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6 Evolving Beyond Horse and Buggy, Farmers Looked to as Business Mavens 8 Ag Legal Issues in the Time of COVID 28 iTradeNetwork Promises Supply Chain Solutions 30 Western Growers Ag Legal Network 36 WGCIT SPONSOR Pacific Ag Rental Continues to Evolve
WESTERN GROWER & SHIPPER Published Since 1929
Volume XCI Number 5
To enhance the competitiveness and profitability of Western Growers members
Dave Puglia President
Western Growers davep@wga.com
Editor Tim Linden Champ Publishing 925.258.0892 tlinden@wga.com Contributors Cory Lunde 949.885.2264 clunde@wga.com
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Stephanie Metzinger 949.885.2256 smetzinger@wga.com Chardae Heim 949.885.2279 cheim@wga.com Production Diane Mendez 949.885.2372 dmendez@wga.com Circulation Marketing 949.885.2248 marketing@wga.com Advertising Sales Dana Davis Tyger Marketing 302.750.4662 danadavis@epix.net
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President’s Notes
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Federal Government Affairs
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Legislator Profile
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California Government Affairs
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Western Growers Assurance Trust
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Update from the WGCIT
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Western Grower & Shipper ISSN 0043-3799, Copyright © 2020 by the Western Grower & Shipper is published bi-monthly by Western Grower & Shipper Publishing Company, a division of Western Growers Service Corp., 15525 Sand Canyon Avenue, Irvine California 92618. Business and Editorial Offices: 15525 Sand Canyon Avenue, Irvine California 92618. Accounting and Circulation Offices: Western Grower & Shipper, 15525 Sand Canyon Avenue, Irvine California 92618. Call (949) 863-1000 to subscribe. Subscription is $18 per year. Foreign subscription is $36 per year. Single copies of recent issues, $1.50. Single copies of issues more than three months old, $2. Single copies of Yearbook issue $4. Periodicals postage is paid in Irvine, California and at additional mailing offices. POSTMASTER: Send address changes to Western Grower & Shipper , PO Box 2130, Newport Beach, California 92658.
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DAVE PUGLIA | PRESIDENT AND CEO, WESTERN GROWERS PRESIDENT’S NOTES
An Aisle or a Wall? In American politics, the term “aisle” refers to the ideological and partisan differences that separate the two major parties. Interestingly, the term is rooted in the actual physical division of Republicans and Democrats in the U.S. Senate, where the desks are arranged in a semicircle with a wide central aisle. As viewed from the presiding officer’s chair, tradition dictates that Democrats sit to the right and Republicans to the left.
Consider the wisdom of this arrangement. In a heterogeneous society with diverse and competing interests, sound public policy cannot be crafted if the aisle functions as a wall. Indeed, the American republic has been built on bargains, beginning with the many compromises and arrangements that produced our Constitution. Even today, we intuitively understand the need for statesmen and stateswomen willing to muster the courage, and even risk losing the next election, to move toward, and not away from, colleagues of other ideological persuasions. This brief etymology (and history) lesson is worth thinking about today in the context of our shared purpose as agriculture industry advocates who seek good public policy outcomes in an era of sharp and rancorous political and social division. I am asked all the time: “Can anything good get done?” The short answer is yes, but a more complete answer requires qualification that amounts to this: Unless and until it becomes safer to work across the aisle than it is today, the sound and balanced policies we wish to see enacted by legislative bodies and the executive branch will face enormous hurdles. This is not a call to consign our agriculture and economic principles to a distant second place. We should, however, reflect on the observed reality that a policy enacted without some bipartisan engagement and compromise rarely works well over time, assuming such a policy makes it over the finish line at all. To be effective as advocates in the public policy arena, we must be certain what we must win, what we must defeat, and what we can give and take in the middle in service of those larger objectives. This necessarily mandates that our personal ideological preferences take a back seat; the industry’s needs and objectives must guide us. That’s a muscle most of us have to develop; it doesn’t always come naturally. My own career experience leaves little ambiguity about where I sit on the ideological spectrum. Nonetheless, as a professional advocate for our industry, I have repeatedly seen, and been intimately involved with, the development of sound public policy with people across the spectrum. Some of them have been legislators who did not receive support from the Western Growers Political Action Committee (WGPAC) when they first ran, and in some cases our PAC supported their opponents. Yet for reasons that vary, in so many cases these lawmakers sought to build a bridge where none existed and, through reciprocal outreach by us, succeeded.
