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California budget cuts could put stranglehold on agriculture

It is not a question of whose ox will be gored in California's titanic tax trimming task of coring almost 30 percent — more than $30 billion — in expenditures from the state $99 billion state budget to meet revenue shortfall.

It's a matter of who will spill the most blood. No segment of government — counties, cities or schools — is being spared.

However, economically struggling California agriculture contends it is being asked to shed more than its share.

Currently on the butcher table are:

  • $39 million in state funds to reimburse counties for farmland in the Williamson Act, a long standing California law that allows farmer to avoid high property taxes for a decade and continue to farm on land valuable for development.

  • $6.5 million from California Department of Food and Agriculture's budget that will impact programs like border inspections to keep out exotic pests; noxious weed abatement; its Buy California campaign and other areas.

  • An increase in the mill tax on pesticide sales from the current .0175 to .025 cents per dollar of wholesale pesticide sales to fund the California Department of Pesticide Regulation's $53.3 million 2003-04 budget. DPR would no longer receive state budget general funds. The mill tax assessment amounts to $12.5 million in more taxes on agriculture.

  • “Fee” increases of a combined $24 million between the state Air Resources Board and the State Water Resources Control Board. Not all of this would fall on agriculture, but much would.

  • Proposed 30 percent cuts in the University of California Cooperative Extension budget and a 20 percent cut in the UC ag research budget that would “decimate” the network of UCCE county-based advisors and research stations.

‘To get mugged’

“The citizens of the state of California are going to get mugged in making up this budget shortfall,” said Steve Beckley, president of the California Plant Health Association. “It is not a pretty picture.”

“All we are asking for in agriculture is an equal opportunity mugging,” said Beckley.

The politicking, posturing and palavering continues in Sacramento as Gov. Gray Davis and the legislature try find a way to raise the revenue shortfall. Even that is a debatable figure.

“The governor says $35 billion; legislative analysts say $26 billion and the Republicans say its $15 billion. Take any number you want and it's an absolute wreck,” says agricultural lobbyist George Soares, a Hanford, Calif., attorney and dairyman.

Making the wreck even more difficult to resurrect is the state's workers' compensation program.

“The first installment for workers compensation for my family's dairy in Hanford this year was equal to the total bill four years ago,” said Soares. “That represents an increase 600 percent in four years.”

In the throes of the budget shortfall, now the state government is considering asking workers' comp policy holders to pay the state's cost of administering of the program to the tune of $90 million per year.

‘That is the only conversation going on about what to do with workers’ compensation…not reforming workers' compensation, but to make it even harder for agriculture and all businesses in California to operate,” said Soares.

Added state fees

State government is trying to partially clean up the wreckage with fees increases for services it provides, like the workers' comp administration proposal. This fee increase approach to gain revenue is called “the victims pay” system or punish those who are regulated.

“These are taxes, but they call them fees. If they call them taxes rather than fees, there would have to be public hearings and votes. They don't want that,” said Soares.

California is not alone in a budget crisis. A majority of the states in America are facing similar nightmares. What sets California apart is the shortfall size. It is the largest in the nation. Using Davis' estimate, the California shortfall alone represents more than two-thirds of the total Florida state budget and 10 times the state budget for Mississippi.

California's leading industry is agriculture, but politically conservative farmers and ranchers not too many years ago had little influence in the state capitol where the legislature is more liberal that the general public, said Soares.

However, Soares' law firm of Kahn, Soares and Conway organized a coalition of agricultural organizations that has raised the influence level for agriculture with Davis and key urban as well as rural legislators. The Ag Presidents Council, made up of leaders of more than two dozen organizations Soares' law firm represents, triumphed two years ago with its political prowess in winning passage of a $100 million agricultural “tractor” tax break package.

Credible message

That victory came by “providing a credible message from credible people,” said Soares. And, that is expected to carry through in the current state budget crisis when agriculture battles to lessen its burden in meeting the budget shortfall.

“There will be more tractor tax victories in the future, but they will be more challenging and harder to come by in the current economic and political climate in Sacramento,” he said.

None of the challenges will be greater than paring back the draconian cuts proposed by the governor in the UC Agricultural and Natural Resources Programs, one of the cornerstones of California's $27 billion agricultural industry.

“Cooperative Extension will not exist as farmers and ranchers know it today if these cuts go through,” said Ron Vargas, Madera County UCCE county director and farm advisor.

If the cuts are not modified, UC vice president Reg Gomes said UC will be forced to close offices and facilities, begin layoffs and eliminate core Cooperative Extension programs.

“The network of UCCE county-based advisors will be decimated,” said Gomes.

