Ag Today
Thursday, May 26, 2016
McClatchy News Service
House moves on California water bills, but toward what end?
By Michael Doyle
WASHINGTON – The House of Representatives passed yet another set of controversial California water provisions Wednesday, sending a political signal and, perhaps, putting pressure on the Senate.
Important differences, though, still split the state, and lawmakers have yet to show they can get out of their respective trenches and resolve them. For now, a final deal seems far off.
“We can’t wait any longer,” said Rep. Doug LaMalfa, R-Richvale. “It’s time we end the rhetoric.”
In a tactical maneuver, House Republicans on Wednesday considered California water language on two separate bills. One thrust effectively added a 174-page California water bill to an unrelated energy package.
The California water provisions introduced by Rep. David Valadao, R-Hanford, would repeal an ambitious San Joaquin River restoration program and replace it with something smaller. It directs the sale of the New Melones Dam on the Stanislaus River to local water districts and speeds studies of five potential storage projects. It also mandates pumping water to farms south of the Sacramento-San Joaquin River Delta.
“We’re not trying to steal from other communities,” Valadao said. “I think there’s a lot of room to compromise, and I’d appreciate the opportunity.”
By 241-178, the House approved the broader 1,000-plus-page energy package, which included the California water language along with provisions covering everything from renewable energy to natural gas exports. It now must be reconciled with the Senate’s version, amid continuing concerns from Northern California lawmakers.
“The provisions included in this bill will pit one region of our great state against another instead of providing a balanced long-term solution,” said Rep. Doris Matsui, D-Sacramento.
Advancing on a separate flank, GOP lawmakers Wednesday pushed ahead on a fiscal 2017 energy and water appropriations bill that also includes some of the controversial California water language sought by Central Valley farmers.
The House, in a 169-247 vote, first fended off an effort by Reps. Jerry McNerney, D-Stockton, and John Garamendi, D-Walnut Grove, to strip the California water provisions from the energy and water funding measure.
“We should not be using an appropriations bill to ram through misguided policies that reward a few powerful stakeholders at the expense of others,” McNerney said during House debate.
The White House Office of Management and Budget this week added that it “strongly opposes” ending the San Joaquin River restoration, and it blasted “several highly problematic provisions that undercut the Endangered Species Act.”
House Majority Leader Kevin McCarthy, R-Bakersfield, countered that “we are planning for the future (and) planning for those years that you won’t have the big snowpack.” One California Democrat, Rep. Jim Costa of Fresno, sided with 100 percent of House Republicans in defeating McNerney’s amendment.
The House was expected to approve the overall energy and water measure by Thursday.
The dual moves this week push the California water policies into two separate negotiating arenas, where selected House and Senate members will work out their differences; often behind closed doors. A third possibility is to include the California provisions in a multi-state Western package, where Democratic Sen. Dianne Feinstein hopes to prevail.
“The Senate can no longer ignore it,” McCarthy said during House debate. “They need to come to the table and negotiate with us in conference.”
Each legislative vehicle has different merits, for those hoping to board them.
The energy policy bill would impose permanent changes, while the energy and water appropriations bill would last only through fiscal 2017. Some influential lawmakers might resist packing non-energy measures onto the energy bill. The appropriations bill has its own limits, as well, but it is certain to pass in order to keep the federal government operating.
“Here we are again,” Garamendi said during the House debate.
Michael Doyle: 202-383-0006, @MichaelDoyle10, mdoyle@mcclatchydc.com
Opinion
Fresno Bee
Westlands’ foes distort drainage compromise
By Johnny Amaral
In an election year, despite the usual suspects rallying against anything that would help Valley agriculture, the House of Representatives’ Committee on Natural Resources has taken an important step to advance bipartisan legislation codifying a settlement between the federal government and the Westlands Water District.
The settlement, which was negotiated by the Obama administration, resolves a long-standing dispute arising from the federal government’s failure to provide drainage to lands served by the San Luis Unit of the Central Valley Project and provides a path forward for a meaningful solution to a vexing problem.