This is good for the cause we serve: Our industry. Many Western Growers members contribute to our PAC (which is actually four PACs: Federal, California, Arizona and “Issues,” which is used for ballot measure campaigns), but the lion’s share of WGPAC funding comes from the generosity of Western Growers directors. Nearly all WG board members “dig deep,” as the saying goes, every two years to ensure that WGPAC has the resources needed to provide critical support to legislators and candidates for office who have demonstrated an ability or willingness to lean in for our industry. As the highest financial supporters of the PAC, these men and women also direct its activities with the advice of our professional staff. Their task is even more difficult in this environment. We see political and societal division so sharp, angry and uncompromising that there is no one willing to walk into that aisle and reach across. At least that is how it appears if all we know is what we glean from increasingly awful media companies that seek to inflame and frighten rather than inform. The truth is there are good people seeking to work in partnerships across the aisle to achieve public policy that truly protects and advances the needs of agriculture, even in California’s capitol. They are too few, and they are not “with us” on every issue. But they are there and to do more on our issues, they need more like them. That is exactly why we must remain committed to helping elect them. They are the problem solvers, the principled pragmatists, the antidotes to the demagogues. They are the ones who want to effect sound public policy. They are the ones who are willing, on some big issues, to say “no” to influential power brokers in their own party. They are the ones willing to press forward into the aisle. They cannot succeed alone. To all Western Growers members who engage in the political process, in any manner but especially by contributing financially, whether directly to candidates or to WGPAC or any of the other PACs striving to advance our interests, please accept my gratitude. This trying time in our nation’s story has undoubtedly convinced too many good people that it is folly to be engaged in the political process when in fact our industry (and indeed our nation) need them to be more involved than ever. The dust from this election season will clear in the months ahead. As it does, our advocates will be in the capitols and in lawmakers’ districts to help make the aisle that separates partisans a safer space.
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Evolving Beyond Horse and Buggy, Farmers Looked to as Business Mavens
By Stephanie Metzinger F or generations, growers across the United States have masterfully responded to the ebb and flow of massive global transitions to continue to provide food for the world, carry on their farm legacies and contribute to the nation’s economic success. In 2017, the agriculture and food sector contributed $1.053 trillion to the U.S. gross domestic product. If treated as its own country, it would rank as the 16th largest economy in the world, sandwiched between Mexico and Indonesia. Farming contributed $132.8 billion of this sum. Even more astonishing is this was generated by only 3.4 million producers—75 percent of whom have been in business for more than 10 years. The longevity and success of these operations is a testament to the business savvy of farmers. In Western Growers’ membership alone, many farm operators have been in business for 50 or more years. The Elliot family has been farming for over 150 years; the Jack, D’Arrigo, Vessey, Danna, Smith and Couture families for more than 100 years; the Reade, Pappas, Deardorff and Merrill families for 90 years or more, to name a few. “I’ve been active on the ranch since I was a kid and have seen farming practices evolve from literally those horse and buggy days on up to now where we are flying drones,” said Ross Merrill, CEO of Merrill Farms. “I’ve witnessed a lot of changes, but the one thing that stays consistent is the need to adapt business models to keep up with current conditions in the marketplace.” Merrill Farms was originally founded by Ross’ grandfather, Russell Merrill, in 1933 as a grower/packer/shipper, selling its crops under the Merrill labels. Identifying an opportunity to ship product to the East and expand into new markets, Russell
partnered with Ken Nutting, Bruce Church and E.E. Harden to build packing houses and launch an ice company (Growers Ice) next to the railroad tracks. This proactive move not only resulted in the launch of the fresh produce industry in Salinas Valley, but it allowed Russell to expand Merrill Farms to other locations across California. Business was booming and Merrill Farms was officially a year-round shipper. However, in the ‘80s, the company started to see a trend of consolidation on the retail buying side for produce items. It was becoming increasingly difficult to stay competitive so Merrill Farms evaluated its operation and profit margins and decided to rewrite its business model. “We decided to specialize in farming and grow for the larger labels rather than competing with them on a marketing level,” said Merrill. “This model has been successful for the last 25 years. Our core value is focusing on the quality of our cultural practices so our shipper partners are assured that our product is going to arrive on time and that the food safety, worker safety and environmental safety compliance is already taken care of with a degree of excellence. That’s the currency Merrill Farms has today out in the marketplace.” Merrill went on to share how focusing on the growing side has also opened up more marketing windows for the farm and has presented new crop opportunities. Merrill Farms has been able to expand its crop offerings beyond its signature iceberg lettuce, romaine and leaf lettuce programs, to now grow crops such as cauliflower, broccoli, broccolini, and Brussels sprouts. Venturing into new commodities has helped with crop rotation on the ranch and has resulted in increased yield and improved soil health. Similarly, Rancho Filoso, which planted its roots in Ventura County in 1882, first grew lima beans, then walnuts and today citrus and avocados. The ranch is now diversifying and casting a wider net beyond its specialty crop background in search
Merrill Farms Founder T.R. Merrill (middle right) inspects crops in the field.
Lisa Tate Soury recently diversified Rancho Filoso with coffee plants.
