have a Republican president but you can’t call him a conventional Republican.  There are a lot of unknowns.  We have to take a wait and see approach.  We are just not sure what will happen or what he will do.

 

On a more personal note, what does the “J.D.” stand for and tell us about your family?

The J.D. stands for Javan Daniel.  Javan is a biblical name as he was the grandson of Noah.  It is an unusual name with an unusual spelling so I’ve always found it easier to go by my nickname J.D.

I did get married two and half years ago.  In fact we still celebrate on a monthly basis and we just celebrated our 29 month anniversary.  My wife, Holly, is a nurse and we have a happy marriage and a great life.

 

Our members grow the best fruits, vegetables and nuts in the world.  Do you consume our products?

Absolutely.  And as I have been in the Legislature and attend Ag Day, which we have every year, I have learned more and more about the agriculture in this state.  I am an urban guy and I was less familiar with agriculture.  As our country has changed, agriculture has become less pervasive as an occupation, but it is still extremely important and is critically important to our state.  One of my favorite ag products at Ag Day are cheese curds.  I am a mozzarella guy and so I look for them every year.

 

Retirement Options Could Change Under a Trump Administration

January 18th, 2017

By Matt Lewis, President, Western Growers Financial Services

2017 will likely bring sweeping tax changes that could have a significant impact on your financial future.  President-elect Trump’s pledge to “reduce taxes across-the-board, especially for working and middle-income Americans” includes a proposal to simplify the tax code by reducing the number of federal income tax brackets from seven (39.6%, 35%, 33%, 28%, 25%, 15%, 10%) to just three (33%, 25%, 12%). Trump’s proposal would also more than double the standard federal tax deduction from $6,300 to $15,000 for singles, and $12,600 to $30,000 for married couples filing jointly.

Assuming that Trump’s plan is put into effect with the help of a Republican-controlled House and Senate, we could see the “largest tax change since Reagan” according to Steven Mnuchin, Trump’s pick for treasury secretary.  While this plan may lower your overall tax burden in the coming years, it could also have a major impact on the relevance of your current retirement savings and investment strategy.  Let’s explore how Trump’s tax proposals could affect two common investment vehicles—your 401(k) and IRA—and why understanding the difference between the traditional and Roth version of each is critical to getting the most value out of these upcoming tax policy changes.

Although a 401(k) and IRA are both designed to help you save for retirement and may seem very similar at first glance, one primary difference between them is that a 401(k) is an employer-sponsored investment savings account, while an individual retirement account (IRA) can be opened privately through a custodian such as Western Growers Financial Services.  Both traditional 401(k) and traditional IRA contributions are tax-deductible depending on your income and tax-filing status, leaving future distributions subject to taxes. Unlike these traditional versions, neither Roth 401(k) nor Roth IRA contributions are tax-deductible.  Instead, future qualifying distributions are sheltered from taxes.

While there are many important factors to consider before deciding between the traditional or Roth version of a 401(k) and IRA, the key tax implication addressed here is timing.  You can choose to either pay taxes on contributions in the present (Roth), or pay taxes on your distributions in the future (traditional).  Which option makes the most sense depends on when your tax burden will be lowest.

For example, if you and your spouse are currently earning a total of $50,000 a year and filing jointly, the Trump plan would increase your standard deduction from $12,600 to $30,000, while lowering your federal tax bracket from 15 percent to 12 percent.  In past years, when your annual federal income taxes were relatively high compared to your anticipated future retirement tax burden, it may have made sense to go with a traditional 401(k) and IRA in order to maximize your deductions up front.  Now, with the possibility of historically low taxes in the near future, opting to take advantage of a Roth 401(k) and Roth IRA for tax-free earnings during retirement (when tax rates could return to higher levels) may be the best option.  A Roth 401(k) and Roth IRA may also be the better choice for younger, lower-income workers at the beginning of their career who anticipate moving into a higher tax bracket at retirement.

Times of political change present financial opportunities as well as potential pitfalls.  As we transition into the new year and a new presidential administration, it’s more important than ever to fully understand your investment options and adjust your retirement strategy based on changing circumstances.  A retirement plan is not something that can be created once and then put away in a drawer, never to be looked at again.  Financial planning is an ongoing process, one that requires a long-term commitment to keeping up with economic conditions and re-evaluating which options will best help you reach your retirement goals.

