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Wide range of issues on pistachio radar screen

Wide range of issues on pistachio radar screen

On the Western pistachio industry radar screen – a wide range of issues from food safety to exports to India. 2012 farm bill deliberations - federal funds may be cut which support the promotion of more than 30 U.S. commodities. Iran Sanctions Act good for Western pistachio industry. Gov. Jerry Brown may be the “right person” to help solve California’s fiscal crisis. 

As Western pistachio farmers and processors engaged in a full-court press last fall to harvest and process an all-time record crop, Congress successfully nailed a half-court shot that will net stricter food safety regulations on crops grown in the United States.

“Things that happen in the halls of Congress can and will have an even bigger impact than just about anything else in your operation,” said Richard Matoian, executive director of the Western Pistachio Association (WPA). “Whether it’s food safety, legislation, regulation, immigration, or pesticide regulation, any of these issues can affect you.”

Decisions rendered far from the fields of agriculture continually impact farmers and ranchers — and that will not change. Attorneys who represent the WPA in the California Legislature and Congress laid out a mind-numbing list of issues during the recent U.S. Pistachio Conference that will impact the industry and agriculture overall for years to come.

On national and international issues, Bob Schramm of Schramm, Williams, and Associates based in Washington, D.C., praised the Iran Sanctions Act passed by Congress for the law’s positive impact on the U.S. pistachio industry. Iran is the largest pistachio producer in the world followed by the United States. The law prohibits the sale of Iranian pistachios and other products in the U.S. 

The WPA is part of a coalition representing agriculture as Congress prepares to pare down federal spending in the 2012 farm bill. One program likely to face fiscal reduction is the federal Market Access Program (MAP).

MAP uses Commodity Credit Corporation funds to assist U.S. producers, exporters, private companies, and other trade organizations in promotional activities for U.S. agricultural products. More than 30 commodities are supported by MAP dollars ranging from pistachios to grapes to catfish.

“MAP is truly under attack because of the deficit and the debt,” Schramm said. “At some point we will have to look at taking a hit on MAP in my opinion. I think there is a 50-50 chance it won’t happen until the 2012 farm bill is enacted.”

The 2010 FDA Food Safety Modernization Act or FSMA signed into law by President Obama last December painted a target on the back of pistachios and other crops. The Food and Drug Administration, USDA, and the Department of Homeland Security are charged with writing the law’s regulations to improve food safety in commodities.

“The regulations will be very comprehensive,” Schramm noted. “We will comment on these regulations to make sure they don’t make operating under the new law too difficult and counterproductive.”

In part, the regulations will place commodities into food safety high and low risk groups. Leafy greens, for example, are expected to fall into the high risk group.

“We want to make sure the pistachio is a low risk food,” Schramm said.

Agriculture should sleep with one eye open as the regulations are developed. Typically bureaucrats write regulations based on the groundwork laid out by U.S. House and Senate committee reports, plus a joint House-Senate report. The FSMA lacks the House-Senate report.

“It’s broadly written so we will have to watch this very carefully,” Schramm noted.

Pistachios: 98 percent California-grown

About 98 percent of the U.S. pistachio crop is grown in California with the balance grown in Arizona, New Mexico, Texas, Nevada and Utah. About 70 percent of the U.S. pistachio crop is exported.

The U.S. pistachio industry has a stake in proposed U.S. trade agreements with South Korea, Columbia, and Panama under consideration by Congress. 

“I believe the U.S.-South Korea trade agreement will pass in 2011,” Schramm predicted. “We were able to secure a zero duty for raw pistachios as soon as it is implemented.”

Worldwide trade deliberations are underway in the Doha round of the World Trade Organization talks where market access, tariffs, subsides, and trade rules for agricultural and other products are under negotiation. The Doha round offers the U.S. pistachio industry the opportunity to gain market access in India.

The WPA has sent a letter to Indian officials suggesting a 30 percent reduction in the country’s import tariff would actually generate more revenue for India’s treasury over the long term. Schramm says this proved true in previous negotiations with China.

Turning to California issues, attorney George Soares, a dairyman and managing partner in the firm Kahn, Soares & Conway, Hanford, Calif., discussed the state’s ongoing budget woes and the state’s repeat governor, Jerry Brown.

“We are in trouble in California (financially) and we’ve got to get down to it,” Soares said. “In some ways, Gov. Jerry Brown may be the right person for the time relative to the budget issue. I don’t know if he is the right person at the time on labor issues.”

California’s fiscal woes are reflected in the nation’s second highest unemployment rate, 12.6 percent. The state ranks last nationally in job and business growth. Soares says agriculture and other industries are critical components to California’s recovery.

“Agriculture is the primary driver in this economy,” Soares told the crowd. “We have the most fertile soil and the best climate … plus gas, oil, minerals, and timber. Yet we have so many regulations that restrict the use and development of the wealth.”

Agriculture’s challenge, he says, is to work toward the elimination of some government burdens so agriculture can successfully operate.

Soares discussed California’s changing ethnic population. In 2000, California’s population was 47 percent Caucasian and 32 percent Hispanic. Ethnicity is expected to flip in 2050 with a predicted 52 percent Hispanic and 26 percent Caucasian population. The ethnic shift will bring different attitudes into California politics.

Soares noted about 70 percent of Latino voters voted for Jerry Brown. With an open primary in 2012, Soares predicts more moderates from both major parties will run for office. Soares says future legislatures will likely include lawmakers who actually “talk with one another” instead of dealing with extremes (opinions).

With the ethnic change, agriculture will need to better communicate with lawmakers. He said agriculture has a tendency to talk about its “workers.” The rural mindset needs to change from the term “workers” to “employees.”

Agriculture also needs to toot its horn more in its support of farm employees.

“In the last 10 years, California strawberry growers put up $1 million to provide scholarships for the children of migrant farm workers,” Soares said. “Many commodity industries have a wonderful story to tell and many times we just don’t tell it. I think we have to be a lot better in communication and self help. We have to understand the ethnic diversity in our industry.”

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