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of different revenue streams. In 2016, the 86-acre citrus and avocado ranch substituted 1.5 of its acres with coffee. “We’ve been worried about citrus production in this area, mainly due to Huanglongbing (HLB), so we’ve been trying to find new ways to diversify,” said Lisa Tate Soury, owner/business manager at Rancho Filoso. “One of the ways we are trying is with coffee. Although coffee is typically grown in higher altitudes in the tropics, we wanted to grow it here on the coastal climate to see how it goes.” The plants will not be considered mature until next year, but the coffee beans have already received high cupping scores considering the age of the plant. Once the plants reach full maturity, the ranch will be ready to complete its exciting shift into coffee as it has already accumulated the necessary machinery and knowledge to successfully process the beans once they are picked. “Everything is looking good, but it is still too soon to tell,” said Soury. In the true entrepreneurial spirit, the five generations of farmers who have sat at the helm of Rancho Filoso surveyed the economic landscape during their respective reigns and altered the ranch’s business model accordingly. Taking a risk and diversifying has resulted in a highly successful farm operation that spans 140 years and counting. Though multi-generational farms comprise most of agriculture in the United States, there are still a few who are braving the unknown to launch their own enterprise. Harrison Topp graduated from college during the Great Recession in 2008 and found himself seeking the security that the food and agriculture industry afforded. “I migrated toward agriculture because I wanted something tangible and it felt safer engaging with the food system,” said Topp. In 2012/13, he started cultivating a small orchard in Paonia, Colorado. After a couple of years of working to boost soil and tree health, improve water efficiency, increase harvest yields and diversify production, Topp and his partner, Stacia Cannon, officially caught the farming bug and outlined the steps needed to grow the business. “We started doing the calculations of what we thought we were going to need to be in this long term and provide for the majority of our livelihood,” he said. “I looked across sectors, beyond orchards and horticulture, to develop a model that looked like it spelled long-term success and would
WESTERN GROWERS OFFICERS – 2020
RYAN TALLEY, Chairman ALBERT KECK, Senior Vice Chair STUART WOOLF, Vice Chair CAROL CHANDLER, Treasurer VICTOR SMITH, Executive Secretary DAVE PUGLIA, President DIRECTORS – 2020 GEORGE J. ADAM Innovative Produce, Santa Maria, California ALEXANDRA ALLEN Main Street Produce, Santa Maria, California KEVIN S. ANDREW Vanguard International, Bakersfield, California ROBERT K. BARKLEY Barkley Ag Enterprises LLP, Yuma, Arizona STEPHEN J. BARNARD Mission Produce, Inc., Oxnard, California BARDIN E. BENGARD Bengard Ranch, Salinas, California GEORGE BOSKOVICH III Boskovich Farms, Oxnard, California NEILL CALLIS Turlock Fruit Company, Turlock, California DON CAMERON Terranova Ranch, Helm, California EDWIN A. CAMP D. M. Camp & Sons, Bakersfield, California CAROL CHANDLER Chandler Farms LP, Selma, California LAWRENCE W. COX Coastline Family Farms, Salinas, California STEPHEN F. DANNA Danna Farms, Inc., Yuba City, California JOHN C. D’ARRIGO D’Arrigo Bros. Co. of California, Salinas, California THOMAS DEARDORFF II Deardorff Family Farms, Oxnard, California FRANZ W. DE KLOTZ Richard Bagdasarian Inc., Mecca, California SAMUEL D. DUDA Duda Farm Fresh Foods, Inc., Salinas, California CATHERINE A. FANUCCHI Tri-Fanucchi Farms Inc., Bakersfield, California DAVID L. GILL Rio Farms, King City, California BRANDON A. GRIMM Grimmway Farms, Arvin, California JOHN JACKSON Beachside Produce, LLC, Nipomo, California A. G. KAWAMURA Orange County Produce, LLC, Irvine, California ALBERT KECK Hadley Date Gardens, Thermal, California FRED P. LOBUE, JR. LoBue Bros., Inc., Lindsay, California FRANK MACONACHY Ramsay Highlander, Inc., Gonzales, California JOHN S. MANFRE Frank Capurro and Son, Moss Landing, California STEPHEN MARTORI III Martori Farms, Scottsdale, Arizona HAROLD MCCLARTY HMC Farms, Kingsburg, California TOMMULHOLLAND Mulholland Citrus, Orange Cove, California ALEXANDER T. MULLER Pasquinelli Produce Co., Yuma, Arizona DOMINIC J. MUZZI Muzzi Family Farms, LLC, Moss Landing, California MARK NICKERSON Prime Time International, Coachella, California THOMAS M. NUNES The Nunes Company, Inc., Salinas, California STEPHEN F. PATRICIO Westside Produce, Firebaugh, California RON RATTO Ratto Bros. Inc., Modesto, California CRAIG A. READE Bonipak Produce, Inc., Santa Maria, California ERIC T. REITER Reiter Affiliated Companies, Oxnard, California JOSEPH A. RODRIGUEZ The Growers Company, Inc., Somerton, Arizona WILL ROUSSEAU Rousseau Farming Company, Tolleson, Arizona VICTOR SMITH JV Smith Companies, Yuma, Arizona KELLY STRICKLAND Five Crowns, Inc., Brawley, California RYAN TALLEY Talley Farms, Arroyo Grande, California BRUCE C. TAYLOR Taylor Farms California, Salinas, California STUART WOOLF Woolf Farming & Processing, Fresno, California ROB YRACEBURU Wonderful Orchards, Shafter, California
