A study commissioned by California’s Citrus Research Board has calculated the annual statewide costs for new regulations on growers to be $203 million statewide.
The study, “Impact of Regulations on Production Costs and Competitiveness of the California Citrus Industry,” by Bruce Babcock, a professor in the School of Public Policy at the University of California-Riverside, includes these costs:
- Environmental regulations (not associated with groundwater sustainability) — $17.7 million;
- Labor requirements — $112 million (once all phased in);
- Asian citrus psyllid control measures (if extended to all growing areas) — $65 million;
- Compliance training — $7.5 million
Joel Nelsen, California Citrus Mutual president, said there are two major points in the study: The increases will face California growers, but not those in other citrus states, decreasing the ability of growers to compete, and the second is the overall cost of the new regulations.
“When the cost of citrus at store level gets too expensive, consumers look for lower-priced fruit,” Nelsen said in a news release. “This (University of California-Riverside) report paints a clear path for policy makers if their goal is to drive the citrus industry out of California and onto off-shore production areas.”
New labor costs include a minimum wage rising incrementally to $15 in the next four years, and estimated costs of a state law concerning paid sick leave, overtime and workers comp, according to the release.
The report which says it is “almost inevitable” that the psyllids spread to all citrus regions in California, includes treatment costs for insecticide and putting tarps on loads of fruit going from the groves to packinghouses.
Food Safety Modernization Act costs should be minimal for growers already Global Food Safety Initiative compliant, but effects of the Sustainable Groundwater Management Act is hard to predict, according to Babcock. Each basin’s groundwater sustainability plans must be completed first.
“Without new surface water supplies, it seems inevitable that some farmland that currently relies on groundwater will need to be fallowed to balance withdrawals with recharge rates,” he said in the release.
The Citrus Research Board administers the grower-funded California Citrus Research Program. The full report is online at www.citrusresearch.org.