Western Growers Financial Services offers a wide array of financial planning assistance, investment tools, and funding options.  We are here to help you and your employees gain a better understanding of how these changing conditions affect your investments, make the best decisions possible for your retirement and estate planning, and draft a roadmap to retirement designed specifically for your unique goals.

 

AGRALOGICS: Turning Available Data into Accessible Insights

January 18th, 2017

(Editor’s Note: Agralogics was the “Judge’s Choice” winner during the Innovation Arena II at Western Growers 91st Annual Meeting in Kauai this past November.)

Though he grew up on a farm in the Punjab region in northern India, Sumer Johal, the CEO and founder of Agralogics, didn’t “connect the dots” between the role of information technology for global agriculture and the impact it could have in people’s lives until much later in his career. However, the MIT alumni, who earned both his undergraduate and graduate degrees from the esteemed Cambridge, Massachusetts school, has always been strongly influenced by his family’s proud agriculture tradition.

His multi-generational farming family grew a variety of crops over the years, ranging from sugar cane and wheat to vegetables and herbs. Being stewards of the land and cultivating crops to feed the world helped formed the basis for his current pursuits at Agralogics. Johal said growing up in that environment “had, and continues to have, a lot of influence and relevance in why I am engaged in what I am doing.” For nearly a decade following his graduation from MIT, Johal worked in leadership positions for various public and private companies in the information technology sector before he started to think about—and long for—the kind of culture that exists in agriculture.

“People think of agriculture as more about the act of farming. I think of agriculture as more about the culture, the values that farmers have,” Johal said. “Farmers care about things like food safety, nutrition and health because they feel a responsibility to feed the world. As I started to move forward in my career and grow my own family, I realized these things are extremely important. Much more important than trying to sell one more pair of sneakers on the internet.”

It wasn’t until his late 30s that he realized technology for technology sake was not making the world a better place. Instead, information technology needed to make a positive difference in people’s lives for it to matter, particularly because one-third of the amount of food we produce is wasted and one-third of the people on the planet are hungry.  “If that is not a problem for technology to help solve, then I don’t know what kind of problems we should be solving,” Johal said. “This is about our existential survival.” That realization was the single premise that reawakened the core values Johal grew up with and inspired him to found Agralogics.

 

The Genesis of Agralogics

Discussions with his extended family in California about best irrigation practices yielded a stark reality and a fundamental problem with using data to solve these basic types of on-farm challenges. A lot of data that could be of help to farmers is collected and available, but it is not easily accessible. Johal explained there is a very big difference between availability and accessibility and used the creation of Google as an example.

Before Google, there were lots of websites on the Internet, but not all of them were easily accessible. As more came online they became even harder to find. That is, until Google was created, which made finding those websites—and consuming their content—much easier.

Similarly in agriculture, more and more public and private data is being made available from a variety of resources such as satellites and research data collected from universities—on top of the mountains of data that already exist at agriculture enterprises—which can aid these enterprises in being more efficient and sustainable. But the data isn’t easily accessible, making it almost impossible to consume and use.

Having worked in information technology doing high-velocity data analysis in several different industries over the course of their careers, both Johal and co-founder Sanjay Dayal recognized this as a technological opportunity and created Agralogics, a Google-like company that makes big data accessible to stakeholders throughout the supply chain, including growers, processors and shippers.

 

How Big Data Helps

Global public datasets, such as those from satellite and weather sources, are now available and rapidly growing, both in resolution and frequency. For example, when satellites take pictures of the earth, they can be analyzed at different spectral wavelengths. Johal said individual plants and trees broadcast their health—like a radio broadcast—and their health can be determined through proper interpretation of the satellite information. “All the knowledge of how to do this has already been researched over the past 50 years,” Johal said. “In fact, these satellites were launched to analyze global food production in the ‘60s. So it’s all there.”