lead to a lifelong career in this business.” In 2018, Topp Fruits officially expanded to Hotchkiss and now grows everything from peaches and cherries to apples and plums. Topp notes that the investment to expand the operation went hand in hand with the understanding that both he and Stacia would need to maintain off-farm work for a number of years. Topp is currently the membership director for the Rocky Mountain Farmers Union and lauds the company for affording the flexibility needed to serve in his role, while still working on the farm to get his business up and running. Additionally, he credits Farmers Union for providing the opportunity to interact with high-caliber producers who have shared invaluable wisdom on how to effectively and efficiently run an agribusiness. Many of these relationships have played a role in helping this first- generation farmer establish premium markets to move his fruit. “A huge part of our long-term strategy is making sure we aren’t planting trees where we don’t know where the fruit is going,” said Topp. “We are doing a lot of work to establish and maintain those markets ahead of time so that when we are at the stage of where we are producing a lot of fruit in two to three years, we’ll be in a lot better shape.” Launching new enterprises, adapting business models for long-term success, diversifying and innovating are just a handful of the professional skills that farmers have mastered as entrepreneurs. Producers have ingeniously navigated their operations to withstand the turbulence of the unknown and continue to raise the bar for excellence. Needless to say, farmers are the ultimate business mavens. First-generation farmers Harrsion Topp and Stacia Cannon of Topp Fruits in Colorado
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Ag Legal Issues in the Time of Covid
By Tim Linden W hile many of the trends regarding legal issues in the agricultural space do not appear to have changed significantly in the past year, the coronavirus, and the pandemic it has unleashed, is certainly top of mind and has greatly impacted the legal process. Civil cases are not going to trial, lawyers and clients are not meeting in person, depositions are being taken by Zoom and government agencies are not operating in the same manner as they were a year ago. Western Grower & Shipper contacted a handful of attorneys specializing in ag law to get their take on the current situation. Collectively, they see more nuisance lawsuits and demand letters as plaintiff attorneys have reportedly increased their efforts to manipulate class action lawsuits. There are also new legal actions relating to the coronavirus and more expected to be on their way. Below are reports from five attorneys, all of whom are participants in the Western Growers Agricultural Legal Network, which guarantees members a discount for some legal services. Paul Moncrief of Moncrief & Hart For Paul Moncrief, who specializes in contract law in Salinas, CA for Moncrief & Hart, his work-life has not been upended by COVID-19, but the novel coronavirus has kept him busy dealing with many potential legal issues surrounding the pandemic. In a far-reaching interview covering many different contract types dealing with agricultural practices, the veteran ag law attorney
have an interest in solving the issues without litigation and they typically do so. But Moncrief said that from a strictly legal perspective, a buyer purchasing a product who then loses his customer for that product because of a restaurant closure, for example, would have a difficult time winning litigation based on force majeure. “This doesn’t really fit the definition,” he said. “Market risk is not an Act of God.” Moncrief did note that there certainly were instances when force majeure could be applied. For example, a contracted supplier of produce for an event in the future that could not be held because of a government mandate would have a difficult time trying to enforce that contract. When speaking to WG&S in August, he reiterated that the early weeks of the pandemic did result in cancelled orders and other issues but they were typically worked out between the parties, with contracts since then attempting to add the pandemic to the “Act of God” list. Moncrief said some buyers did try to add that wording to contracts already in place but he advised his clients against signing such addendums. He said the coronavirus, and other issues such as food safety concerns, continue to create situations where buyers, especially large buyers, try to shift liability to the shipper or grower. Moncrief said basic contract law calls for each party to pay the damages they cause. He said not only is it bad business to accept liability for damages you don’t cause, but it can also run afoul of your insurance policy. He explained that insurance companies write policies to insure you against your own actions that result in damages to another party. By accepting liability above that, you risk invalidating your policy. At the very least, your insurance company probably will not pay for the damages that you did not cause even if you contractually accept liability. Moncrief also cautioned against signing contracts that on their face are unfair but the buyer demands your concurrence with a “take it or leave it” offer. He said while this might seem like a coerced signing, the courts will not see it that way. “It is still enforceable,” he said. “It’s the market risk you assume.” Although he did say that public policy might offer some relief. For example, California law is specific about the terms that can be enforced with regard to non-compete clauses that employees are often asked to sign. A company in another state would not be able to enforce such a clause against a California employee if it is counter to California law.
