FOOD PROCESSORS TAKE AIM AT AB 32 AT FRESNO LEGISLATIVE BRIEFING

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On Tuesday, October 18, the Legislative Rural Caucus held a legislative briefing at the Greater Fresno Area Chamber of Commerce. The informational briefing focused on the impacts of AB 32 Climate Change Regulations on the Ag economy and food processors and jobs in the Valley. Invited to speak were three San Joaquin Valley food processors, Marian Balster, Director of Environmental Management and sustainable development program manager for OLAM Spices and Vegetable Ingredients, Mona Shulman, Vice President and General Council for Pacific Coast Producers, and Ben Curti, a Tulare County dairyman and board member of Land O’ Lakes as well as CA Air Resources Board Member Dorene D’Adamo.

To a person the Valley food processors stated that they will be hurt economically by AB 32, California’s global warming law, which will go into effect Jan. 1. The food processors told the members of the state Legislative Rural Caucus in Fresno that the law is forcing them to spend millions on equipment that will reduce emissions by only a small percentage. These purchases will drive up costs that can't be passed on to consumers because competitors outside of California don't have to make similar purchases. Instead, local processors will likely be forced to cut back production, which will have a devastating trickle-down effect on all of California agriculture.

Only a few members of the Legislative Rural Caucus were in attendance: Assemblymembers Linda Halderman (Fresno) and chair of the Rural Caucus, Shannon Grove (Bakersfield), and David Valadao (Hanford). Lawmakers echoed the producers concerns regarding the Air Resources Board designating food processors as a "medium risk" leakage. CARB’s determination is based partly on the ability to pass on costs, but also on trade pressures, both domestic and international.

Balster and Shulman testified to the need for food processors to be classified as "high risk" for leakage. That position is supported by a letter to Chairwoman Mary Nichols requesting that change. The letter was signed by 16 legislators – Assembly and state Senate members, Republicans and Democrats. Being in the high category instead of medium has added advantages for dealing with AB 32's cap and trade program, which limits the amount of carbon emitted by the state's biggest polluters and creates allowances that can be bought and sold on an open market.

CLFP, during public statement, echoed the food processors positions stating that medium leakage risk subjected food processors to ever increasing costs through each compliance period, virtually eliminating any reasonable expectation of expansion or job creation in the Valley and exposing the industry to foreign competition.

However, while D'Adamo acknowledged that there was likely to be some job loss due to leakage or cut backs in production, she stuck to the general CARB position in stating that a warming climate can hurt farming through drought and by bringing new pests and crop diseases to the state.

As to food processors request for redesignation to high leakage risk that remains an open question according to D’Adamo, but that CARB was studying the request.

Article written by John Larrea, Government Affairs Director

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