But farmers who are growing in the Central Valley, for instance, aren’t interested in the spectral imaging results for the entire Valley or weather trends that might not be relevant to their crops. They just want the information for the acres they are growing food on, and they want to know what that data means specifically for their crops and blocks. At its core, Agralogics accesses that information through its technological platform, then interprets the data, providing context and making it relevant for agricultural businesses.

The challenge for Agralogics is being able to compute and convert this the data into meaningful insights, in a cost-attractive manner, while still maintaining the highest levels of security and privacy for its customers. However, the advent of “cloud computing” has made this possible. Data is growing at a rapid rate, and is being constantly collected on everything from food safety to water to chemicals and other inputs. Using its industry-specific cloud computing program, Agralogics is able to organize this information, from both public and private sources, into a user-friendly platform that provides “contextually relevant decision support” for anyone with the right access permissions, within a company or across the global supply chain.

Johal likens the process to another familiar data-gathering experience. “It’s just a matter of going to the library and knowing what books to check out to get the information you want and need,” he explained. “Which is essentially what Google did.”

 

FROM MINE WASTE TO SOIL GOLD: Firm Delivers High-Yielding Fertilizer

January 18th, 2017

The discovery of gold nuggets in California in the late 1840s is arguably one of the most significant events that shaped American history.  Now, Plant Nutrition Technologies, Inc. is looking to bring the Gold Rush back to America…through farming.

Plant Nutrition Technologies has developed an ecologically-sound process that converts mine waste into bio-mineral fertilizers, which it claims creates healthier and stronger plants that bear more robust fruits and vegetables.  The firm says micronutrient-rich product also results in higher yields of quality crops and helps create plants with greater resistance to disease and insect damage.

“When we began, our primary goal was to remove the mine and mill waste that was left all around the states from the Silver and Gold Rush eras,” said Dennis Amoroso, CEO and chairman of Plant Nutrition Technologies.  “When this waste mixes with acid rain from rain, snow or fog, it damages our lands and rivers.  We wanted to fix that.”

 

How it Works

As the company embarked on its journey to clean up the earth, officials were soon posed with the question of where to dispose of the waste.  Plant Nutrition Technologies came up with an innovative solution: use the residual materials to enrich soil on farmland to create super plants.

“The by-product of our process is rich with micro nutrients needed to remediate and amend depleted farmland,” said Amoroso.

He explained that, over time, farmland get stripped of critical nutrients because they are being passed along to the fruits, vegetables and nuts that are being harvested.  These nutrient values must be replaced; synthetic fertilizers (fertilizers whose chemistry consists mainly of nitrogen, phosphorus and potassium) only provide nutrients for plant growth but do not sustain the soil.  That’s where Plant Nutrition Technologies’ bio-conversion process comes in.

During the process, Rock Powder, a blend of the raw materials left from the mining eras, is combined with natural elements, such as bio-mass, manure, wood ash and various types of bacteria, to create a soil bio-mineralizing and regenerative fertilizer.  The microbes from this fertilizer inhabit the soil, reach directly into the root system and provide better nutrition than synthetic fertilizers.

“Sometimes with synthetics fertilizers, the soil becomes immune to regeneration.  We want to help farm owners reduce the input of synthetic fertilizer or to completely eliminate it.  Our product is the only product on the market that can replace synthetic,” said Amoroso.

 

Advancing Science, Innovation and Sustainability

Plant Nutrition Technologies currently offers three products—PoweRoc, BioRoc, and RocTea—and has joined the Western Growers Center for Innovation & Technology (WGCIT) to enhance the firm’s offerings. PoweRoc and BioRoc are a blend of several different nutritious mineral-rich Rock Powders and can be mixed in with a compost pile or added to the soil several times throughout the growing season.  RocTea is the liquid from a blend of several different nutritious mineral-rich Rock Powders and waste produce and can be applied directly on mature plants during the growing season.

As one of 26 residents in the WGCIT, Plant Nutrition Technologies collaborates with other residents on how to advance agtech and provide farmers with the technologies they need to produce the highest quality of food in the most sustainable way.

“The Center has provided a supportive environment where we have successfully interacted with many people who directly benefit from the use of our product in California agricultural industries,” said Amoroso. “Because of the Center, we’ve been able to connect with individuals that we never could have had the opportunity to connect with before and have been afforded opportunities with the media that we would not have had without Western Growers.”