A bipartisan group of members of Congress and local elected officials from the affected area support the settlement and the implementing legislation. If passed, the legislation removes the matter from the courts and creates a process for developing productive uses for the damaged lands and managing drainage in the Westlands Water District.
But, true to form, the anti-farming activists and their reliable congressional allies are criticizing the Obama administration for the settlement; ironically, these groups and individuals routinely agree with the administration on many other issues.
Apparently, in their eyes any agreement with Westlands is wrong. Frustrated that the settlement does not eliminate more farming and that their initial misinformation tactics failed, the opponents are focused on mischaracterizing the legislation. This is a desperate act, and their efforts should be rejected by all stakeholders and rejected by Congress.
Political tactics aside, consider the administration’s reasons why the settlement is in the best interest of the country.
First, the settlement relieves the government from an obligation, with a potential taxpayer savings of more than $3.5 billion, and potential liability in ongoing litigation that the government projects could be in excess of $2 billion.
Second, the settlement transfers responsibility for drainage from the federal government to Westlands, which after decades of inaction by the government would finally start the process of resolving the drainage issue.
Finally, the settlement removes uncertainty for the U.S. Bureau of Reclamation and Westlands so both parties can pursue other water policy initiatives that will benefit the state.
The major terms of the settlement have been public for more than two years and have been thoroughly vetted by policy experts, elected officials and interested stakeholders. As is the case with any negotiation, both parties agreed to compromise – the Obama administration, in part, because the settlement relieved taxpayers of significant liability. For Westlands, the settlement closes the book on a long chapter of uncertainty around management of drainage water and drainage-affected lands.
In a political era where compromise is sometimes considered a dirty word, the fact that the administration and Westlands Water District came to a compromise agreement to solve these decades-old issues is one that should be applauded.
Settlements, by nature, require an evaluation of liability and the likelihood of prevailing at trial. Given the contentious debate between Westlands and the federal government over water supply issues, it is fair to say that both parties looked long and hard before reaching this settlement.
Let’s hope that Congress will act swiftly with this legislation. But let’s also hope that a successful settlement and legislative result will provide the encouragement for cooperation on water supply legislation.
When a major part of the country’s food supply is at stake and there are bipartisan solutions available, the country can’t afford to let obstructionists win.
Johnny Amaral is deputy general manager of external affairs for the Westlands Water District.
Santa Maria Sun
Groundwater basin laws raise concerns in Santa Barbara County
By Brenna Swanston
You’ve probably heard: Year five of the drought is upon us, and it’s bringing along a flurry of state-mandated water conservation measures. California Gov. Jerry Brown is signing executive orders, the California Department of Food and Agriculture is pushing for efficient irrigation systems, and the California Water Commission is passing groundwater basin regulations.
But for the water-reliant agriculture industry, stricter water regulations can increase an already heavy burden—and in Santa Barbara County, the Sustainable Groundwater Management Act (SGMA) in particular is raising eyebrows.
The current drought is stressing groundwater resources in California’s agricultural regions more than ever before, according to groundwater hydrology experts. The SGMA seeks to relieve some of that stress by laying out the framework for local regions to best manage their groundwater. On May 18, the Water Commission passed a set of emergency regulations to help regional management teams—called Groundwater Sustainability Agencies (GSAs)—manage their basins in sustainable ways.
According to Department of Water Resources (DWR) Communications Manager Lauren Hersh, the new regulations cover data collection, reporting requirements, descriptions of historical groundwater conditions and current groundwater conditions, and the development of water budgets. They aim to help each basin’s management come up with sustainable practices for their groundwater resource, and ultimately draft a groundwater management plan.
“Basically, there are two key principles from the groundwater legislation,” Hersh said. “First: Groundwater is best managed at the local or regional level, and local agencies should have the tools they need to sustainably manage their resources.”
Second, she said: If the local regions fail to manage their basins according to the SGMA, the state will step in.
If farmers and landowners are involved in the creation of their regional groundwater management plans, the agricultural industry could see some serious benefits in the long run.
Key word: “if.”
Claire Wineman, president of the Santa Barbara County Grower-Shipper Association, said local growers are concerned about the potential underrepresentation of agricultural stakeholders in the decision-making process for groundwater basin management.
