The Center for Agricultural Business (CAB) at California State University, Fresno plans to seek input from California agricultural producers on how government regulations affect their production operations.
The information will be used in a broad study comparing air, water and other standards in California with those in other states. Leading the project is CAB Director Mickey Paggi. He is joined by Jay Noel, director of the California Institute for the Study of Specialty Crops (CISSC) at California Polytechnic State University, San Luis Obispo. Also assisting in the work is CAB senior research economist Fumiko Yamazaki.
The research effort was prompted by a growing sense in certain segments of the agricultural industry that California is perhaps no longer the best place to do business.
“California growers, processors and distributors must comply with myriad of rules from local, state and federal levels, regardless of the type of farming, ranching or agriculturally-related business they operate,” Paggi said.
And it seems other states have taken note. For example, at the World Ag Expo in Tulare, one of the major annual agricultural events in California, states such as Texas, South Dakota, Idaho, Iowa and Oregon have sponsored booths in the dairy exhibit area.
“They are hoping to draw California’s capital and labor-intensive dairies to their ‘farmer-friendly’ states. Lower regulatory costs are a key selling point,” Paggi noted.
The CAB research team believes that policymakers at all levels should be made aware of the effects of regulations on producers’ profit margins. If a tipping point of cost versus profit is breached, California may lose those producers, along with their valuable contributions to the state’s economy.
According to Paggi, specific objectives of the study will be to compare standards that affect California agricultural businesses with the standards in other states that have similar specialty crop production. The researchers will develop case study reports of compliance costs for selected California specialty crops and compare them to like crops in the other states.
Specific codes to be examined include those addressing air quality, water quality, workers’ compensation and pesticide application.
The current study is a follow-up to work that CAB and CISSC already have done in this area. Last year the center published a report addressing the effects of state regulations affecting California citrus producers. Among other things, that study found that producers’ estimated time spent addressing compliance issues rose from 7.31 percent in 1999 to 10.27 percent in 2004, a 40-percent increase. That same study also showed direct costs of code compliance rising, in some cases significantly.
The current study will provide the latest information available and should be a useful tool for regulators, Paggi said.
“We want to make the findings of this study widely available to the public, to agricultural producers and producer organizations and to policymakers in order to provide more complete information for policy development regarding these issues for California agribusiness,” he said.
The researchers anticipate approximately 15 months will be needed to gather, organize and analyze all the data. Results will be disseminated next summer through CAB, CATI and the California State University Agricultural Research Initiative (ARI), which provided funding for the study.