 

Prioritizing Sustainability and the Environment

In addition to developing a solution that regenerates soils to create super plants, the company has also made a positive environmental impact.  Through synergistic alliances with land owners, city, county, and state governing bodies, Plant Nutrition Technologies develops and implements operational plans for the removal and processing of tailings dumps, tailings ponds, and other sources of waste materials.

The company is currently working with the state of Nevada to clean up 300 million tons of mine waste leftover from the 1850s Gold and Silver Rush in Nevada.  Through an innovative process, the company is removing 100 percent of the lead and mercury from the waste and will convert the elements into bio-mineral fertilizer, making it available to farmers.

The company’s environmental impact is overwhelmingly positive; they restore properties to their owners and eliminate hazards such as heavy metals from watersheds.  “We are improving the environment by pulling the waste material out of environment and cleaning up the runoff that is damaging groundwater and the lands,” said Amoroso.

Robots in the Field

January 18th, 2017

I just got back from the Frontier Tech Forum in San Diego which featured a fascinating track on robotics. “RoboUniverse” spent a full day (out of two) talking about robotics in agriculture from the point of views of the technologist, investor and agricultural industry.  These events are important opportunities for Western Growers to develop knowledge and networks to assist our members in mechanizing select operations within agricultural enterprises.

We all know that labor availability has become a significant limiting factor within the specialty crop sector.  We cannot begin to address the question of how we will “feed more people” without perfecting a stable reliable workforce for the specialty crop sector.  To date, the principal focus has been on policy change to allow more (legal) immigrants into the United States to fill jobs within agricultural operations that our own citizenry do not want.  That work must continue.  But if those efforts are successful, will they in fact “future proof” the sector from other trends—like an aging workforce and improving economic conditions in source countries?  Each of these trends is reducing the traditional pool of workers such that even wide open borders may not afford American agriculture the labor it needs for the long term.  Compounding the shrinking and uncertain pool of labor are new regulations that dramatically increase the cost of labor, which is sometimes 60 to 70 percent of total production cost.

So there is a solid case for mechanization.  What is holding back the advance of the robots?  Scale, money, fit and state of the technology are key contributors to what seems to be slow progress in the specialty crop sector.

First, because it is always top of mind for everyone, let’s talk about money and scale because they are related.  A few million dollars in investment might yield a solid robotic lettuce harvester, but if you are only able to sell 25 of these harvesters in the United States how do you convince a major equipment company to invest in the research and development?  This is not your next smartphone or tablet, so you won’t sell one to every farmer in the country.  Scale is likewise important to the traditional venture investors, who are looking for a double-digit return on the investment when they sell off (exit) their equity.  If the startup can’t demonstrate ability to scale, it is hard to get to that merger, buyout or IPO (initial public offering).  This is exacerbated by the fact that a lot of the venture investors are looking at shorter term horizons (3-7 years) when in fact ag may take longer to broadly adopt expensive new technology.

Adoption brings up the topic of “fit.”  Many of the robotic and mechanical solutions to the problems of ag labor (at least historically) don’t work within existing crop production systems.  At RoboUniverse, a producer bemoaned the fact that his entire operation might be totally automated replacing 20+ workers forever—but to do that he would have to build a new facility from the ground up for tens of millions of dollars.  Tough call!  Smart folks have been coming to producers for years with harvest technology that works only when you reconfigure your farm, grow the crop differently, come up with different plant architecture etc.  These technologists need to think about how to mechanize within the existing system—and to be fair—agriculture needs to think more about how we might reconfigure operations to facilitate mechanization and automation.

Finally, there is the “state of technology.”  Robotics are advancing rapidly but there are many players, many approaches and much duplication of effort—some of which breeds healthy competition.  In harvesting, one needs to move, see, select, grasp and move again.  At its most basic, the component technologies that go into accomplishing these tasks include vision and imaging systems, locomotion, manipulation and machine learning.  Some of these are much farther along than others.  Perhaps the most challenging is “grasping” something.  Whether in a facility or a field, duplicating the dexterity of a human hand seems a long way off.