These basins make up a crucial component of California agriculture. According to the Santa Barbara County Planning and Development’s Long Range Planning Division, agriculture accounts for more than 95 percent of the water used from the Cuyama Valley basin and approximately 75 percent of the water demand from the Santa Ynez River Valley basin, both of which are subject to the SGMA.
If Santa Barbara County farmers end up underrepresented in the management of those basins, it could have a heavy impact on the county’s agricultural industry.
Hersh said the DWR chose to delegate basin management to local regions rather than create statewide regulations because California’s too large to fall under one broad outline of groundwater sustainability.
“It’s a highly technical and complex task,” Hersh said. “California has such varied geology and hydrology, we believe the regulations are flexible enough so that they can address each particular basin’s specific needs.”
Under the SGMA, the regional groundwater management teams are required to regulate groundwater basins designated by the DWR as medium or high priority. Once the agencies are formed, they’ll come up with individualized plans for the sustainable management of each of their basins.
In Santa Barbara County, the Santa Ynez River Valley, San Antonio Creek Valley, and Cuyama Valley groundwater basins are classified by the DWR as medium priority and are thus subject to the SGMA.
But who will be represented in the agencies for those basins?
Hersh said the interest groups represented in GSAs will vary depending on who’s responsible for and interested in each particular basin. Ideally, everyone with interests in a basin will coordinate to form the GSA that best reflects their community—but this isn’t strictly regulated.
“In some areas, a county may be the sole GSA,” Hersh said. In other areas, where groups with stakes in a basin overlap, an agency may comprise multiple groups.
Wineman said some growers have raised “preliminary concerns” about whether or not the agriculture industry will be taken into account in the formation of local GSAs.
Her concerns are “preliminary” because so far, the DWR has not received any GSA formation notifications for groundwater basins in Santa Barbara County. In fact, areas using SGMA-regulated basins have another year to form their official GSAs—meaning there’s time to ensure the agriculture industry is properly represented.
Wineman’s take, for the time being: “We’re hopeful, but concerned.”
Staff Writer Brenna Swanston can be reached at bswanston@santamariasun.com.
KFSN – TV, Fresno
SOME VALLEY GROWERS ARE GETTING A CHANCE TO MEET WITH TRUMP BEFORE FRIDAY’S RALLY
By Christina Fan
FRESNO, Calif. (KFSN) — Donald Trump’s visit to Fresno has some Valley growers excited. The Trump campaign revealed that the candidate will be holding a private meeting with farmers and their families before the rally on Friday morning.
When Trump flies into Fresno Friday agriculture will top his list of concerns. For his audience too, water is the big worry.
“That’s the misconception, most people think we don’t have water because of a drought,” said William Bourdeau, Harris Farms.
Bourdeau said he’s one of a handful of farmers invited to meet with Trump. They hope to use the opportunity to talk more about food production and the impact of water restrictions on the Valley.
“There is a role for regulation, but it can’t be so burdensome that it’s uncompetitive.”
Trump’s California campaign manager said the candidate has been planning his visit for some time, and will touch on other subjects like the economy and job growth.
“Fresno feeds the world, you’ve got one of the strongest agricultural regions in our nation. And certainly an important part of America’s economy, so it’s natural for him to come,” said Tim Clark, Trump California Campaign Manager.
Currently, one in every four acres in the Westlands Water District is fallow because of a lack of water. Ag leaders are hopeful the candidates will recognize their plight and allow pumps to capture more water.
“What’s going to happen to the delta? What’s going to happen for the ability for water to originate in Northern California to make its way through the Delta to Southern California,” said Ryan Jacobsen, Fresno Farm Bureau.
They also hope forums like this will make agriculture more of a national debate.
“It’s important to all Americans that we have a safe and affordable food supply,” said Bourdeau.
We are told more than 10,000 tickets have already been issued for Friday’s rally.
Palm Springs Desert Sun
Grower fined after pesticides make valley students sick
By Kristen Hwang
Six months after more than two dozen students and staff fell ill at Coachella Valley High School due to herbicides drifting from an agricultural field across the street onto campus, the Riverside County Agricultural Commissioner’s Office has proposed a $5,000 fine for the grower, Amazing Coachella, Inc., which does business as Peter Rabbit Farms.