“We will no longer be able to respond to threats of bioterrorism, exotic pests and diseases and natural disasters,” said Gomes.

“Everything will be on the table” if the proposed cuts go through. “Statewide programs such as the Agricultural Issues Center, integrated pest management, sustainable agriculture, water resources, nine research and Extension centers; Extension offices and programs in every county” are on the butcher's block, said Gomes.

Position cuts

Ninety-four percent of the UCCE budget is for salaries and there is no where to cut expenditures except in eliminating positions.

A little more than 10 years ago Cooperative Extension went through a similar budget crisis. To solve that it, the university offered early retirement to veteran advisors.

“There is talk of doing that again with about 90 advisors now,” said Vargas. “However, if everyone eligible took that option that would account for only two-thirds of the proposed 30 percent cut.”

That would mean the university would have to resort to layoffs to meet the budget.

Vulnerable would be a group of what Vargas called a “group of young advisors hired in the past five years who have an excellent background in research — an excellent foundation upon which to build the future of Cooperative Extension.

“I had not planned on retiring at this point in my career,” said the 60-year-old Vargas, “but as an organization we may have to look at getting on top of any budget cuts with retirements to at least save the foundation of young advisors we have now to build Extension back up if the economy ever turns around.”

Growers rallying

Farmers are beginning to rally for preservation of Extension by mitigating the draconian cutbacks. Craig Pederson, Kings County, Calif., farmer and newly elected chairman of the California Cotton Growers Association said cutbacks for Cooperative Extension would have a dramatic impact on California agriculture and pledged the support of the association to reduce the size of the cuts.

Allan Corrin of Corrin Produce Sales, Reedley, Calif., said Cooperative Extension is not only indispensable to California agriculture, but to the American consumer.

“It is the consumer who is benefiting from what Cooperative Extension does in research. They are getting better food at much less cost than they would do otherwise,” said Corrin.

Corrin has been in the fresh fruit and produce business for decades and cites innumerable research efforts than have benefited his industry.

“None of us in farming are equipped to do the kind of research into such things as drip irrigation, pest management, post harvest handling, pruning and the like,” he said. “We have come to rely on Extension for that kind of research.”

He also cited Cooperative Extension research in redesigning table grape packaging to reduce damage and use of mulch on strawberry beds to save money and increase yields.

UC research on controlling exotic pests like vine mealybug and glassy-winged sharpshooter keeps grape growers in business, said Corrin.

Extension for all

“Everybody says Cooperative Extension is for the farmer, but it is not. It is to make farmers more efficient to maybe make a buck and the consumer to have inexpensive food,” he said.

Merced County, Calif., cotton and processing tomato producers Daniel Burns of Dos Palos said it would be “terrible” if Cooperative Extension was dismantled.

“I have worked with Bill Weir (now retired Merced County farm advisor) for 18 years on this farm. Bill and Ron Vargas have brought so much to the cotton industry in the northern region of the San Joaquin Valley. A 30 percent budget cut in Cooperative Extension would be devastating to California agriculture,” said Burns.

Kern County, Calif., almond and cotton producer Fred Starrh has long relied on farm advisors.

“We now have an irrigation research project on our farm with Kern County advisor Blake Sanden. It involves water-use efficiency — a tremendous concern for growers as we deal with a dwindling irrigation water supply,” said Starrh. “Losing research like that would make it hard for us to survive.”

“We rely on the validity of Cooperative Extension research. It is absolutely essential to have third party validation on new technology and products,” said Starrh. “Today it is imperative that farmers improve their capabilities to produce at a lower cost and Cooperative Extension is a big part of getting that done.”

Need the science

“The university and Cooperative Extension make science available to family farmers,” said Soledad, Calif., wine grape grower Richard Smith. “Like most family farmers, we don't have the resources to develop the kind of science we need.”

Since World War II, American agriculture has made huge strides in productivity through chemistry, plant breeding and with fertilizers. “American agriculture has made those tremendous economic strides, and land grant colleges and the Extension concept have been a big part of that.”

While Smith believes agriculture has made great progress, it is turning into a new direction, to “more sustainable management concepts, and we have to have good information from universities and Extension to make that happen.

“I don't think we have done a bad job in farming, but changes are coming and we need to make those changes and still be able to pay the bills,” he said.

“It is important for the governor and the legislature to look at the big picture for California agriculture…and not throw out the baby with the bath water.

“Cooperative Extension enjoys strong support statewide. Land grant colleges and Extension have an obligation dating back to the 1860s to do research to help agriculture feed a nation,” said Smith. “Dismantling that is something I do not think the public will support.”

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