None of these are insurmountable issues.  Western Growers, through the Center for Innovation and Technology is committed to working up, over and around these issues to advance mechanization in the specialty crop sector.  The Center will continue to work with anyone who has technology that may be beneficial to the specialty crop sector but in our coming years of operation we are focusing on solving problems in a few key areas.

Helping to alleviate the ag labor crisis is a top priority for Western Growers.  To do this, we need a “moonshot” approach and are seeking the best and brightest to collaborate directly with industry to knock down the key barriers and develop equipment that will automate labor-intensive operations in the field.  I invite you to join us as we seek to develop a strong team of growers, engineers, technologists and others who are committed to solutions and encourage you to contact me directly to get involved.

Contact me at [email protected] or call me at 949-885-2205.

New Employment Laws for 2017

January 18th, 2017

On January 1, 2017, a number of new employment laws will take effect in California. These laws will have a significant impact on California employers and companies with operations in the state.  Prompt action will need to be taken to ensure compliance, including revising employment policies and practices such as hiring and compensation practices, employee handbooks, and notices. Below is a summary of many of the laws that affect agricultural employers. All are effective January 1, 2017, unless otherwise noted.

 

New Minimum Wage and Salary for White Collar Exemptions

Governor Brown signed into law SB 3, setting a $15 minimum wage in California by 2022 for businesses with more than 25 employees and by 2023 for smaller companies. The first phase-in sets the minimum wage at $10.50 an hour, up from $10 an hour, as of January 1, 2017. 

The increased minimum wage also increases the minimum salary that must be paid to meet the so called “white collar” exemptions (i.e., executive, administrative, and professional). For employers with 26 or more employees, the minimum salary under California law is $43,680 per year as of January 1, 2017. This is less than the $47,476 per year that the U.S. Department of Labor set in its Final Rule, but a Texas judge issued a nationwide preliminary injunction halting the increase, and the rule is not expected to be resuscitated by the Trump administration.

In addition, a number of cities and counties have set their own minimum wages higher than the state’s minimum, including San Diego, Los Angeles, San Francisco, and San Jose, among others.  Some municipalities including San Diego and Emeryville have even enacted their own paid sick leave ordinances that exceed state law requirements. Make sure to check whether or not the cities or counties where your employees work have such ordinances.

 

Ag Overtime

AB 1066 will gradually lower the daily and weekly hours of work thresholds for paying overtime to agricultural employees starting in 2019 for ag employers with more than 25 employees and by 2022 for smaller operations. Currently, agricultural employees are entitled to be paid overtime when working more than 10 hours in a workday or more than six days in a workweek. On the seventh day of work, the first eight hours worked must be paid at 1½ times the employee’s regular rate of pay, and any hours over eight must be paid at twice the employee’s regular rate of pay. Because AB 1066 was poorly drafted and not well-understood by legislators, there are questions concerning the legislation’s impact upon the existing statutory day of rest exception and the existing overtime exemptions (irrigators, truck drivers, etc..) that are provided for in Industrial Wage Commission Wage Order 14, which governs agriculture.  Many ag employment law practitioners believe that these Order 14 exemptions remain in place until 2019 at the earliest, when the overtime changes begin to phase-in.  However, ag’s exemption from the requirement to provide employees with one day’s rest in seven likely was eliminated by AB 1066 on Jan. 1, 2017.  Western Growers, in conjunction with other industry organizations, is seeking clarification by state regulators and cleanup legislation, if necessary.

 

Fair Pay

SB 1063 and AB 1676 significantly expand California’s toughest-in-the-nation equal pay law, the Fair Pay Act (SB 358) which was enacted last year. The Fair Pay Act’s requirement of equal pay for substantially similar work is expanded beyond gender to include race and ethnicity. In addition, AB 1676 amended the Labor Code to state that “prior salary shall not, by itself, justify any disparity in compensation” between workers of the opposite sex, race, or ethnicity.  Thus, the new law eliminates considering prior pay history, by itself, as a permissible explanation of pay differential. While the new law does not prohibit asking job seekers for salary history, obtaining that information may prove problematic in a pay equity lawsuit.