revealed that there are more questions than impacts due to the coronavirus. Parties to both sides of many different contracts are exploring the role that COVID-19 might play in potential litigation, but for the most part, he said using the coronavirus to break a contract is not a winning argument. In law, force majeure or an Act of God, is a common legal clause in contracts that frees both parties from
liability or obligation when an extraordinary event happens. Moncrief said that, like with many legal disputes in the produce industry between buyer and seller, most of the contract issues regarding product during the early stages of coronavirus-caused business shutdowns were worked out between the parties amicably. Buyers and sellers have ongoing relationships so they
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added that more government agencies have been involved than what is typically the case. Other legal work that has surfaced specific to the coronavirus includes the Paycheck Protection Program loans that were part of the stimulus package. The loans offered forgiveness if employers followed specific regulations concerning keeping employees on the payroll. In the non-COVID-specific realm of labor law, Schulte said there continues to be litigation trends concerning paying workers for travel time and eliminating the overtime exemption for ag workers. That has largely already occurred in California with labor activist now setting their sights on accomplishing the same worker benefit in Colorado. The Washington D.C.-based SJ-Lake does a lot of advocacy work for its clients and Jacquez said an interesting six months lies ahead as it pertains to both the H-2A program and immigration reform. The Trump Administration is in the midst of issuing new regulations for H-2A, which the agricultural industry believes will be less onerous than the previous rules,
Lynn Jacquez & Chris Schulte, SJ-Lake & Heron The coronavirus has materially impacted the agricultural work of SJ-Lake attorneys Lynn Jacquez and Chris Schulte as they are heavily involved in a wide range of labor law issues and have been inundated with legal questions since the beginning of the pandemic. “It’s been a five-alarm fire ever since,” said Jacquez, noting that both
which were put in place in 2010. However, the new rules have not been announced, hence they will not be in place if a new administration takes the helm in January of 2021. It’s likely that a new round of discussions will begin on H-2A with the previous work basically scrapped. Jacquez is much more confident that immigration reform, at least as it relates to agricultural, will occur in 2021 regardless who wins the presidency. “In fact I will go out on a limb and predict that regardless of the (presidential) administration, the ag work force issue will be addressed in 2021.” She explained that there is bi-partisan support for such an action and the politics would appear to be favorable in either a Democratic administration or a second term Trump Administration. Michael Duvall of Dentons US LLP Michael Duvall is a member of Dentons’ Litigation and Dispute Resolution practice, focusing on class actions, commercial litigation, appeals and administrative enforcement actions. He works from the global law firm’s Los Angeles office where much of the firm’s
regulatory and liability issues are top of mind for agricultural companies across the country. She explained the law firm does a lot of work with employers
trying to secure temporary foreign workers through the Department of Labor’s H-2A guest worker program. The final approval for an application typically requires an in-person meeting at a U.S. facility in the worker’s country of origin. COVID-19 eliminated that possibility, so many work-arounds had to be developed for H-2A workers to be approved. This caused additional shepherding of these applications through the process by the applicants and their attorneys. Visa challenges occurred on a daily basis. She said navigating the H-2A process during these difficult times has become a logistical equation and very case specific. She did express how impressed she has been with how the parties to these contracts have collectively risen to the challenge, sorted through the issues, and made the program work. But there have been a multitude of issues. Schulte said state and local regulations regarding social distancing and mask wearing also impacted the federal program,
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example, providing housing is part of the H-2A requirement and social distancing rules typically meant providing twice as much living space for each worker. He
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West Coast food company work is centered. Like the other attorneys interviewed for this story, Duvall’s work has been impacted by the coronavirus. As a litigator, he would typically spend quite a bit of time in court, but the courts in Los Angeles, and many places across the country, are largely closed. He said
He also noted that the Los Angeles County court system, for example, has invested a great deal of money and time improving its video technology capabilities, ramping up the program over a three-month time period. It’s logical, Duvall said, that they will want to utilize that technology even beyond these challenging times. Erica Rosasco of McKague Rosasco Erica Rosasco is a partner at McKague Rosasco LLP in Roseville, CA, whose practice focuses on agricultural employment law. “It’s been a challenge,” she said, speaking of her legal life during a pandemic. “Normally I travel a lot, seeing clients in person or making court appearances. I have not seen a client since COVID.” She said much of the litigation work has been halted as the various stakeholders are not available. “Litigation came to a stand-still. Much of what I do now is advise and consult,” she said. “We’ve done quite a few webinars on COVID and the workplace rules surrounding it, but those seem to change every day.” She added that mediation by Zoom also appears to be less effective as one side or the other can literally, and dramatically, leave the conference, eschewing a back and forth approach and a resulting compromise agreement. which has made that legal tactic against employers proliferate. She said these PAGA suits often involve technical wage and hour violations and the threat of a class action unless a settlement is paid. She said technical violations on meal breaks, pay day regulations and hourly rates are common. Her advice is that employers need to follow both the spirit and letter of the law but she admits that technical violations are difficult to avoid. She cautioned employers against the “rogue manager” that does not follow company policy and commits labor violations. “You can’t let one employee sink your ship.” While settling is often the most inexpensive route to take in these PAGA cases, Rosasco said they will go to trial on behalf of their clients when necessary to deter what she believes are unwarranted lawsuits. She said some of these plaintiff ’s lawyers take a shotgun approach to their lawsuit filings casting a big net in the hopes of finding one big fish every once in a while. She noted that one recent case involved a payment of $2000 to the plaintiff, which included legal fees. “That was a loser. His fees had to be much greater than that,” she said. As a practical matter, Rosasco said the coronavirus has reduced the workload in some areas such as workplace violations. She said OSHA (Occupational Safety and Health Administration) does not have enough people to do inspections so there have been fewer violation citations. She worries about lawsuits filed against employers because of employees getting coronavirus, but that has not happened yet. Rosasco said much of her work involves representing farm labor contractors as they appear to be the target of much litigation including class action suits or the easier-to-file Private Attorney General Act (PAGA) suits. She explained that with a class action suit a lot of pre-work has to be done by the plaintiff ’s lawyer to find and qualify a named class action plaintiff. That is much less important in a PAGA case,
that while in-person trials and court appearances are continuing to occur for some criminal cases and in emergency situations, civil jury trials have been halted since March. But that doesn’t mean the work has stopped. “We are not going to court, but cases are still matriculating as they normally would in their early stages,” he said, noting that there are pre-trial hearings being held over the phone and via video.
