Friday, March 11, 2016
Sacramento Business Journal
Lawmaker proposes an eight-hour workday for farmworkers
By Allen Young
Farmworkers would receive overtime after eight hours of work under legislation recently introduced by Assemblywoman Lorena Gonzalez.
Gonzalez, a pro-labor San Diego Democrat, knows she has a steep climb in front of her. Over the last six years, legislation to increase overtime for farmworkers has failed twice in California, most recently in 2012.
Gonzalez views her bill as a simple fairness measure that would give farm laborers the same employment benefits as workers for food distributors and grocers.
“This is basic human rights,” she said. “We haven’t let the workers on farms catch up to the rest of society. It’s time we do that.”
The legislation would lower the current 10-hour day for farmworkers in half-hour increments, reaching eight hours in 2020. The standard 60-hour workweek for farmworkers also would be reduced to 40 hours.
California’s largest agricultural interest group, the California Farm Bureau Federation, opposes the bill, contending it would eliminate jobs.
Farmers do not set prices for produce, the bureau argues, and so a hike in employer costs could only be absorbed through consolidation in the industry, greater use of automation and reductions to the variety of crops that farmers harvest in California.
“This will accelerate a trend toward mechanization wherever possible and people electing to grow commodities that don’t require lots of labor,” said Bryan Little, employment policy director for the bureau.
Assembly Bill 2757 is pending before an Assembly labor committee, with its first hearing expected in April. The bill has 17 co-authors in the Assembly, and seven in the Senate.
Allen Young covers state and city government, economic development, education and transportation.
Get Contact Information for California Farm Bureau Federation.
San Jose Mercury News
Kill high-speed rail and spend the money on reservoirs? Proposed California ballot measure sparks debate
By Paul Rogers
Supporters of a proposed ballot initiative to kill California’s high-speed rail project and use the money to build new reservoirs are racing to gather enough signatures to qualify the measure for the November ballot.
But the campaign, which is being bankrolled by San Joaquin Valley farmers, is already drawing fire from fellow farmers and environmentalists, who call it a “Trojan horse.”
Backers say the proposal is a common-sense idea, given the state’s drought and growing water needs for farms and cities. They say it will cut through red tape and finally halt the highly controversial bullet train project to focus on higher-priority, long-stalled water projects. Those include Sites Reservoir in Colusa County, Temperance Flat Reservoir on the San Joaquin River near Sequoia-Kings National Park and raising the height of Shasta Dam near Redding and San Luis Dam near Los Banos.
“This is about getting our priorities straight,” said Aubrey Bettencourt, executive director of the California Water Alliance, a group of mostly San Joaquin Valley farmers backing the measure. “People have softened on high-speed rail because they have found out it is not what they were sold.
Turned out to be a boondoggle. It’s constantly changing routes. It’s over budget. It’s not meeting its deadlines.”
On Thursday, opponents of the initiative, including Sacramento Valley rice farmers, held a news conference to blast the proposed initiative. They singled out for criticism a section that would amend the state constitution to give domestic water use the highest priority and agricultural irrigation the second-highest priority, above environmental needs such as restoring fish and wildlife populations.
“Most Californians would be shocked to discover this initiative is essentially a license to drain streams and rivers and impact fish and wildlife in California,” said Jay Ziegler, director of external affairs and policy for the Nature Conservancy. “The reality is that whatever your view on high-speed rail, this initiative is a disaster on any level.”
A poll in January by Stanford University’s Hoover Institution found that 53 percent of Californians support killing the high-speed rail project and using the unspent money on water projects, while 31 percent do not.
The “yes” campaign so far has raised $1.2 million, Bettencourt said. Backers must collect 585,407 valid signatures from registered California voters by April 26 to qualify for the November ballot. So far, they have 25 percent of that total, she said. But because the campaign has enough money to pay signature gathers, she expects it to qualify.
In November 2008, California voters approved a $9.95 billion bond measure to fund high-speed rail. The project’s cost, originally estimated at $33 billion, has ballooned to $64 billion, and delays and lawsuits from farmers and environmental groups have slowed progress, putting it two years behind schedule.
Last month, the Brown administration announced it would build the first section from the Bakersfield area to downtown San Jose, rather than beginning in Southern California. The decision was due largely to the costs of tunneling through the Tehachapi and San Gabriel mountains.
The project broke ground in the Fresno area last year, but so far no track has been laid.
The proposed ballot measure would shift the remaining $8 billion in high-speed rail bond money to a newly created agency, the State Water Storage and Groundwater Storage Facilities Authority. It also would shift $2.7 billion that voters approved in November 2014 as part of a $7.5 billion water bond to the new authority — which would be made up of nine members appointed by water agencies and local governments.