The notice of proposed action against Amazing Coachella Inc., states that the company created a health hazard by using the herbicide Prefar 4-E “in close proximity to Coachella Valley High School while school was in session and continued the application after the wind changed direction and caused the pesticide to drift off target.” Amazing Coachella also used a wintergreen odor mask to cover the smell of the herbicide.
“The application prevented normal use of the property because students were sent home due to the symptoms they experienced resulting from the pesticide drift,” the notice states. Twenty-eight students and staff complained of dizziness, nausea, headache, irritated throat and burning eyes, the report states. Two people reported vomiting.
Amazing Coachella, Inc. has requested a hearing to present evidence in its case. A hearing date has not been set, Deputy Agricultural Commissioner Robert Mulherin said. If it is determined at the hearing they are not at fault, the proposed penalty can be removed all together or reduced.
President/CEO of Amazing Coachella, Inc. and Peter Rabbit Farms John Powell Jr. did not return multiple calls requesting comment.
At 11:30 a.m. on Oct. 1, 2015, the commissioner’s office received a call from a CVHS parent who had dropped their student off that morning and was concerned about a strong chemical smell coming from a lettuce field south of the school, across the street, according to a report. Investigators arrived 15 minutes later and found Riverside County Fire Department responders and a Hazardous Materials Team at the school.
Paramedics determined that none of the 18 students who showed symptoms needed medical attention.Two staff members sought medical attention on their own. However, those staff members failed to provide medical records to investigators, the report states.
About an hour earlier in the day, a trained pesticide worker for Amazing Coachella, Inc. applied Prefar 4-E to the lettuce field south of the high school along with the odor mask. The wind was blowing east to west and the worker told investigators he did not notice when the wind changed direction.
The active ingredient in Prefar 4-E is Bensulide. The Environmental Protection Agency lists Bensulide as a general use pesticide with relatively low risks. Mild exposure levels are associated with nausea, dizziness, vomiting, stomach cramps and loss of motor control. A sample taken from a palm tree lining the high school’s property tested positive for Bensulide, according to the notice of proposed action.
Community activists are critical of the Agricultural Commissioner’s fine. They said $5,000 is a slap on the wrist for a grower as large as Amazing Coachella, Inc., which has growing areas in the Coachella Valley, Imperial Valley, San Jacinto, Bakersfield and Lancaster and ships across the U.S. and Canada, according to their website.
“Our position is that the fine is significantly lower than what it could have been,” said Blaz Gutierrez directing attorney for the California Rural Legal Assistance Coachella office. “The $5,000 fine is not really a deterrent. I don’t know what the (Department of Pesticide Regulations) and the Ag Commissioner are trying to accomplish.”
Gutierrez said that the $5,000 fine could have been levied on a per person basis, based on how many people experienced symptoms of nausea and dizziness.
Deputy Agricultural Commissioner Mulherin said the Agricultural Commissioner’s office determined that a $5,000 fine was appropriate based on the investigation and the evidence they gathered. “That’s the position we’re going to take during the hearing. It’s up to the county to prove that those points occurred, and the hearing officer will decide,” Mulherin said.
The California Department of Pesticide Regulation is considering rules to limit pesticide applications near schools.
Kristen Hwang is the education reporter for The Desert Sun. Reach her at kristen.hwang@desertsun.com or follow her on Twitter @khwangreports.
Wall Street Journal
Bayer’s Room to Raise Monsanto Bid Looks Limited
By Christopher Alessi and Eyk Henning
FRANKFURT— Bayer AG said it remained committed to its pursuit of Monsanto Co., but the U.S. seed-and-pesticide giant’s rejection of its $62 billion takeover offer may leave little room for maneuver.
As Bayer ponders its next move, investors and analysts are questioning how much the big German drug and chemical maker could afford to raise its all-cash, $122-a-share bid.
Some investors said Wednesday that offer was already a stretch for Bayer, and that the company isn’t in a position to increase it materially because its stock has plummeted more than 12% since news of the takeover effort surfaced about two weeks ago. On Wednesday, the shares closed unchanged at €87.15 ($97.10) in Frankfurt trading.
