Friday, May 29, 2015

Group asserts fast-track trade bill will kill jobs

An Oregon group asserts the fast-track trade legislation being debated in the House of Representatives would kill as many as 1,400 local jobs.

From the Oregon Fair Trade Campaign:
Labor advocates shared a report with U.S. Representative Kurt Schrader’s office today to warn that his district would be giving up thousands of jobs by approving the Trans-Pacific Partnership (TPP) trade agreement without safeguards to prevent currency manipulation by foreign governments. The congressman recently said he intends to support “fast track” legislation that would allow the TPP to be rushed through Congress without currency protections.

“Rep. Schrader has said that it’s imperative that the TPP address currency manipulation to protect American workers, businesses and farmers. Now that it’s clear that the TPP would allow this unfair trade practice to continue, he should oppose giving the job-killing pact a rubber stamp,” said Elizabeth Swager of Oregon Fair Trade Campaign.

The TPP is a proposed twelve-nation trade pact that would set rules governing approximately 40% of the global economy. Last week, the U.S. Senate approved legislation to fast track the TPP that failed to include the currency safeguards that Rep. Schrader and a bipartisan majority of other House members said were necessary in a June 2013 letter to the President. The House is now considering the bill.

A recent study by the Economic Policy Institute found that the United States has lost nearly 900,000 jobs due to currency manipulation by prospective TPP partner, Japan, alone. The study found that Japanese currency manipulation has cost Oregon's 5th Congressional district 1,400 jobs, and 9,400 jobs statewide.

“If trade negotiators were serious about creating American jobs through the TPP, one of the first things they would have insisted upon is an end to currency cheating that prices Oregon's exports out of the market,” said Greg Pallesen of the Association of Western Pulp and Paper Workers. “A bipartisan majority in the House, including Rep. Schrader, insisted that this was a problem and trade negotiators told them tough luck. This should be an easy call for Rep. Schrader, but he got it wrong by leaving Oregon's jobs unprotected.”

Last month constituents delivered a letter signed by over 2,000 organizations across the country urging his to oppose the fast track legislation.

Thursday, May 28, 2015

Q&A with Prof. Houk about north state ag economics

There's quite a bit of interest around the state in an economic study recently completed by Eric Houk, an ag business professor at Chico State. As I reported this week, Houk found that agriculture has boomed in northeastern California over the last decade and now accounts for nearly 1 in 5 jobs and 17 percent of all economic activity in the region.

Some of my sources in the San Joaquin Valley have taken notice in Houk's conclusion that ag accounted to nearly 7 percent of the state's total value added in 2013 and contributed 7.6 percent of the state's jobs. Many media reports have said agriculture only contributes about 2 percent of the gross state product, based at least partly on figures from UC-Davis' Agricultural Issues Center.

Here is the Q&A I did via email with Professor Houk for my story.

What would be the most important takeaway that people should glean from the study?

I think there are two major things I want people to take away from the report. First, I want them to realize how “Agriculture” includes a lot more than farm production. We often see a focus on production values, but we need to think about agriculture in a much broader way and include agricultural production, processing, and related activities. The second thing I want people to get from the study is understanding how the economy in some regions is more dependent upon agriculture than others. In this report I focused on northeastern California and I included some statewide comparisons so the reader can see how much more dependent northeastern California’s economy is on agriculture than the state as a whole.

To what extent do you think the drought has impacted the numbers since the study period?

2013 was a drought year and total production was likely impacted, but isolating these effects is difficult. The top three commodities in this region in terms of total value of production is Rice, Walnuts, and Almonds. A common response to a lack of water is land fallowing/idling, but in the case of Walnuts and Almonds this is not an option. As a result, these producers were unlikely to have reduced acreage very much. Instead they probably faced higher irrigation costs due to increased groundwater pumping or needing to purchase/lease water from other sources. Since Rice is an annual crop we did see some land fallowing in 2013. Drought induced land fallowing will decrease the total value of rice production in the region, but relatively strong rice prices also would have contributed to adding some acreage and the higher prices would help offset the effects of land fallowing to some degree.

You mention that your study differs from a UC Agricultural Issues Center economic study in terms of methodology. What did you do differently to arrive at the figures you cite?