Bettencourt said the problem with the 2014 water bond is that although it earmarked $2.7 billion for storage, that doesn’t guarantee reservoirs will be built because it could be used to fund groundwater storage projects. The proposed initiative would fast-track the four large reservoir projects, providing 50 percent of their costs, which could be matched with local and federal funds, she said.
Critics say the proposed process is confusing and would set back efforts to spend the water bond money, which the California Water Commission plans to do next year after finishing cost-benefit studies.
“The results will be that these projects will be delayed, and we can’t afford to have that happen,” said Assemblyman Jim Gallagher, R-Plumas Lake.
Rice farmers in the Sacramento Valley, many of whom have senior water rights dating back to the 1800s, said the initiative could make it difficult for them to flood rice fields every winter. In places such as Sutter, Glenn and Butte counties, farmers harvest rice each September and then divert billions of gallons of water into their fields from the Sacramento, Yuba and Feather rivers to create artificial wetlands.
The wetlands provide food to millions of ducks, geese and other birds migrating along the Pacific Flyway. They also help decompose rice straw, the leftover plant matter from the rice harvests that in decades past was burned in huge plumes of black smoke until air regulations strictly limited the practice.
If farmers can’t flood their fields, as they did with 200,000 acres this winter, they have to bale the rice straw and try to sell it as cattle feed, or plow it multiple times to chop it up. Both methods are costly, said Tim Johnson, president of the California Rice Industry Association.
“There is a question about whether flooding our fields is an agricultural water use and it comes in second — or is it an environmental use that comes in dead last?” he said. “Nobody knows.”
Gov. Jerry Brown, a fervent bullet train supporter, has not taken a position on the ballot proposal, whose funders include large agricultural operations such as Harris Farms in Coalinga, Robert Brazil Farms in Hanford and Hansen Ranches in Corcoran. But last April, at a news conference in the Sierra Nevada to announce new statewide water conservation rules, Brown was asked why the state was building a bullet train when it needs reservoirs?
His reply: “The same reason why we’re building schools, repairing roads, houses, sheltering people and hospitals. Government is not just one thing. It’s many things, and we can’t stop the world and get off.”
Go to https://cawater4all.com for information on the yes campaign and www.stopthewatergrab.com for information on the no campaign.
Los Angeles Times
Bond jitters spread after Westlands Water District investigation
By Geoffrey Mohan
Jitters over a federal investigation of Westlands Water District bled over into the proposed delta tunnel project Thursday as a bond rating agency placed a negative watch on a $29.8-million bond helping to fund the controversial water diversion plan.
Fitch Ratings took that cautious step back because Westlands is the sole guarantor of a 2013 bond issued by the San Luis & Delta-Mendota Water Authority, which operates significant portions of the federal water project in the western San Joaquin Valley.
Westlands is one of 29 members of that authority, which controls more than 3 million acre-feet of water in the western San Joaquin Valley and in San Benito and Santa Clara counties.
“They were issued with 100% Westlands backing,” Fitch analyst Teri Wenck said of the water authority bonds. The rating firm has made clear that any change in the financial evaluation of Westlands would affect the rating of bonds issued by the water authority, she added.
The move comes a day after Westlands reached a $125,000 settlement with the Securities and Exchange Commission over accounting procedures that the SEC said exaggerated the district’s ability to cover its annual debt payments. The district altered its revenue ledgers to meet a threshold for a high bond rating so it would not have to raise rates for some of the wealthiest growers in the state, regulators said.
Westland’s general manager, Thomas W. Birmingham, joked during a 2010 board meeting that the adjustments amounted to “a little Enron accounting,” a reference to the massive fraud that caused the 2001 collapse of that Houston energy and commodities company, according to the SEC.
The penalty was the largest to be levied by the SEC against a municipal bond agency. Birmingham was assessed a separate $50,000 civil penalty, and the district’s former treasurer, L. David Ciapponi, received a $20,000 fine.
But it may cost Westlands much more. Fitch’s negative watch extends to six other Westland bonds amounting to $193.6 million, plus the $29.8-million bond for the tunnel project.
If Fitch takes further action to downgrade the bonds’ underlying AA ratings, it could affect the district’s cost of borrowing as well as the market for the bonds.
The authority and its members have been fighting delta water restrictions aimed at protecting the state’s fisheries, and have pushed for diversion tunnels that would shunt Sacramento River water around the ecologically fragile estuary system.
