California should review regulatory policies that affect the agriculture-port relationship with having a goal of economic resilience.
By Dave Puglia and
Dave Puglia is president and CEO of Western Growers Association, firstname.lastname@example.org.
John McLaurin, Special to CalMatters
John McLaurin is president of Pacific Merchant Shipping Association, email@example.com.
California’s agricultural industry and its port system are inextricably linked, and both are now at risk.
California is the largest agricultural producer and exporter in the nation. California’s farmers exported approximately 26% of their production by volume in 2018, worth about $21 billion. From fresh produce to dairy, wine and much more, people across the globe look for California’s farm goods when they shop.
Because of the close ties between the agricultural industry and the ports, the success or failure of one inevitably impacts the other. In order to compete in overseas markets, California farmers require well-run and cost-effective ports. But, California labor and environmental regulations have created enormous compliance and operational costs.
What California needs during the COVID-19-induced recession, when millions of Californians are out of work, is a holistic approach.
The facts are difficult to ignore. California farmers compete in a global food market, yet layers and layers of state policies have made it hard for them to thrive. In their effort to create the most progressive policies in the world, California regulators have overlooked global economic realities.
The competitive overseas market, which is critical to the success of California farmers, is extremely price sensitive and volatile. Adding costs in the supply chain impacts the competitiveness of countless California farm products; the mystique of the “California Grown” label can’t overcome yawning price differentials for the same food product grown elsewhere.
Farmworkers, truckers, distribution workers, longshoremen and other farm-related companies all suffer when a California farmer loses the ability to sell farm products at a price that continues to make the farming operation viable and profitable.
Considering these dynamics and this critical period of economic uncertainty, protection of the California agriculture-port relationship should be a top priority. Gov. Gavin Newsom should steer his administration in a direction that ensures state regulations are balanced against the economics of international commerce.
Thoughtful port policy that protects California’s agricultural and related industries should not be conflated with a wholesale rollback of regulatory policies. Instead, an administration that champions resilience in water and climate change adaptation, and even in the state’s pandemic recovery efforts, should also pursue a regulatory environment that insists on economic resiliency for businesses and their employees. This approach should promote California’s ports, support the supply chain, and limit regulatory costs on agricultural products and other exports.
California ports play a critical role not just for agricultural exports but imports as well. For example, the Port of Oakland, which is a premier gateway for exports, also supports sectors such as the wine industry with the importation of large amounts of empty wine bottles for use by California’s wine industry. Empty wine bottles are imported, and full bottles are exported.
And a renewed focus on our ports will touch virtually every sector of our state’s economy. The volume of California exports creates a large number of jobs that extend far beyond the state’s agricultural regions. The ports of Los Angeles and Long Beach estimate that 18 to 27 jobs are created for every 1,000 20-foot containers that move through the LA/Long Beach port complex. These jobs are found throughout the supply chain and touch all areas of California.
The COVID-19 pandemic has highlighted the critical importance of California agriculture and ports to many who have historically taken them for granted. These two industries have supplied essential food and served as gateways for the movement of medical supplies and other essential products. Workers in both industries have been determined by the state of California and the federal government to be “essential workers.”
Californians need the Newsom administration to review state regulatory policies with the goal of economic resilience, effectively balancing rules imposed on the private sector with the need for growing our export businesses that support jobs and local communities. Without active engagement, the current imbalance will have a permanent impact on two important California industry sectors and millions whose jobs are linked to them.