I think the methods would have been relatively similar, but we probably defined “Agriculture” in slightly different ways. Once we defined the direct level of economic activity for agriculture, we both used IMPLAN to capture the multiplier effects (indirect and induced effects). The Measure of California Agriculture report states “Including multiplier effects, California farms and closely related processing industries…” contribute to the economy in several ways, but I was never able to see exactly which sectors of the economy they included as “closely related processing”. I assume we would have identified the same farm production sectors and most of the same agricultural processing sectors. However, I also included “Agricultural Related” activities like farm machinery manufacturing, support activities for agriculture, etc. and it does not appear that they included those as direct effects. These types of economic activities are typically part of what we would call the Farm Service Sector and I included them as part of the overall “Agriculture Industry”. The approach I used was more consistent with a report by English, Popp, and Miller (2013) that was used to estimate the economic contribution of agriculture to the Arkansas economy.

What I find interesting is that my statewide results are not that different from the UC AIC highlight report for 2009, but with one major difference. The UC AIC Highlights opens with the following sentence “Including multiplier effects, California farms and closely related processing industries generate 6.7 percent of the state’s private sector labor force (including part-time workers), 1.3 percent of the Gross State Product (GSP) and 6.1 percent of the state labor income (2009).

In terms of employment (7.6% versus 6.7%) and labor income (7% versus 6.1%), we are somewhat similar. However, when it comes to the percentage of Gross State Product I estimated it at 6.8% while they stated 1.3%. I am still confused how they would have gotten 1.3% of Gross State Product if they actually included processing and multiplier effects as they indicated. I was not able to find the detailed report that was used to create the updated highlights report for 2009, but they do have the full detailed report for the 2002 MOCA available online. Table 5-5 in that report summarizes the overall economic impact of CA Ag production and processing for 2002 and when I look at those numbers (total value added including direct, indirect, and induced relative to the total value added by the California economy) I get something like 6.5% in 2002. This is much more consistent with what I estimated for 2013.

Coincidently, if you look at my report and focus only on “Agricultural Production”, ignore Processing and Ag Related sectors along with the multiplier effects (Indirect and induced effects), I get 1.4% which is very similar to their 1.3% estimate. It makes me wonder if the 1.3% estimate actually includes processing and multiplier effects, I haven’t reached out to authors to try and confirm this.

I guess the potential concern here is if this 1.3% number is being used by the press to potentially minimize the role of agriculture in the state…


The photo of Professor Houk is courtesy of the Chico State College of Agriculture's website.

Wednesday, May 27, 2015

Water rule won't burden farmers, EPA chief says

Federal officials say the finalized Clean Water Rule unveiled today won't place new burdens on farmers, whom the U.S. Environmental Protection Agency's chief referred to as "America's original conservationists."

The rule will only protect waters that have historically been covered under the 1972 Clean Water Act and doesn't interfere with private property rights or address land use, EPA Administrator Gina McCarthy said. It also doesn't apply to any ditches that don't "act as tributaries," she said.

"This rule will not get in the way of agriculture," McCarthy said during a news conference on the banks of the Anacostia River in Washington, D.C. "It specifically recognizes the crucial role that farmers play."

Beltway media outlets attended the news conference in person, and many other reporters (including me) called in to a teleconference that McCarthy and other officials held from the site.

McCarthy and Assistant Army Secretary Jo-Ellen Darcy told reporters the EPA and U.S. Army Corps of Engineers received more than 1 million comments on the rule, which builds on the 1986 federal definition of "waters of the United States." The agencies sought to redefine waters administratively after a proposal in 2009 to change the definition of "navigable" waters in the Clean Water Act languished in Congress.

Asked to respond to farm groups' criticism the agencies have mounted more of a public relations campaign than an honest outreach effort, McCarthy said the government simply used social media to disseminate information as other entities would.

"We did not cross any legal lines," she said, adding that regulators made "substantial changes" to the rule after hearing feedback in more than 400 meetings with individuals and organizations.

My colleague Mateusz Perkowski examines what will happen next now that the final rule is out. Keep an eye out for our continuing coverage at CapitalPress.com. (The photo of EPA administrator Gina McCarthy is courtesy of the Associated Press.)

Ranchers' groups blast new EPA water rule

Two prominent ranchers' groups are roundly criticizing the finalized Clean Water Rule unveiled today by the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers.

From the National Cattlemen's Beef Association and Public Lands Council:
“Nothing left unregulated” is the apparent motto of the Environmental Protection Agency. Today, the Agency finalized its “Waters of the United States” proposed rule, which unilaterally strips private property rights and adds hundreds of thousands of stream miles and acres of land to federal jurisdiction.