Critics of the tunnel project don’t believe that growers will be able to shoulder the cost, an argument they say has been bolstered by Westland’s questionable accounting practices.
Westland spokesman Johnny Amaral said the district would have no public comment until it consulted with its bond advisor. An officials for the water authority did not return calls for comment Thursday. On Wednesday, a district statement said the accounting procedures at issue were approved by an independent auditor.
“Westlands, Birmingham and Ciapponi determined that entering into the settlement to fully resolve the matter was in the district’s best interest,” the statement said.
At issue was a “debt service coverage ratio,” a measure of the district’s ability to collect enough revenue to meet or exceed its annual debt obligations. Because of the district’s “extraordinary accounting procedures,” that figure was 10 times higher than it would have been using conventional accounting procedures, the SEC said.
That calculation obscured expenses incurred because of water cutbacks prompted by the state’s drought and allowed the district to avoid raising rates for its clients, which include some of the biggest agricultural companies in the state, according to regulators. Westland received only 10% of its contracted allotment from the Central Valley Project in 2009, and 45% in 2010.
A public agency governed by landowners within its borders, Westlands had operating revenue of more than $120 million in 2014. It contracts with the U.S. Bureau of Reclamation for taxpayer-subsidized irrigation supplies, which it sells to growers.
Santa Rosa Press Democrat
Another threat to fishing communities
These are uneasy time for California’s commercial fishing industry.
An unprecedented delay in crabbing season is now in its fourth month, and there’s a growing likelihood that the 2015-16 season will be lost entirely.
Prospects for a bountiful salmon season aren’t much brighter.
This winter’s storms are delivering some relief to a drought-parched state, but three dry years decimated salmon runs on the critically important Klamath and Sacramento rivers, which almost certainly means strict catch limits again this year, if not a repeat of the 2008-09 closure of California’s salmon fishery. Next year probably won’t be any better.
In fishing-dependent communities from Crescent City to Monterey, residents are looking to Washington with an uneasy mix of hope and alarm.
Some financial help may be forthcoming for fishermen stuck in port by the ongoing closure of the Dungeness and rock crab fisheries if Commerce Secretary Penny Pritzker issues a disaster declaration and Congress appropriates funds requested by Reps. Jared Huffman and Jackie Speier.
However, any near-term assistance could be more than offset by renewed efforts to divert more water to Central Valley farmers and Southern California cities. If that happens, it threatens further devastation for salmon fisheries and the communities they sustain.
A bill passed by the House of Representatives would run roughshod over existing laws, science-based regulatory mechanisms and federal court rulings that protect the environmentally fragile Sacramento-San Joaquin Delta and its endangered salmon runs. The bill, sponsored by GOP Rep. David Valadao of Hanford, gives water diversions first priority and puts taxpayers on the hook for costly new dams that won’t deliver any drought relief.
Conflicts over water are nothing new in California, but Central Valley representatives glommed onto the drought to further a years-long campaign to obtain more water for irrigation.
“When science hasn’t worked, the courts haven’t worked, they’re relying on old-fashion politics,” Barry Nelson of the Golden Gate Salmon Association told The Press Democrat Editorial Board. “They’re trying to gut (environmental) standards.”
Californians have relied on Sen. Dianne Feinstein to protect them from fiscally irresponsible and environmentally unsound water grabs like the one passed by the House.
Feinstein has worked long and hard to broker a compromise serving the interests of agriculture — an important California industry — without imperiling the environment or fishing — another signature California industry.
She deserves great credit for her efforts, but fishing interests and conservation groups fear that the water bill she introduced last month lacks adequate safeguards for the Delta and the salmon whose continued existence is dependent on its restoration. We share those concerns.
Feinstein said drafting the 184-page bill was the most difficult task during her 23 years in Washington. It includes laudable elements, including investments in habitat restoration and funding for water recycling and desalination. The bill also creates a low-interest, long-term loan program for infrastructure projects supported by North Bay water and sanitation agencies.
But it also includes numerous provisions that shift the balance in favor of irrigation supplies, which is inconsistent with the state of California’s co-equal goals of providing a reliable water supply and protecting the Delta eco-system. Moreover, scientists would be pressured to seek ways to maximize pumping Delta water into the canals feeding the Central Valley and Southern California.
Many House members viewing Feinstein’s proposal as the opening bid in negotiations on a final piece of legislation that would combine elements of the House and Senate bills, so it’s hard to see how the terms can get better for fishing-dependent communities on the North Coast. But with their livelihood already in peril, those communities can’t afford to have the terms get any worse.