There are also Zoom depositions taking place and the normal correspondence between attorneys after a lawsuit has been filed or a demand letter sent. Duvall said the demand letter is an ever-increasing tactic in the agricultural sector. It typically threatens class action status for some alleged unlawful trade practice such as inaccurate labeling of product. He said a settlement often is the result, with a payoff to the would-be plaintiff to prevent the class action from moving forward. With regard to unlawful trade practices, Duvall said increasingly the firm is seeing challenges to food label statements such as “pure, natural or healthy.” While the use of the word “organic” is regulated by the USDA’s National Organics Program, many of these other words do not have specific legal definitions, and may allow for jury interpretation, hence the potential lawsuits. He added that litigation has moved into additional areas, for example, a class action is likely to question statements about the food’s source (including where it is grown or whether it is “natural”). The plaintiff claims that your label is false, misleading or deceptive. But Duvall does not recommend that food companies avoid such phrases. They are often used because they resonate with consumers and are responsive to their demands. He advises clients to invest the time and money up front to substantiate the claim they are going to make and accept potential litigation as the cost of doing business. “When you are in the food business, you are a litigation target,” he said. “When you are threatened with a lawsuit it means you have arrived. You are big enough to be a target.” But he reiterated that it is much less expensive to conduct the research for the basis of your claim—and have a lawyer review the documentation and the label—than to hire a lawyer after the fact to mount a defense. He said a company should have test results, certifications, and other documents to substantiate their labeling statements. Considering legal life after the coronavirus, Duvall believes there will be some changes, but he relishes going back to the old ways of doing things in the litigation world. For example, he said many attorneys want to go back to in-person depositions, noting that it can be difficult to read a witness by Zoom. “There is no substitute for being face to face,” he said. He suspects trials will continue to be held in person, but if this pandemic stretches well into 2021 and continuing to delay a trial no longer makes sense, zoom trials may become more prevalent as well.
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DENNIS NUXOLL | VICE PRESIDENT, FEDERAL GOVERNMENT AFFAIRS GOVERNMENT AFFAIRS
COVID Chaos What an upside-down time we are living in with the pandemic overturning all of our normal lives. Our industry has been battered with this virus but we continue to grow food for our nation—all thanks to your hard work. In Washington, Western Growers has been trying to do everything we can to support you. We have been working to make sure you can access guest workers if you need them. We have been trying to make changes to the Payroll Protection Program to make it work better for you. And we have been trying to secure more federal resources for you. It’s this last piece that is very important and deserves the spotlight. Currently, there are resources available to the ag community, and we are trying to make additional resources available as the ongoing crisis continues. USDA Programs
and recently worked with academics to provide a webinar series on what that information means on a practical level with real-world, on-farm explanations of Centers for Disease Control guidelines. We know, however, that farmers need access to additional testing for their farmworkers, as well as funding to quarantine those who test positive for COVID-19 and to isolate individuals who have been exposed to others who tested positive for COVID-19. Some farms have been fortunate to find available tests and are paying for their workers to be tested, but in rural parts of the country finding tests for potentially hundreds of workers can be very difficult with testing results being long delayed. Furthermore, the expense of widespread and frequent re-testing is beyond the financial reach of many farms, most of which are family-owned and operated. Other farming operations have taken the next step and are renting hotel rooms to isolate or quarantine positive and exposed employees, if such accommodations are available. However, it is cost-prohibitive for most farms to provide 14 days of isolation/quarantine lodging. Compounding the costs of testing and housing are additional COVID- 19 expenses, including masks and gloves, disinfectants and sanitizers, touchless thermometers, and other administrative and engineering controls. Most farmers have some of these supplies on hand and are providing them to their employees but not all stock up and the list of supplies and other engineering changes grows as we learn more about the novel coronavirus. Our work in Washington D.C. has been focused this summer on securing additional resources for you to offset the increased costs associated with all these expenses. In that regard, we have pushed for federal dollars to be available to reimburse producers who have spent money already on these costs. We are supporting efforts to create tax credits for these costs. We are also supporting efforts to create direct financial aid to pay for costs going forward. In essence, we are taking all of the above approaches to make sure that you have the resources you need to ensure worker safety from the coronavirus.
