Citrus image via California Citrus Mutual
Written by David Castellon
New environmental regulations, water-saving rules, crop-protection requirements and a state-mandated increase of the minimum wage for workers are expected to collectively cost California citrus growers about $203 million a year.
That amounts to an average cost of $701 per acre of citrus, according to a study commissioned by the Visalia-based Citrus Research Board, a grower-funded program funding citrus-industry research.
“Estimates of cost increases are calculated by combining available data with reasonable assumptions,” states the report prepared by Bruce A. Babcock, a professor in the School of Public Policy at the University of California, Riverside.
“Regulations that increase the cost of producing citrus in California have the potential of reducing the competitiveness of the California citrus industry relative to other crops that are grown in California and relative to citrus grown in other states and in other countries,” he wrote.
“The potential loss in competitiveness will be realized for regulations that apply only to California citrus or that disproportionately impact California citrus.”
Among the report’s estimates:
– Compliance with environmental regulations not associated with groundwater sustainability is estimated to increase costs for citrus growers in the state by a collective $17.7 million, or $67 per acre.
– New labor requirements will increase costs by $112 million, or $357 per acre, once they are all phased in over the next few years.
– Control of Asian citrus psyllids and the bacteria they can spread, huanglongbing — or “HLB” — will increase costs by $65 million, or $248 per acre, if area-wide treatment controls are extended to all citrus-growing regions of California, which the researcher deemed likely.
– The costs of training farmers and their employees to be compliant with the various rules and regulations, alone, are estimated to total $7.5 million, or $29 per acre.
“When the cost of citrus at store level gets too expensive, consumers look for lower-priced fruit. This UCR report paints a clear path for policy makers, if their goal is to drive the citrus industry out of California and onto off-shore production areas,” California Citrus Mutual President Joel Nelsen said in press release.
Exeter-based Citrus Mutual is a nonprofit trade association representing about 2,500 California commercial citrus growers.
But these estimates in the CRB report may not accurately reflect the costs citrus growers may face.
“For some regulations, there simply is insufficient data available to calculate the costs of regulation,” says the report, which cites as an example that calculating the maximum cost of the state’s new overtime regulation for ag labors were done by assuming that the workers work 60-hour weeks and 10-hour workdays, no new workers are hired and workers work the same number of hours they did before the regulation and get paid 20 hours per week in overtime.
“But this is an unrealistic scenario, because most workers do not work 60 hours per week, and growers would likely try to hire additional workers and cut total labor hours in response to the regulation,” Babcock wrote.
In addition, his report states, “By 2040 groundwater basins in California must be managed on a sustainable basis,” in which farming operations likely would be restricted in how much water they could draw from wells — a first in California — and, in some cases, fields might have to go fallow.
As to calculating the costs of complying with the new regulations, Babcock wrote, “It will not be possible to calculate the impact of SGMA [Sustainable Groundwater Management Act] until each basin’s groundwater sustainability plans have been finalized.”
See the full report online at https://bit.ly/2MMrSrM.cit