New York Times
On Trade, Donald Trump Breaks With 200 Years of Economic Orthodoxy
By Binyamin Appelbaum
WASHINGTON — Donald J. Trump’s blistering critique of American trade policy boils down to a simple equation: Foreigners are “killing us on trade” because Americans spend much more on imports than the rest of the world spends on American exports. China’s unbalanced trade with the United States, he said Tuesday night, is “the greatest theft in the history of the world.”
Add a few “whereins” and “whences” and that sentiment would conform nicely to the worldview of the first Queen Elizabeth of 16th-century England, to the 17th-century court of Louis XIV, or to Prussia’s Iron Chancellor, Otto von Bismarck, in the 19th century. The great powers of bygone centuries subscribed to the economic theory of mercantilism, “Wherein we must ever observe this rule: to sell more to strangers yearly than we consume of theirs in value,” as its apostle, the East India Company director Thomas Mun, wrote in the 1600s.
Now Mr. Trump is bringing mercantilism back. The New York billionaire is challenging the last 200 years of economic orthodoxy that trade among nations is good, and that more is better.
He is well on his way to becoming the first Republican nominee in nearly a century who has called for higher tariffs, or import taxes, as a broad defense against low-cost imports. And there is a good chance he would face a Democratic opponent, Hillary Clinton, who has expressed fewer reservations about trade, inverting a longstanding political dynamic.
Among Republican standard-bearers, “There’s nobody since Hoover who talked this way about trade,” said I. M. Destler, a public policy professor at the University of Maryland and the author of “American Trade Politics,” a history. For most of the last century, Mr. Destler said, such skepticism about trade had been relegated to the fringes of the Republican Party.
Mr. Trump’s mercantilism is among his oldest and steadiest public positions. Since at least the 1980s, he has described trade as a zero-sum game in which countries lose by paying for imports. The trade deficit with China, which reached $366 billion last year, makes America the biggest loser. “Our trade deficit with China is like having a business that continues to lose money every single year,” Mr. Trump told The Daily News in August. “Who would do business like that?”
During the current campaign, he has regularly advocated tariffs as the best solution.
He has promised to penalize American companies that build foreign factories. For months, his favored example was Ford, which announced plans last summer to expand in Mexico. More recently, he has called out Carrier, which is shifting air-conditioner production to Mexico from Indiana.
“I will call the head of Carrier and I will say, ‘I hope you enjoy your new building,’ ” Mr. Trump said last month. “‘I hope you enjoy Mexico. Here’s the story, folks: Every single air-conditioning unit that you build and send across our border — you’re going to pay a 35 percent tax on that unit.’ ”
In January, Mr. Trump proposed a 45 percent tariff on Chinese imports during a meeting with the New York Times editorial board. “I would tax China on products coming in,” he said. “I would do a tariff, yes.”
Economists have long struggled against the popular view that exports are a measure of economic vitality while imports are evidence of regrettable dependence.
They argue that the opposite is true.
“Economists have spoken with almost one voice for some 200 years,” the economist Milton Friedman said in a 1978 speech. “The gain from foreign trade is what we import. What we export is the cost of getting those imports. And the proper objective for a nation, as Adam Smith put it, is to arrange things so we get as large a volume of imports as possible for as small a volume of exports as possible.”
But critiques like Mr. Trump’s resonate in part because economists have oversold their case. Trade has a downside, and while the benefits of trade are broadly distributed, the costs are often concentrated.
Everyone can buy a cheaper air-conditioner when Carrier debarks for a lower-cost country, but a few hundred people will lose their livelihoods.
Pietra Rivoli, a finance professor at Georgetown University who explored the effect of increased globalization in her 2005 book, “The Travels of a T-Shirt in the Global Economy,” said Mr. Trump might be finding a receptive audience in part because the United States had provided relatively little help to workers harmed by trade.
“You have much more negative sentiment about trade in the U.S. than you do in pretty much any other wealthy country, and they’ve lost their T-shirt jobs, too,” Ms. Rivoli said. “What’s going on there is that in those countries, which are even more exposed to trade than we are, those countries have a bigger safety net.”
Mr. Trump has also accused other nations, notably Japan and China, of cheating by suppressing the value of their currencies to make their exports cheaper.
“I am all for free trade, but it’s got to be fair,” Mr. Trump has said repeatedly.
Economists persuaded governments to abandon mercantilism by demonstrating that trade barriers imposed higher prices on the masses while narrowly benefiting those sheltered from competition.