 

Arbitration Agreements

Two new laws, SB 1007 and SB 1241, proscribe certain common provisions in arbitration agreements governing workplace disputes. SB 1007 gives any party to arbitration proceedings the right to have a court reporter transcribe any proceeding as the official record in the dispute. SB 1241 prohibits employers from requiring California employees to adjudicate their claims in other states or adjudicate claims using the law of another state, as a condition of employment. This applies specifically to arbitration agreements, and other agreements entered into on or after January 1, 2017.

 

Unlawful Employment Verification

SB 1001 prohibits an employer, in the course of verifying authorization to work, from: (1) requesting more or different documents than are required under federal law; (2) refusing to honor documents that on their face appear reasonably genuine; (3) refusing to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization; and (4) attempting to re-investigate or re-verify an employee’s authorization using an unfair immigration-related practice. Such practices are already illegal under federal law. However, SB 1001 creates a new penalty recoverable by the applicant or employee, or by the Labor Commissioner, for a violation of the statute of up to $10,000 per violation.

 

Employee Retirement Savings

Passed in 2012, SB 1234 goes into effect on January 1, 2017. The bill requires employers to either maintain a private, qualified retirement savings plan, or enable employees to make automatic contributions from their paycheck to a California Secure Choice Retirement Savings Trust savings account. Employers that don’t offer a retirement plan must offer a payroll deposit retirement savings arrangement for eligible employees to contribute 3 percent of annual salary to retirement. Open enrollment is every two years and employees may opt out of the program. Employers may also be required to provide information about the program to employees.

 

Juvenile Criminal History

AB 1843 prohibits employers from asking about or considering information relating to arrests, convictions, or other proceedings that occurred while an applicant or employee “was subject to the process and jurisdiction of juvenile court law.”

 

Domestic Violence Prevention

AB 2337 requires employers with 25 or more employees to notify employees at time of hire of their rights to take protected leave when victimized by domestic violence, sexual assault, or stalking. Employers do not have to provide the notice until the California Labor Commissioner develops a notification form, which has not yet been published as of this writing. (Early January 2017)

 

Pay Stubs for Exempt Employees

AB 2535 relieves employers from having to track hours worked by employees that are exempt from minimum wage and overtime regulations. The new law identifies seven circumstances where exempt employee hours do not need to be tracked and hours logged on an itemized wage statement.

 

All-Gender Restrooms

Effective March 1, 2017, AB 1732 requires all single-user restroom facilities in any business establishment, place of public accommodation, or government agency to be identified as “all gender” rather than being labeled as male or female only. AB 1731 defines “single-user toilet facility” as “a toilet facility with no more than one water closet and one urinal with a locking mechanism controlled by the user.” It is unclear whether the law applies to single-user toilets in the field, but it is probably advisable to include at least one PortaSan with an “all gender” sign.   However, note that state regulations require agricultural employers to maintain separate field toilets for “men” and “women.”  Employers are advised to allow employees to utilize the restroom of the gender with whom they identify.

 

Workplace Smoking Prohibitions

Existing law prohibits smoking of tobacco products inside an enclosed space, as defined, at a place of employment. Labor Code section 6404.5 extends the definitions of smoking to include “vaping” and a companion statute expands the definition of tobacco product to include electronic cigarettes (e-cigarettes).

 

ALRB Chairman Abruptly Steps Down

January 13th, 2017

On Friday, January 13, 2017, William B. Gould IV announced his resignation as chairman of the Agricultural Labor Relations Board (ALRB), effective no later than February 22, 2017. The resignation letter cited frustrations with the state bureaucracy for stalling his key proposal, a proposed rule that would expand ALRB agents’ access to fields for purposes of educating California farmworkers about their union organizing rights. Western Growers strongly opposed the rule, which was proposed by the Board over a year ago, as an illegal overreach of the Board’s powers under the Agricultural Labor Relations Act.

In an interview with the L.A. Times, Gould also railed against the ineffectiveness of the United Farm Workers Union: “The UFW spends most of its time in Sacramento, lobbying for laws and regulations, and has ‘absolutely no interest in organizing the unorganized,’ Gould said.”