Under the guise of clarifying the Clean Water Act, the EPA and the Army Corps added ambiguous language to the law that leaves regulation up to the subjectivity of individual regulators across the country. By law, the EPA must read and consider all comments submitted on the proposed rule, but only six months after receiving over one million public comments on the proposal, EPA has finalized the rule. Philip Ellis, National Cattlemen's Beef Association president, said this is a clear indication there is no intention of considering the concerns of those most impacted by the rule.

It shouldn’t be a surprise, however, that a flawed rule would come from a flawed process. Not only did the EPA write the proposal expanding the reach of the Clean Water Act without input from agriculture, the Agency implemented their own grassroots lobbying campaign to drown out the concerns of private property owners. The tax-payer funded campaign was promoted through social media channels and called for people to share EPA’s oversimplified and misleading talking points.

“The former Obama campaign officials that received political appointments at EPA are apparently putting their activist knowledge base to use,” said Ellis. “Soliciting endorsements and support is a far cry from simply educating the public, as EPA officials claim.”

The Agency even went a step further during a press conference when Administrator McCarthy called the concerns of cattlemen “ludicrous”. This doesn’t sound like an Agency interested in rural America at all. It’s an Agency with an agenda.

In fact, the EPA used maps of waters and wetlands throughout the country that detailed the extent of their proposal, but it wasn’t until the House Committee on Science, Space and Technology was doing research in preparation for a hearing that the maps were discovered. The taxpayer funded maps, presumably kept hidden for years, painted an “astonishing picture” of what EPA intended to regulate, as Committee Chairman Rep. Lamar Smith (R-Texas) explained.

“The EPA has been spending taxpayer dollars employing a grassroots lobbying campaign, hiding information, dismissing concerns from stakeholders, and holding closed-door meetings with environmental activists,” said Brenda Richards, Idaho rancher and Public Lands Council president. “There is no question that this rule will infringe on private property rights and usurp state authority over land and water use. Ambiguous language included will only serve to further jam courtrooms across the country with jurisdictional challenges.”

While NCBA and PLC are reviewing the details of the final rule, the entire process has been flawed and must be set aside; the final rule poses an unnecessary threat to private property owners and cattle producers across the country. The only fix is to start over with all stakeholders’ input and direction from Congress.
Watch for our continuing coverage of this issue at CapitalPress.com.

Tuesday, May 26, 2015

NCBA applauds Senate passage of trade authority

Count the National Cattlemen's Beef Association among groups that are happy about the U.S. Senate's passage late last week of the trade promotion authority bill.

“This vote by the Senate is a clear indication of the support that exists nationwide for future free trade agreements," NCBA president and Wyoming cattleman Phillip Ellis said in a statement. "The U.S. market is already one of the most open markets in the world, and to continue to grow demand for U.S. beef, we must continue to negotiate tariff elimination worldwide. I urge the House to follow the lead of the Senate and pass Trade Promotion Authority legislation.”

Meanwhile, U.S. Agriculture Secretary Tom Vilsack issued the following statement:

"Today the Senate helped move America closer to securing responsible agreements that open markets for America's farmers, ranchers and agribusiness and create jobs and improve wages across the country. Over 70 organizations representing America's farmers and ranchers, and past secretaries of agriculture in both parties dating back to the Carter Administration all support trade promotion authority because export sales are vital for U.S. agriculture. Last year, agricultural exports totaled more than $150 billion and for many of our products, foreign markets represent half or more of total sales. Those exports supported approximately 1 million U.S. jobs last year. The economy is strengthened and better paying jobs are created in rural America and communities throughout the country by the additional economic activity that flows from expanded farm and food businesses.

"Standing still is not an option. Our farmers and ranchers face exorbitant tariffs and others barriers in important foreign markets, and if we do not act to maintain and gain market share in these places, our competitors will. U.S. agriculture's interests are best served by ensuring America is at the table with strong negotiating authority."

My colleague Carol Ryan Dumas is working on a comprehensive report of agriculture's reaction to the trade bill's developments. Watch for her story at CapitalPress.com.

Friday, May 22, 2015

Chico State study details ag's north state role

From Sarah DeForest at California State University-Chico:
The Agribusiness Institute at California State University, Chico has released the second in a three-year series of reports detailing the economic contributions of agriculture to the North State economy. Nearly one in five jobs in northeastern California and 17 percent of all economic activity in the region are connected to agriculture, according to the report.