To clinch a deal creating the world’s largest agrochemicals company, Bayer would have to craft a new bid high enough to satisfy Monsanto but not rich enough to spook its own shareholders, investors and analysts said.
Monsanto, the world’s top seed producer, said Tuesday that Bayer’s current proposal “significantly undervalues” the company and is “financially inadequate.” But Monsanto Chief Executive Hugh Grant said there could be “substantial benefits” to a tie-up with Bayer, and that the U.S. company was open to further talks.
Bayer, a leading producer of crop chemicals, responded by reiterating its bid and expressing confidence it could address Monsanto’s financial and regulatory concerns.
“Bayer remains committed to working together to complete this mutually compelling transaction,” Bayer CEO Werner Baumann said Tuesday night.
Mr. Baumann, a 28-year Bayer veteran who stepped in as CEO just over three weeks ago, has been trying to sell shareholders on the proposed takeover, which some fear would saddle the company with too much debt.
At a lunch meeting with several investors in London on Tuesday, Mr. Baumann characterized the deal as the last crucial step in the global consolidation of the agrochemical industry, which he said could solidify the sector for decades, according to people familiar with the matter.
These people said Mr. Baumann also responded to investors who would have preferred a large pharmaceutical-sector acquisition, saying most available targets wouldn’t help Bayer’s pipeline and cash profile much.
Analysts and investors said Bayer might have to raise its offer to at least $135 a share to interest Monsanto, forcing the German company to enact a much higher capital increase than it initially suggested.
Such a move likely wouldn’t require Bayer to seek shareholder approval for a bid. Bayer’s management board can issue up to 35% of Bayer’s outstanding capital to shareholders for cash without shareholder approval, according to a resolution at its annual meeting last year. The company could also issue convertible bonds.
Bayer said it would finance its current bid, which represents a 37% premium to Monsanto’s closing price on May 9, with a combination of debt and equity, including a share sale valued at around 25% of the total transaction value. That means the company would launch a capital increase of around $15.4 billion. Bayer’s market capitalization is $80 billion.
Bayer needs to persuade shareholders the deal makes sense and comes at the right price to prevent its share price from falling further.
At least initially, investors voiced skepticism not just about the price but also about whether the acquisition would tip the company’s business too far toward crop science, and away from its health-care roots.
“It’s a concern that crop science would become a very large part of the company,” said Markus Manns, a portfolio manager at Union Investment, a Bayer shareholder. Mr. Manns said Bayer’s pharmaceutical and over-the-counter drug businesses were more attractive to investors because the agrochemical division tended to be more volatile.
Investors also expressed doubts about the size of Bayer’s target. “If Bayer were to find a ‘mini-Monsanto,’ it would make more sense,” said Mr. Manns.
“Monsanto is a good company and the deal seems to be a good fit, as both companies have a strong position in different markets and different product ranges that complement one another,” said another Bayer investor. This person added, however, that the current price is “quite high” and “Monsanto is so big that it might be hard to integrate the company.”
With the addition of Monsanto, Bayer’s crop-science business would account for about half of the company’s revenue, analysts say. Last year’s total group sales were €46.3 billion, including €10.37 billion in revenue from its crop-science operation.
Former Bayer CEO Marijn Dekkers, who stepped down at the end of April, built up Bayer’s health-care profile by presiding over the launch of five new blockbuster drugs and the $14.2 billion acquisition of U.S.-based Merck & Co.’s consumer-care business.
At the same time he sought to focus Bayer more squarely on its so-called life-science businesses, including health care and agrochemicals. As part of that effort, Mr. Dekkers late last year spun off part of the group’s specialty-plastics business, now known as Covestro AG.
Bayer’s bid for Monsanto comes after major deals were struck in recent months by rival seed developers Syngenta AG, Dow Chemical Co. and DuPont Co. Analysts have concluded this would be Bayer’s last chance to participate in that deal-making frenzy.
Write to Christopher Alessi at christopher.alessi@wsj.com and Eyk Henning at eyk.henning@wsj.com