The United States largely dismantled its broad tariffs in the mid-20th century, opening the modern era of globalization. But some tariffs remain, providing a reminder of the costs and benefits. Annual imports of Chinese tires increased to 46 million in 2008 from 15 million in 2004, and American tire makers shed several thousand jobs.
So in 2009, the Obama administration, at the urging of workers’ unions, imposed a Trump-like tariff beginning at 35 percent and expiring after three years.
“Over a thousand Americans are working today because we stopped a surge in Chinese tires,” President Obama said in his 2012 State of the Union address.
The measure, however, also increased the amount that Americans spent on tires by about $1.1 billion, according to calculations by Gary Clyde Hufbauer of the Peterson Institute for International Economics. That money, had it been spent on other things, would have supported jobs in other parts of the economy.
China, moreover, retaliated by slapping a punitive tariff on American chicken parts — China is a particularly lucrative market for chicken feet — which cost American poultry exporters about $1 billion in lost sales over the same period.
Eswar Prasad, a Cornell University economist, said Mr. Trump was raising legitimate concerns. Other nations do impose disproportionate restrictions on American goods, he said. The problem, Mr. Prasad said, is the proposed solution.
“It might be that the threat of tariffs or other trade sanctions could cause American trading partners to open up their markets or drop their barriers to trade,” Mr. Prasad said. “Perhaps as a bargaining chip, it’s not necessarily so bad. But there is a risk that rather than having that positive effect, it leads to retaliation on both sides.”
Correction: March 11, 2016
Because of an editing error, an earlier version of this article stated incorrectly where Carrier will be shifting its air-conditioner production from. It is Indiana, not India.
Morgan Hill Times
Let’s hear it for Santa Clara County agriculture
By Erin Gil
It is exciting to see so many members of the community in defense of open space, and in particular, productive open space such as that used in agriculture. As a second generation farmer from Santa Clara County it is great to see. But as a grower, I wish there was more understanding of how agriculture operates safely for our community and the consumers, as well as the diverse benefits it returns to the community.
A frequently asked question comes up: “What is the health of the agricultural community?”
At first thought, you may not believe farming and ranching are doing very well. Such endeavors are more and more hidden from Santa Clara County as open space is replaced by asphalt, concrete, roof lines and other structures.
The answer is more complex for urban edge farming; but, fortunately, the county has an Agricultural Commissioner—Mr. Joe Deviney—whose forward thinking has brought about great answers to this complex question. In collaboration with ERA Economics and help from local growers and ranchers, a good answer was brought forward through sound economic analysis to quantify Santa Clara County’s Ag Value. Ag’s valuation to Santa Clara County was 8,150 jobs and $1.6 billion in economic stimulus. That’s a lot more than any of us in the industry expected.
Agriculture is incredibly responsive to the needs of the community and is currently doing very well. That’s not to say there are some large threats to the health of these industries, but for now it is showing signs of stabilization. How well is well? Here are some highlights to the report:
Santa Clara County needs to continue with the stabilization of productive open space.
When asked about land use policies, mitigation and how best to use areas for productive open space such as farming, ranching and other agricultural uses, the California Farm Bureau Federation uses language in a way that best represents growers’ and ranchers’ thoughts in the following statement: “Proposals to use agricultural land for mitigation should be considered by each county farm bureau on their own merits on a case-by-case basis. CFBF supports the use of voluntary agricultural conservation easements, when mitigation is required for farmland conversion. We oppose government mandated deed restrictions or easements acquired by the use of eminent domain. Subsequent easements granted on lands with agricultural easements should not restrict or reduce the agricultural productive capacity of the land, including crop choice.”
The efforts of notable agriculture families, such as the Chialas, is generous and real. Many counties are discovering ways to integrate and weave agriculture into the community. Santa Clara County ought to do the same. Much applause and gratitude should be lauded on those—private and public—who entertain such ideals and work toward improving our community because the environment will benefit.
How you may ask? Equally important are the ecosystem benefits attributed to open space areas. And agriculture plays a role in delivering these benefits to surrounding communities, free of charge.
Ecosystem benefits include: flood control, groundwater recharge, water quality, pollination, biodiversity and open space. These benefits are easily overlooked but have measurable values for our community.
So the next time you visit your favorite local nursery, winery, pumpkin patch or farmers market, be sure to thank them for doing great things for the economy, environment and the community’s health.
We surely love to hear it! Working towards a balanced, healthy community benefits all.
Erin Gil is a second generation farmer and owner of the Grass Farm in Morgan Hill. To read the report “The Economic Contribution of Agriculture to the County of Santa Clara,” visit sccgov.org/sites/ag/news/Documents/AG_Economic_Report_WEB_Final.pdf.