The report, written by agricultural business professor Eric Houk, covers economic activity in Butte, Colusa, Glenn, Lassen, Modoc, Plumas, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity and Yuba Counties in 2012. The Contribution of Agriculture to Northeastern California’s Economy in 2013 is supported by a three-year grant from the Agricultural Research Institute to quantify the significance of agricultural production, processing and related industries to the overall economy of northeastern California.

The full report is available online.
In his introduction, Houk explains the reason for the study:
Although agriculture has played a major role in shaping the landscape and stimulating economic growth in Northeastern California, no other studies have focused exclusively on this region of California. While agriculture contributes to the economy through numerous
direct agricultural activities, it also plays an important role through its interactions with other economic sectors.
I've spoken via email with Professor Houk about his study. For my story, check CapitalPress.com soon.

SPI gives out more than $630K in scholarships

Sierra Pacific Industries has handed out more than $630,000 in scholarships this year to the children of its employees, the company announced today.

From SPI:
The Sierra Pacific Foundation, the philanthropic organization founded by the Emmerson Family, recently marked its thirty-sixth year in granting scholarships to dependent children of Sierra Pacific Industries’ employees.

This year, an amount in excess of $630,000 has been awarded to 247 students as they attend colleges, universities and trade schools during the 2015-2016 school year. Qualified recipients are eligible for the scholarship for four years and are sometimes granted a fifth year based on their school and their degree program.

“We believe that by helping these outstanding young people pursue their dreams and become tomorrow’s leaders, we are investing in the future. Our family is very proud of this program,” said Carolyn Emmerson Dietz, Foundation President.

The Sierra Pacific Foundation was founded in 1979 and to date has donated over $5 million dollars in scholarships. In addition to scholarships, the Foundation contributes to youth activities and other organizations in the communities where Sierra Pacific Industries operates. Sierra Pacific Foundation is the main contributor for the Ida Emmerson Hospice House that is being built in Eureka, California with a total contribution of $500,000 and has also made a $1 million contribution over five years to the One Safe Place shelter for victims of abuse in Redding, California.

Siskiyou CattleWomen host annual education day

Yesterday I took a trip into the high country, which was getting some much-needed rain. I was covering the Siskiyou County CattleWomen's 22nd annual ag education day at the Yreka fairgrounds, which drew about 350 fourth-graders from around the region.

In the photos, from the top: Kids at a Siskiyou County Farm Bureau-sponsored booth hosted by ranchers Ryan and Jennifer Walker learned about the benefits of farmland in capturing water runoff; and Tim Smith of Fawaz Farming in Scott Valley was having the youngsters figure out how much hay could be hauled off in a Harobed truck.

For my full story, check CapitalPress.com soon.

Wednesday, May 20, 2015

Valley in crisis as drought, restrictions take toll

Recently I spent a week in the San Joaquin Valley, where I took these photos as growers have been denied surface water have had to take citrus groves and fields out of production.

In the photos, from the top: A bulldozer rips out an orange grove south of Fresno; Dinuba grower and packer Jay Gillette takes stock in his retired orchard; a dry irrigation canal meanders past a citrus packing plant; Mendota area grower Mark Turmon holds an irrigation line being taken out of a fallowed field; Roger Isom of Western Agricultural Processors Association looks at the diminished nut set on a water-starved almond tree; and a field is dragged at a dairy just south of Merced.

A special thanks should go to Roger Isom and to Joel Nelsen and Bob Blakely of California Citrus Mutual, who arranged and facilitated my interviews with more than a dozen growers, packers, processors and other industry reps.

A pall hovers over the San Joaquin as water shutoffs and sinking aquifers threaten to turn what has long been the nation's most productive agricultural region into a hodgepodge of veritable ghost towns and abandoned fields.

The crisis has been worsened by the drought, which has forced more than 2.8 million acres statewide -- a large portion of which is in the Central Valley -- to go without surface water again this year, according to the California Farm Water Coalition.

But growers and industry groups trace the decline of ag in the San Joaquin back to more than two decades ago, as the Central Valley Project Improvement Act and subsequent environmental policies greatly restricted pumping from the Sacramento-San Joaquin River Delta.

My centerpiece story, along with a companion piece on ag's role in the economies of the Central Valley and California as a whole, will lead this week's issue of Capital Press. Watch for them online at CapitalPress.com within a matter of hours.