In May, the U.S. Department of Agriculture announced that it was implementing two new programs to provide producers money to offset losses incurred due to the pandemic. Under the first program, USDA is purchasing excess produce and distributing that product to those in need through the Farmers to Families Box Program. This program directly helps Americans who are hungry while also shoring up markets in the specialty crops industry and providing income to producers. So far, several billion dollars have been spent. Western Growers has been concerned and is pleased that USDA is ensuring that produce contractors in this program are now all PACA licensed. In May, USDA also announced that it would be providing growers with direct financial payments to help offset losses related to COVID. As designed, growers can submit applications for federal dollars up to $750,000 to offset losses incurred. Over the course of the last few months, we have worked on your behalf to improve the program. First, we have been pushing to expand the list of fruits, vegetables and tree nuts that are eligible for payments. USDA, in response, has added roughly 90 new crops to the list of eligible produce crops. We have tried to eliminate USDA rules that impede producers getting funds; in response, USDA has recently changed a regulation that prevented certain S-Corps from getting money. As currently constructed, the program applies to losses incurred before April 15; we are working with the U.S. Congress and the Trump Administration to expand eligibility beyond that date and for the rest of the year. We are also working with USDA to better advertise the program and ensure that every fruit, vegetable and tree nut grower in America is aware that the program exists. New Resources for Worker Safety We know that the health and safety of your workers is absolutely critical to each of you; without your workers you can’t bring food to America’s table. Creating a safe workplace has been challenging during COVID especially as guidance evolves. In that regard, Western Growers has been reviewing guidance from federal and state officials
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LEGISLATOR PROFILE Serving the People is the Best Job Senator Gowan Has Ever Had
By Chardae Heim (Editor’s Note: Senator David Gowan spent the first eight years of his political career in the Arizona House of Representatives fighting for the families and businesses of Southern Arizona. He now serves as Arizona’s 14th Senate District Senator.) David Gowan, a conservative Republican, was first elected to the Arizona House of Representatives in 2008. He resides in Sierra Vista, a city located in the 14 th senate district of Arizona, which also includes Cochise County, Greenlee County, most of Graham County and a portion of Pima County—a district comparable in size to the state of Massachusetts with an 83.5 mile stretch on the Mexican border. Following Gowan’s graduation from the University of Arizona, former state Rep. Randy Graf had announced his resignation from the State House to run in the Republican primary for Congress. Gowan saw this as the perfect opportunity to pursue his interests in politics. While Graf ’s announcement came at what seemed like the perfect time, Gowan’s desire to make a change based on his
viewpoints motivated his run for office. In 2004, Gowan kicked off his first campaign for the Arizona House of Representatives. He lost both the 2004 and the 2006 elections. Instead of allowing these back-to-back defeats to discourage him, he used them as fuel to run for a third time. He won a runaway victory in 2008 and was sworn into office in January of 2009. He served a total of four terms before being termed out. During his tenure in the State House, Gowan served as both the Majority Leader and the Speaker of the House. After his four terms, he initially sought election to the U.S. House as Arizona’s 1 st Congressional District representative, but he withdrew before the end of the race, choosing to return to the private sector. After leaving the race, Gowan spent the following two years as a Realtor, but this wouldn’t be the last time he would be seen in the Arizona Legislature. During those two years, Gowan prepared for his State Senate election campaign. Politics was his passion and although seeking change motivated his decision to run, serving the people has been his motivation to stay in office. “The best job I’ve ever had is serving the people and taking care of my constituency,” Gowan said. “I enjoy it and I’m blessed to have it.” After winning the senate seat, Gowan hit the ground running with an appointment to serve as Appropriations Committee Chairman and member of the Water and Agriculture Committee, as well as the Natural Resources and Energy Committee. Representing a predominantly rural district, Senator Gowan has been an unyielding advocate for the agriculture industry. “Ask anybody, ag is the backbone of this state, [ag] created this state,” he exclaimed. One of Gowan’s most
significant achievements as a legislator has been helping the state fairs, which he believes is one of the last educational opportunities for the community members to familiarize themselves with the industry. “I want to make sure people stay educated
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Western Grower & Shipper | www.wga.com
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properly so they know the source of their food,” he said. “Did you know that some people think their food originates in grocery stores? That’s why fairs, and all forms of agricultural education are so important for our farming and ranching communities.” Gowan was recently named Legislator of the Year by the Arizona County Fairs Association for his work. In addition to being a champion for the fair industry, Gowan has been a huge proponent for water projects. “As Appropriations Chairman, I have fought for $20 million in funding for water infrastructure,” Gowan said. “As Chairman, I have the ability to start conversations that everyone doesn’t get to [start].” The funding he is referencing is a part of the Drought Contingency Plan, arguably the biggest water policy change in Arizona in the last 40 years. “Pinal County farmers shouldn’t have to fight for water from other areas, and neither should Yuma, or any other ag region in our state!” Gowan stated. He is determined to continue his fight for those that need water, especially those in the agriculture industry. In the Arizona State Legislature, Senator Gowan has a reputation for being quick-witted and pragmatic with “principles he doesn’t cross.” He is passionate about the issues that affect his constituency. During his first term, Gowan was initially under the impression that everyone who gets elected immediately tackles issues that were also important to him, considering they were all Arizona representatives. “I later found out, that’s not true,” he said laughingly. “Everything is about balance.” Gowan referred to his time spent in the Arizona Legislature as a learning experience. “I have learned the ins-and-outs of government processes, which is necessary to be a strong representative for your constituency,” he exclaimed. He came into office in 2009, during the Great Recession. At the time, the primary focus was the state budget, because Arizona faced a massive economic downturn and a multi-billion-dollar budget deficit. Over the eight years that he served as a state representative, he and his colleagues were able to get the budget deficit structurally balanced and turned into a surplus. Little did the senator know, the takeaways from the Great Recession would be useful and applicable over a decade later. Similar to the recession, COVID-19 has caused economic concerns. Due to Gowan’s past experiences and informed