Western Growers Vice President and General Counsel Jason Resnick was appointed by Gould to serve on his advisory Labor Management Committee. 

“We did not always see eye to eye with Chairman Gould, but we have great respect for him,” Resnick was quoted as saying in the L.A. Times article. “We hope that the administration will restore a balance of perspectives and views on the board,” referring to the Administration’s propensity to fill key ALRB positions with former UFW activists.

On the same day Gould resigned, Gov. Jerry Brown announced that he was re-elevating Genevieve Shiroma as Chair of the ALRB. The empty board seat is being filled by former California State Senator and Assemblyman Isadore Hall of Compton. Hall lost his bid for a Congressional seat last November.

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

Investing in the Ag Leaders of the Future, Today

January 23rd, 2017

Did you know that each year there are 60,000 new job openings in agriculture but we only have 35,000 graduates to fill them? As surprising as this statistic is, it’s absolutely true and reinforces how we need to address the workforce shortage today if we want to continue to have a nutritious and uninterrupted food supply.

Oftentimes, we are so busy with the present that we forget to invest in the future. We can no longer afford to have that luxury. As ag advances and looks toward technology to help solve issues such as the dire labor shortage, we need highly intelligent and enthusiastic young professionals to bring the industry to the next level. For example, engineering and computer science majors may not think that there is a place for them in ag. They are wrong.

As our current farm labor workforce rapidly decreases, engineers are critical to the development of robots and automatic harvesters that will assist with picking crops in the field. Furthermore, computer science skills—especially the ability to code—are highly desired as apps are increasingly being utilized to assist with farming operations. Big data is where our industry is headed, and we need graduates who understand how to apply that information to enhance management processes. In fact, HeavyConnect, one of the agtech startups working out of our Center for Innovation & Technology, makes it a point to hire computer science students right out of college to develop apps for ag.

It’s important that the industry works together to introduce students to pathways that lead to careers in agriculture and related industries. One of Western Growers’ latest initiatives is to make college students aware of the high-paying, high-skilled job opportunities in ag, as well as facilitate career placement between students and ag organizations. Through our Careers in Ag program, we work with UC Davis, Cal Poly Pomona and University of Arizona to introduce students studying science, technology, engineering and mathematics (STEM) to Western Growers members. Students participate in a three-day farm tour where they learn about STEM-related career opportunities in the industry and connect with successful ag professionals in the STEM field. Our Careers in Ag program also hosts ag students from California Community Colleges for a one-day tour, introducing students to ag companies and employment opportunities in the local region.

Beyond college efforts, we make it a priority to help shape elementary school students and professionals already out in the field. The Western Growers Foundation teaches K-12 students the importance of STEM education through planting school gardens; while our Future Volunteer Leaders program focuses on guiding the next generation of ag leaders within our member companies to become advocates for the fresh produce industry.

I can’t stress it enough: developing our future workforce is crucial to keeping ag viable and we need to keep investing.

Produce Testing to be Discussed on Jan. 31 Lunch & Learn

January 24th, 2017

While product testing is used extensively by the food industry, several technical and operational challenges still remain for the fresh produce industry. On Tuesday’s Lunch & Learn webinar, Dr. Trevor Suslow of UC Davis will highlight how the produce industry can utilize product testing. 

Product testing is a valuable tool and can be part of a produce safety verification program. However, it cannot be considered as a substitute for a systems-approach to risk-based program. The webinar will discuss how best to utilize testing as a tool, as well as provide an overview of the current state, benefits and challenges of produce testing.

Join us for this Lunch & Learn webinar to hear more about produce testing, share your experiences and ask questions.

WEBINAR DETAILS

Lunch & Learn Webinar: Produce Testing: Current State, Benefits and Challenges

Date: Tuesday, January 31, 2017

Time: 11:30 a.m. to 12:30 p.m. PST

Speaker: Dr. Trevor V. Suslow; Extension Research Specialist; University of California, Davis. Bio.

WG MEMBERS REGISTER HERE

Participation is complimentary and available to WG members only.

Contact Sonia Salas at (949) 885-2251 for questions about this Lunch & Learn webinar.