the necessary precautions to ensure their safety, health and cleanliness. This includes constant wipe downs of the rails and floors and having easily accessible hand sanitizers throughout the building. Although they are diligent in their efforts, Gowan says he is hopeful that we see an end to this. While the pandemic has thrown a wrench in the works, Gowan remains in awe of this nation’s tenacity. “The professionalism is boundless,” he says. “Being able to work for yourself and create jobs is the beauty of this great country. That is what being a professional means.” According to Gowan, being a professional includes creating wealth and making a good life for the family. As a legislator working incessantly to bolster his constituency, he has found it difficult to detach from work. “When I’m not introducing new legislation, I am most likely killing off bad bills,” he stated. “Defending the industry is a large portion of the job and I don’t go to the Capitol to lose; I go to win for my constituents.” When he does find downtime, he chooses to spend it with family. Senator Gowan can be found at his family’s apple tree orchard, at a county fair or leisure traveling. Above all else, as a man of great faith, he never misses a Sunday at Mountain Vista Baptist Church. “I love my district, it’s a great district,” he declared. “It’s like me, pro-family and pro-faith.”
decision-making skills, he has participated in a better recovery at a faster rate. He admits working under COVID-19 restriction has called for adjustments. “For starters, there have been plenty of Zoom calls,” Gowan said jokingly. The pandemic has caused his appreciation for face to face interaction to grow. “It is easier to speak to someone face to face,” he said. “We can look at each other’s body language and faces.” Aside from the Zoom calls, the Arizona Legislature is taking
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MATTHEW ALLEN | VICE PRESIDENT, STATE GOVERNMENT AFFAIRS GOVERNMENT AFFAIRS
The Importance of a Risk Management Approach to Pesticide Regulation
Our daily life routines consist of many activities including work, school, recreation, and travel. Hopefully, we go about engaging in these activities with a focus on the opportunities and benefits that they will bring to our lives and livelihood. Engaging in life’s opportunities brings both rewards and risks. As a society, we have studied many of those risks and have developed tried and true mitigations to minimize them to a realistic and practical level. Realistic and practical are key components to developing a successful risk management strategy that identifies a risk, mitigates that risk to a practical level, and does so in a way that allows productivity to continue.
People identify and make risk management decisions every day. We wear a seatbelt and follow driving regulations to best safeguard ourselves, our passengers, and other drivers on the roadway. This is done to reduce the opportunities for an accident to occur and if one does, that the results of that accident will not be as severe. Furthermore, these risk management strategies were developed based upon science and physics. What if we were to decide that we cannot have any risk with driving? The impracticality of that decision would lead to enormous social and economic consequences. Weighing risks and mitigating them is something that we do almost subconsciously whether it involves making diet choices or taking medications. The list goes on. The discussion above is meant to provide some real-world examples of how important risk management decisions are and how we take them for granted. However, there is a strong and vocal anti-pesticide lobby that believes that risk management is not appropriate since it doesn’t eliminate the potential risk to zero. Talk about an impossible standard to meet. That is precisely their strategy. Since risk can never be zero; then a crop protection chemistry must be banned from use. This concept of ignoring the importance of risk management completely discounts the millions of dollars of scientific research and countless studies that are conducted to bring a new crop protection chemistry to market. These active ingredients face such scrutiny at both the federal Environmental Protection Agency and at the California Department of Pesticide Regulation that it often takes a decade or more to get them registered for sale and use in California. These studies
specifically look at human health and the environment, as well as how effective the product is in controlling the intended pest or disease. By and large, these chemistries have been very beneficial in helping to limit pests and disease while increasing crop yields. Indeed, crop yields are a critical consideration for growers as they determine the economic viability of planting and harvesting a crop. And good crop yields are equally important to consumers since that plays a critical role in keeping food costs reasonable. This article is not about conventional agriculture or organic agriculture. It is about the unfortunate success that the anti- pesticide lobby has had on building the public’s fear around pesticides and then using that messaging to call into question pesticide risk management decisions that have been based on science and real-world, per the label, use of a compound. As one of many advocates who operate within this space, it is truly frustrating and appalling to witness the attempt to dismantle the risk management model. WG continues to highlight the necessity of risk management at the California Department of Pesticide Regulation and the negative consequences that a strict adherence to a zero risk policy as advocated by anti-pesticide groups would have on the entire agricultural output from farm to store. Our food supply is the safest on the planet because of risk management and the fact that growers follow precise guidance and regulations on integrated pest management and label requirements. WG will continue to advocate for both conventional and organic crop protection tools for growers to have in their toolbox.
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